Wastewater Revenue Bonds, 2026 — CleanPowerSF Sfpuc Commission, July 28, 2026 (part 1 of 3)

Nikolai J. Sklaroff
Capital Finance Director
July 28, 2026
2026 Wastewater Bonds
Authorization
Agenda
• FY2026-27 Capital Financing Plan
• Wastewater Capital Financing Strategy
• Series 2026 AB Wastewater Revenue Bonds
• Commission Authorization
• Authorize the issuance of up to:
• $506 million of Series A (SSIP) (Taxable)
• $556 million of Series B (Tax-Exempt) (Refunding)
2 Capital Financing Plan Tasks
(FY 26-27 Tasks Pending)
3Note: Dates and amounts are approximate and subject to change; presented to the Commission in August 2026.

Activity Enterprise
Size
($ Million)
Expected Actions
Commission Closing
Wastewater and Water
Credit Facilities
Approve
renewal/replacement of
expiring bank facilities and
expand Wastewater interim
program
Wastewater
Power
Wastewater
$150
$250
$500
Q2 FY25-26
Q2 FY25-26
Q2 FY25-26
Q3 FY26
Q3 FY26
Q3 FY26
Wastewater Revenue
Bonds–Authorize Revenue
Bonds to refinance CP,
deposit to project accounts,
and allow new
encumbrances
Wastewater Up to
$931 Q1 FY26 Q3 FY26
Outstanding and Planned Debt
(Wastewater Enterprise)
4 Debt Type Outstanding
($billion)
Revenue Bonds and Notes $3.357
WIFIA Loan Draws $1.371
SRF Loan Draws $0.391
Subordinate Obligations/COPs $0.023
Total $5.141
Debt Type 10 Year Plan
($billion)
Revenue Bonds - FY26 $1.250
Revenue Bonds – FY27-35 $4.804
Total $6.154
Of which:
• WIFIA Loan Draws $0.212
• SRF Loan Draws $ 0.170
Bond Market Conditions
5Source: Montague DeRose and Associates, Municipal Advisor, as of July 17, 2026 Historical AAA MMD Context (past 30 years)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1-year Range Current 10-year Average Historic Lows Historic Highs State of California GO Yield Curves

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 Year Ago 30 Days Ago Current
Federal Reserve Rate Actions
6Source: Wells Fargo U.S. Economic Forecast, July 10, 2026

History of Interest Rates
(Taxable and Tax-Exempt Indices)
7Source: LSEG Municipal Market Monitor, J.P. Morgan as of 7/16/2026

2026 Wastewater Revenue Bonds
(Structure Overview)
• Series 2026AB Wastewater Revenue Bonds
• Series A (Federally Taxable) project funding
Biosolids Digester Facilities Project (BDFP),retiring
outstanding commercial paper and funding capitalized
interest to mitigate short-term budget impacts.

Interim financing until project is put into service and final tax allocation can be made
• Series B (Tax-Exempt) refunding a portion of certain
of the SFPUC's outstanding bonds (including 2010B
Build America Bonds (BABs), 2013B, 2016A, and
2016B), as appropriate based on prevailing market
conditions in August.
8 9
Why Taxable Bonds for 2026A
(BDFP)
Series A (Federally Taxable) project funding Biosolids
Digester Facilities Project (BDFP)
• Provides time for project team to finalize Biogas Utilization Project (BUP) plans and financing team to review and recommend re- financing options (such as tax-exempt or taxable debt) or funding remaining BDFP costs on a taxable basis to maximize potential Investment Tax Credits or commercial off take opportunities • Series 2026 A Bonds to be sold as short term taxable bonds • Simultaneous closings with the tax-exempt Series 2026 B Bonds • 2026 A Bonds will fund costs for BDFP
• Structured with short maturities (maturing within the next five years) • Maturities under 60 months allowed to be considered “Balloon indebtedness” per the Debt Management Policy and Indenture • Repayment of principal will come from moneys other than Net Revenues, such as refinancing the maturing debt by issuing new bonds
• Amounts are already built into financing plan as long-term debt service 10 Rationale for 2026B Refunding
Series B (Tax-Exempt) refunding outstanding 2010B,
2013B, 2016A and 2016B Bonds
• 2010B BABs were issued with a promised 35% federal interest subsidy
• Paying off the BABs mitigates risks associated with potential reductions or elimination of federal BABs subsidies
• Federal "sequestration" reduces the subsidy by 5.7% through September 30, 2031; has cost the SFPUC millions in lost subsidies • Risk of failure of Congress to act to avoid 100% sequestration (eliminating the subsidy)
• Commission Resolution approves the refunding without satisfying the 3% Net Present Value (NPV) debt service savings test, pursuant to Ordinance No. 181-23
• Significant non-economic factors warrant waiver (i) eliminating the subsidy risks and (ii) providing greater future refunding flexibility • The 2013B, 2016A and 2016B refundings would proceed only if they produce attractive NPV and cash flow savings.
11 Sources and Uses of Funds*
($ millions)
Sources Series 2026
A (Taxable)
Series 2026 B
(Tax-Exempt)
Total
Par Amount $404.8 $406.8 $811.6
Premium - 55.6 55.6
Total $404.8 $478.3 $883.2
Uses Series 2026
A (Taxable)
Series 2026 B
(Tax-Exempt)
Total
Commercial Paper Takeout $186.0 - $186.0
Project Fund 187.0 - 187.0
Escrow Deposit - 476.8 476.8
Capitalized interest 30.5 - 30.5
Issuance Costs/UW Fees 1.3 1.5 2.8
Total $404.8 $478.3 $883.1
*Preliminary and subject to change. As of May 29, 2026. Assumes existing market conditions and bond ratings, pending review. 12 Not To Exceed Amounts
(Series 2026 Wastewater Bonds)
Purpose Green
Bonds
Tax Status Not to Exceed
for Resolution
Series A Biosolids Digester Facilities
Project (BDFP) &
Commercial Paper
No Taxable $506 million
Series B Refunding 2010B BABs,
2013B, 2016A, and 2016B
No Tax-
Exempt
$556 million
TOTAL $1.062 Billion
13 WWE Net Debt Service Projections
Source: Montague DeRose and Associates
14 Anticipated Bond Sales
• Bonds are expected to be priced in August 2026
• Separate Pricings for Taxable and Tax-Exempt
Bonds during the same week.

Series A (August 3 - 4)
Senior Manager (Books) Morgan Stanley
Co-Sr Manager RBC Capital Markets, LLC
Co-Managers Cabrera Capital Markets LLC, Wells
Fargo Corporate and Investment
Banking
Series B (August 5 - 6)
Senior Manager (Books) JPMorgan Securities LLC
Co-Sr Manager Ramirez & Co., Inc.

Co-Managers TD Financial Product LLC, Raymond
James & Associates, Inc.
15 • SB 450 (enacted in October 2017) requires local agencies to disclose estimates of certain debt financing-related information at time of authorization
• Information obtained from municipal advisor included in Commission Staff report:

Good Faith Estimates
(SB 450 Requirement)
2026 Series A
Wastewater Revenue
Bonds (Federally
Taxable)
2026 Series B
Wastewater
Revenue Bonds
(Tax-Exempt)
True Interest Cost 4.9000% 3.3625%
Finance Charge $1,299,006 $1,493,603
Amount of Proceeds Received by the
Public Body for Sale of the Bonds
net of reserves or capitalized interest
(CAPI) deposits and the finance
charge of the bonds
$373,001,012 $474,867,888
Total Payment Amount (i.e., Total Net
Debt Service net of CAPI)
$992,634,995 $613,687,050
*Preliminary and subject to change based on market conditions at the time the bonds are sold. Current estimates based on rates as of 06/25/2026
16 • Preliminary Official Statement (POS)
Disclosure describing bond terms and condition of the
Wastewater Enterprise
• Continuing Disclosure Certificate (Appendix in POS)
Outlines annual disclosure reporting requirements while the bonds are outstanding.
• Form of 19th and 20th Supplemental Indentures
Agreement between SFPUC and bondholders
• Bond Purchase Contracts
Outlines terms of bond sale for negotiated sale
Series A (Taxable) Bond Purchase Contract – Morgan Stanley Series B (Tax-Exempt) Bond Purchase Contract – JPMorgan Securities LLC
• Escrow Agreements
Establishes the agreement with the escrow agent to hold securities to legally defease the refunded 2010B Build America Bonds, 2013B, 2016A, and 2016B.

Form of Transaction Documents
Recommended Commission Action
• Authorize bond issuance of up to:
• $506,000,000 million of Series A (Federally Taxable)
• $556,000,000 million of Series B (Tax-Exempt)
• Approve form of related bond documents
• Authorize General Manager to sell Bonds in one or
more series on a negotiated basis
17 18
Questions

AGENDA ITEM
Public Utilities Commission
City and County of San Francisco

DEPARTMENT

Financial Services

AGENDA NO.

8 MEETING DATE July 28, 2026

Calendar: Regular Calendar
Project Manager: Nikolai J. Sklaroff

Authorize the issuance of (1) up to $506,000,000 of Wastewater Revenue Bonds, 2026 Series A and (2) up to $ 556,000,000 of Wastewater Revenue Bonds, 2026 Series B

Summary of Proposed
Commission Action:

Authorize the issuance of (1) up to $506,000,000 of
Wastewater Revenue Bonds, 2026 Series A (Federally
Taxable) (2026 Series A Bonds) to fund certain costs related to the Biosolids Digester Facilities Project, retire commercial paper notes, and fund capitalized interest to mitigate short - term budget impacts ; and (2) up to $556,000,000 of
Wastewater Revenue Bonds, 2026 Series B (2026 Series B
Bonds) to ref und a portion of certain outstanding bonds ; authorize the General Manager to execute documents
necessary or appropriate to sell the 2026 Wastewater Bonds in one or more series of bonds on a negotiated basis, as the General Manager determines is in the best financial interest of the San Francisco Public Utilities Commission; and
authorize the General Manager to appoint underwriters and enter into one or more bond purchase contracts with
underwriters selected from the City’s pool of pre- qualified underwriters subject
to a competitive procurement process
and in accordance with the City’s policies and procedures, subject to the limits on underwriters’ compensation set forth in the resolution.

Background: The 20 26 Wastewater Bonds will be issued pursuant to Proposition E, approved by San Francisco voters on
November 5, 2002, codified as San Francisco Charter as Section 8B.124, and by various ordinances and resolutions approved by the Board and the San Francisco Public Utilities Commission (SFPUC). Proceeds of the 20 26 Wastewater
Bonds will be used to finance costs of Wastewater Enterprise capital projects as follows: the Series A Bonds will finance costs related to the Biosolids Digester Facilities Project, on a federally taxable basis and fund capitalized interest ; the Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 2 ends

Series B Bonds will refund a portion of certain of the Wastewater Enterprise's outstanding Bonds. The 20 26
Wastewater Bonds transaction was included as part of the FY 20 26-27 Capital Financing Plan presented to the
Commission on June 9, 2026 by Resolution No. 26- 0091.

The issuance of the 2026 Wastewater Bonds is being done in compliance with the “Debt Management Policies &
Procedures,” most recently updated and approved by the
Commission on November 26, 201 9 by Resolution No. 19-
0224.

Plan of Finance: SFPUC staff is recommending the
Wastewater Enterprise issue a combination of taxable and tax-exempt bonds, with different underwriting syndicates leading the taxable and tax-exempt series.

• Taxable Series of Bonds. The taxable 2026 Series
A Bonds will be issued to mature within the next five
years. Under the Indenture and the Debt
Management Policy, if 25% or more of the principal of
a series of bonds matures on a single date it is
allowed to be considered “ Balloon indebtedness” for
purposes of calculating annual debt service and debt
service coverage. Because repayment of principal will
come from moneys other than Net Revenues such as
re-financing the maturing debt by issuing new bonds.

These bonds will be issued initially on a taxable basis with the expectation that all or a portion of the bonds will be refinanced later on either a lower cost long -
term tax-exempt basis or on a taxable basis . This
interim step is being taken in light of the procurement and acquisition of biogas processing equipment for
the Biosolids Digester Facilities Project and how the
biogas that is generated from this project may be
utilized. Given components of this project are
currently evolving, the 2026 Series A Bonds are being
issued on a taxable basis to provide flexibility to, and not limit, the project planners since tax-exempt bonds
are subject to private use restrictions while taxable
bonds are not. The SFPUC may refinance this series
into long-term tax-exempt bonds should the SFPUC
proceed with a plan for biogas utilization that permits the use of tax-exempt bond proceeds. Otherwise, the
SFPUC plans to refinance this series with taxable
bonds or other sources, as described below. The
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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SFPUC is also assessing how to best leverage tax
credits that could be generated by this project. It is the SFPUC’s intention not to do anything with the
Biosolids Digester Facilities Project including the use of the biogas that would result in a change in use and
tax treatment of the existing financing.

• Tax Exempt Series of Bonds. In addition to the
2026 Series A Bonds for new money, staff also
recommends the Commission approve the issuance
of the 2026 Series B Bonds to refund the Wastewater
Enterprise's Bonds. The 2026 Series B Bonds may
refund or partially refund certain outstanding
wastewater bonds (including 2013 Series B, 2016
Series A and 2016 Series B bonds) to achieve debt
service savings. In addition, a portion of the Series B Bonds will be used to refund the
outstanding 2010
Series B Build America Bonds (BABs). This BAB s
refunding, if executed, would mitigate risks
associated with further reductions , or the elimination of, federal subsidies currently paid on such bonds.

While refunding bonds would normally be issued
pursuant to San Francisco City Charter Section 9.109
and Board of Supervisors Ordinance 181 -23 (which
collectively authorizes the issuance of refunding
bonds that are expected to result in debt service
savings of at least 3% calculated on a present value
basis), the BABS portion of
this refunding is not
primarily being proposed to produce interest rate
savings under current conditions, but instead is
proposed to mitigate the risk of the federal
government reducing or eliminating the subsidy
payment, which it has done in the past. If at the time of sale, the refunding produces such expected
savings, the bonds would be issued pursuant to such
authority; currently the bonds may not provide savings
if the subsidies continue, but would provide
substantial savings if the subsidies are terminated. As such, the 2026 Series B refunding bonds may be
issued pursuant to the authority of Ordinance 181-23
whereby this Commission may approve this
transaction without satisfying the 3% net present
value debt service savings test typically required for
refunding bonds due to the significant non- economic
factors discussed below.

Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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In 2010, the SFPUC took advantage of a federal program
authorized as part of the American Recovery and
Reinvestment Act in the wake of the financial crisis to issue taxable bonds called “Build America Bonds” (“BABs”) instead of tax -exempt bonds. The idea w
as that with the loss of
liquidity in the municipal bond market, local governments would benefit from selling bonds into the broader, more liquid taxable bond market. As a result, these bonds were issued at higher taxable rates but came with the promise th
at the
Federal Government would be obligated to pay the issuer (in this case the SFPUC) directly a subsidy equal to 35% of the interest paid on the BABs in lieu of granting investors tax exemption on bond interest. In 2010, the Wastewater
Enterprise issued $192,515,000 of BABs, of which
$161,985,000 remains outstanding as of July 1, 2026.

The 35% BABs subsidy that was to be provided by the
federal government has been reduced below this obligated level every year since March 2013 as a result of
“sequestration” - mandatory spending cuts required by
federal legislation designed to enforce budget neutrality. To date, sequestration has been due to the Budget Control Act of 2011, which currently requires a 5.7% sequestration of BAB subsidy payments through September 30 , 2031. This
reduction means that the promised subsidy is falling short, costing the SFPUC millions in lost subsidies.

Congress can terminate, extend, or otherwise modify
reductions in BABs subsidy payments due to sequestration at any time, and the sequestration reduction rate could be increased to as much as 100% in future years depending on the impact of other legislatio
n or reconciliation processes
enacted by Congress. For each of the foregoing reasons, SFPUC staff recommends authorizing the refunding of these bonds by exercising the Extraordinary Optional Redemption provisions of the 2010B Bonds to retain the flexibilit
y to
mitigate this exposure.

Though the issuance of these 2026 Series B Bonds may
result in savings below typical thresholds for refunding transactions, actual cash flow savings might remain positive depending on interest rates and the release of reserve funds at the time of sale. Mor
e importantly, this transaction will
create added future refunding flexibility and eliminate the Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 5 ends

significant financial risk of the subsidy going to zero, replacing taxable bonds with tax -exempt bonds with a
greater ability to redeem the bonds for further flexibility.

The 2026 Series A Wastewater Bonds are sized to fund prior expenditures for Biosolids Digester Facilities Project which were originally financed by Commercial Paper, as well as to fund additional spending for the project through January 2027. Retiring outstanding Commercial Paper allow s the Wastewater Enterprise to enter into additional contracts in reliance on the availability of commercial paper to fund budget appropriation releases.

The Wastewater Enterprise is facing significant future rate pressure to fund its large capital program. The structuring outlined above is intended to mitigate those pressures while also mitigating tax risk by carefully navigating complex tax rules governing the issuance of low er-cost tax- exempt financing. Unlike the funding of the Water Enterprise’s Water System Improvement Program (WSIP), for which the capital program costs were spread over the much larger retail and wholesale water rate base, the costs of the Wastewater
Enterprise’s capital investments will need to be spread over a smaller sewer service area rate base . As a result , the SFPUC has been amortizing high- cost financing more
quickly and using longer term financing for the lowest cost forms of borrowing.

To mitigate such rate pressure, the SFPUC utilizes a broad range of funding instruments and structuring options for the Wastewater Enterprise. In addition to structuring strategies such as those described above, staff also incorporate grants, subsidized loans, low-cost State (SRF) and federal (WIFIA) loans, a Commercial Paper Interim Funding Program, and a combination of long- and shorter-term revenue bonds in the SFPUC’s portfolio of financing tools. The SFPUC can also manage the impact of changes in prevailing interest rates through the amortization of the debt, which changes the average life of each borrowing.

Structure of the Bonds:

(1) 2026 Series A Bonds – The SFPUC expects to issue
up to $506,000,000 to fund certain costs related to the Biosolids Digester Facilities Project on a taxable basis, Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 6 ends

and to fund capitalized interest. The 202 6 Series A
Bonds would be structured as taxable fixed rate bonds
with a final maturity not-to-exceed five years and
include capitalized interest through April 2028. The
interest rates will be determined on the transaction
date and will remain fixed for the term of the bonds.

(2) 2026 Series B Bonds – The SFPUC expects to issue
up to $556,000,000 to refund or partially refund certain outstanding wastewater revenue bonds. The 2026
Series B Bonds would be structured as tax -exempt
fixed rate bonds with a maturity based on the term of
the bonds to be refunded as no extension of principal
is anticipated. The interest rates will be determined on the transaction date and will remain fixed for the term of the bonds.

Schedule for 2026 Wastewater Bonds: The two series of
the 2026 Wastewater Bonds are anticipated to be priced during the same week in early August, although the taxable new money bonds (Series A) and the tax -exempt refunding bonds (Series B) will be priced on separate days. Both series will then close on the same day mid-August. Due to their different bond struct ures, the two series will be marketed pursuant to separate Preliminary Official Statements. All dates are preliminary and subject to change on market
conditions.

Analysis of Financing Alternatives: As part of the
Wastewater Enterprise’s 10-Year Financial Plan, the SFPUC analyzes financing options for the capital program, taking into consideration capital project funding needs and timing, available financing alternatives, and market conditions and impacts on the ratepayers. For each financing, SFPUC
Capital Finance staff examines the most cost -effective financing structure within the context of the overall capital plan in consultation with Municipal Advisors, bankers and legal advisors.

SFPUC Finance staff has reviewed the Wastewa ter
Enterprise’s outstanding debt portfolio and capital financing needs and recommends primary funding through long- term fixed rate revenue bonds.

Based on this review, staff has
determined that these transactions minimize costs and meet near-term construction contract award and payment
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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requirements. However, the Commission utilizes certain
strategic short -term financing products such as its
Commercial Paper Interim Funding program, short term
revenue notes, subsidized loans, low-cost State (SRF) and federal (WIFIA) loans , and grants to mitigate costs and create economies of scale. SFPUC staff continues to
evaluate other strategies related to future debt with the goal of mitigating the impact of planned capital expenditures.

The Biosolids Digester Facilities Project was originally envisioned as a tax-exempt facility, and it is still hoped that it will remain so . The digesters take wastewater effluent and convert it to high quality fertilizer (biosolids) and produces exhaust gas that can be further processed into methane for renewable energy. However, due to the evolving nature of the biogas utilization component of the facility , the project team will need to solidify and confirm plans for the offtake of bio-methane produced by the new digesters before further tax-exempt debt can be issued for this project. In developing these plans, the SFPUC intends to preserve the tax-exempt status of the entire Biosolids project and to have these plans affirmed by tax counsel . As such, additional funding for the project as part of this financing will be issued on a short duration, taxable basis until plans are finalized, a t which point the taxable bonds can potentially be re-financed with tax-exempt long-term revenue bonds, if appropriate.

Additionally, as mentioned above, the SFPUC is assessing whether tax credits from the Inflation Reduction Act could be applied to this project , and staff are working with SFPUCs legal and municipal advisors to determine whether it would be advantageous to continue financing on a taxable basis to maximize potential federal refundable credits.

SB 450 Legislation Compliance: I n 2017, California
Senate Bill 450 (SB 450) was enacted. SB 450 requires the governing body of a local public body to obtain and disclose, prior to authorization of a new bond issue, good faith
estimates of the following financing-related information:

1. True Interest Cost (TIC) of the bonds.

2. Finance charge of the bonds: This represent s the
sum of all fees and charges paid to third parties.

3. Amount of proceeds received: This represents
proceeds of the bonds net of the fees and charges
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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paid to third parties and any reserves or capitalized
interest funded by the bonds.

4. Total payment amount: This represents the sum of all debt service payments on the bonds calculated to the
final maturity of the bonds.

SB 450 requires that the good f aith estimates be obtained from either the issuer’s municipal advisor, underwriter or third-party lender. Staff has consulted with its co- municipal advisor, Montague DeRose & Associates LLC, and obtained estimates with regard to the respective 202 6 Wastewater Bonds.

The Commission has been presented this information for
recent capital financing transactions as required and was last presented with this type of required information as part of its approval of the Lower Alemany State Revolving Fund (SRF) loan on July 14, 2026. The Commission will continue to be presented with
this information for all future bond
authorization requests as required under SB 450, as well as other capital financings as needed.

The following represents a good faith reasonable estimate of certain costs for each bond sale for purposes of compliance with SB 450, based upon information available as of June 23, 2026. Actual results will be determined on the pricing date of the bonds and will likely vary based on interest rate and other market and structuring changes.

1. True Interest Cost:

2026 Series A Wastewater Revenue Bonds
(Federally Taxable): 4.9000%
2026 Series B Wastewater Revenue Bonds: 3.3625%

2. Finance Charge of the Bonds (reflects costs of
issuance and underwriter’s discount):

2026 Series A Wastewater Revenue Bonds
(Federally Taxable): $1,299,006.13
2026 Series B Wastewater Revenue Bonds:
$1,493,603.08

3. Amount of Proceeds Received by the Public Body
for Sale of the Bonds (net of reserves or
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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capitalized interest (“CAPI”) deposits and the
finance charge of the bonds):

2026 Series A Wastewater Revenue Bonds
(Federally Taxable): $373,001,012.87
2026 Series B Wastewater Revenue Bonds:
$476,867,888.57

4. Total Payment Amount (i.e., Total Net Debt
Service net of CAPI)

2026 Series A Wastewater Revenue Bonds
(Federally Taxable): $992,634,995.00
2026 Series B Wastewater Revenue Bonds:
$613,687,050.01

Method of Sale: In consultation with the SFPUC’s Municipal Advisors on this transaction (Montague DeR ose &
Associates and Backstrom McCarley & Berry), SFPUC staff has recommended a negotiated sale for the 2026
Wastewater Bonds. In a negotiated sale, the SFPUC hires underwriters for the bonds through a competitive process from among the firms that have been prequalified in the City’s underwriting pool. The underwriters are therefore able to work with the SFPUC on structuring the transaction and preparing documents, including the disclosure document. In addition, they assist with the process of preparing materials for rating agencies and investors , and premarketing and marketing of the bonds. Staff has recommended this method of sale because:
(1) unprecedented market volatility during the past two years, due to uncertainty regarding Fed monetary
policy and global events and a negotiated sale
process provides more market information and timing
flexibility which can improve the results of a bond sale;

(2) the proposed 2026 Wastewater Bond transaction
includes refinancing transactions, which are sensitive
to market conditions and/or structure considerations;
(3) the size and complexity of the proposed sale;
(4) the greater “real time” structuring flexibility in a negotiated vs competitive sale;
(5) the ability to more effectively market to sustainable bond investors in support of the SFPUC’s goal of
remaining a leader in sustainable finance; and
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

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(6) to allow the SFPUC to select diverse underwriting
teams which include smaller, minority and/or women-
owned firms as part of the underwriting team.

A R equest for P roposals was sent to all firms in the
Controller’s Office of Public Finance Underwriter Pool. A total of 20 proposals were received by January 29, 2026, and reviewed by the SFPUC’s Co -Municipal Advisors
and staff , to serve an underwriting role . After a formal evaluation and scoring process, Morgan Stanley , Inc.,
has been recommended as Bookrunning Senior
Manager for the 2026 Taxable Series A Bond sale and
RBC Capital Markets, LLC has been recommended as
Co-Senior Manager. JPMorgan Securities LLC has been
recommended as Bookrunning Senior Manager for the
2026 Tax Exempt Series B Bonds sale and Ramirez &
Co., Inc, as Co-Senior Manager. Cabrera Capital Markets LLC, Wells Fargo Corporate and Investment Banking
have been recommended as C o-Managers for all 2026
Wastewater Bonds . TD Financial Products LLC and
Raymond James & Associates, Inc. , have been
recommended as Co- Managers for the 2026 Series B
Bonds. The proposals were selected based on their
respective experience, underwriting capabilities ,
technical expertise, financing ideas , commitment of
capital, financing ideas, and competitive fees, and each of these firms have been integral participants in the
financing team that prepared the p roposed bond
transaction.

Bond Documents: The Commission is being asked to
approve the form and authorize the execution of documents relating to the Bonds, as described below.

(1) Official Statements (Preliminary/Final) – This document provides investors with information necessary to make an informed investment decision. It describes, among other things, the terms of bonds, sources of repayment, risks that should be considered in evaluating an investment in the bonds, and information about the SFPUC and the
Wastewater Enterprise (Appendix A) , including
information about the Wastewater Enterprise’s financial condition and operations. A preliminary official statement will be provided to rating agencies and prospective
investors. The form of the preliminary official statement is Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 11 ends

intended to be substantially final (except for certain
pricing information and updates that may occur prior to sale); however, the General Manager is authorized
pursuant to this resolution to make such changes as are necessary to finalize the preliminary official statement.

Following the sale, a final official statement in
substantially the form of the preliminary official statement will be prepared and delivered to purchasers. The
Commission has periodically received formal training
regarding its disclosure responsibilities, most recently on July 14, 2026.

The POS has been revised to create more simplicity in
flow to ease both readers ability to find information, as well as to facilitate review by artificial intelligence. (2) Continuing Disclosure Certificate – This document sets forth the SFPUC’s commitment to providing audited
financial statements and certain financial information and operating data on an annual basis, as well as notices of certain listed events as set forth
by the Securities and
Exchange Commission’s (SEC) Rule 15c2- 12, while the
bonds are outstanding. The Continuing Disclosure
Certificate is contained as an appendix within the Official Statement.
(3) Indentures (as amended by the Nine teenth and
Twentieth Supplemental Indentures) - The Indentures
are agreements between the SFPUC and the Trustee
which sets forth the contractual terms of the Bonds,
including the pledge of revenues, flow of funds,
covenants, defaults and remedy provisions, and
provisions to issue additional debt. The supplemental
Indentures set forth the terms of each individual series of bonds, including maturities, interest rates and early
redemption.

Additional indentures have also been
executed in conjunction with other parity borrowing, such as Federal WIFIA loans.
(4) Bond Purchase Contract s – The agreement s between
the SFPUC and the Underwriters setting forth conditions upon which the bonds will be offered and underwritten by the Underwriters, including provisions allowing the
Underwriters to not underwrite the bonds in the event of certain circumstances.
(5) Escrow Agreement – Related to the refunding, it is the agreement with the escrow agent (typically the Trustee) Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 12 ends

to hold the escrow securities that are purchased with
proceeds of the refunding bonds and used to legally
defease the refunded bonds through the bonds’ first
optional redemption date. The agreement also outlines
the roles and responsibilities of the escrow agent to pay debt service on the refunded bonds until their redemption date.

Legal and Advisory Team: SFPUC Capital Finance
staff worked collaboratively with outside municipal
advisors, as well as the City Attorney’s Office and outside co-bond and disclosure counsel, to develop all aspects of the documents associated with the sale of the 20 26
Wastewater Bonds, including all attachments. The
professionals working with the SFPUC on this financing
are as follows:
• Issuer Counsel: Office of the San Francisco City
Attorney
• Disclosure Counsel: Orrick, Herrington & Sutcliffe
LLP
• Bond Counsel: Norton Rose Fulbright US LLP
• Co-Municipal Advisors: Montague DeRose &
Associates and Backstrom McCarley Berry & Co.
• Trustee: U.S. Bank Trust Company National
Association
• Independent Pricing Verification Agent: PFM
California Advisors LLC
• Escrow Verification Agent: to be selected closer to
transaction pricing

In addition, the preparation of the Preliminary Official Statement has required the input of SFPUC employees
across the organization, without whom this important
document could not be completed, including in the
Wastewater Enterprise, Infrastructure and the Finance and Business Services teams.

As this transaction will be sold on a negotiated basis, per the SFPUC’s debt policies, an independent pricing verification agent—a municipal advisor not otherwise involved in the transaction—has been engaged to provide an independent
pricing report and comparative sales details to reassure that the sale provided fair pricing for the rate payers.

Disclosure Considerations: Under federal securities laws Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 13 ends

the SFPUC must disclose the financial condition of the
Wastewater Enterprise to prospective investors in the
Preliminary Official Statement and the Official Statement for the Bonds, and such disclosure must be complete and
accurate with no material misstatements or material
omissions.

The preparation of the Preliminary Official Statement reflects a rigorous and iterative drafting and review process including subject matter experts and senior management within the Wastewater Enterprise, Infrastructure and SSIP program
managers, the Office of the City Attorney , and SFPUC’s financing team. In addition, disclosure counsel Orrick, Herrington & Sutcliffe LLP, assisted in the preparation of the document. Orrick has served as the Disclosure Counsel to the SFPUC since 2010.

Prior to distribution to investors, the Preliminary Official Statement will be updated to reflect the most current
information regarding the Wastewater Enterprise. The final Official Statement will be distributed subsequent to the sale of the Bonds and will include relevant pricing- related information.

Counsel has advised that prior to approval of the form of Preliminary Official Statement, Commissioners should
review the attached documents and be satisfied that:
(1) They understand the key terms of the bond
transaction, including commitments undertaken by
the SFPUC;
(2) The process followed in the preparation of the
Preliminary Official Statement and the Official
Statement is adequate; and
(3) SFPUC officers or the City Attorney’s Office are
aware of all matters important to the financial
condition of the Wa stewater Enterprise of which
Commissioners have personal knowledge.

A summary level “Questions and Answers” about the bonds is set forth below:

Q. What is the size of the bond issue?
A. The SFPUC expects to issue in aggregate up to
$1.062 billion principal amount of the 2026
Wastewater Bonds to fund improvements (including
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 14 ends

retiring previously issued commercial paper and
refunding certain previously issued tax exempt
bonds) and capitalized interest.

Q. Why are bonds being issued?
A. The 2026 Wastewater Bonds are being issued to
fund a portion of the Wastewa ter Enterprise’s capital
improvement program, primarily the Biosolids
Digester Facilities Project. The bonds will also fund
capitalized interest and costs of issuing and
underwriting the bonds. Additional amounts to refund
up to $465 million of outstanding bonds.

Q. What is the bond structure?
A. The 2026 Wastewater Bonds will be issued as
senior lien fixed rate bonds, with a final maturity of 30 years or less. The 2026 Series A Bonds will be on a
taxable basis and the 2026 Series B Bonds will be
issued on a tax-exempt basis. The 2026 Wastewater
Bonds will not fund a debt service reserve fund, but
will fund capitalized interest for any new money costs
and will fund the costs of issuance and bond
underwriting fees.

Q. How will the Bonds be sold?
A. The SFPUC has engaged an underwriting
syndicate led by Morgan Stanley and JPMorgan
Securities LLC , together with four co- managers, to
market and price the bonds based on investor
demand and market conditions at the time of sale.

The SPFUC’s Municipal Advisors will assist SFPUC
in negotiating the final interest rates with the
Underwriters. In addition, a pricing consultant (PFM
Financial Advisors LLC) has been engaged to
independently monitor and verify that the pricing is
fair.

Q. How will debt service on the Bonds be paid?
A. Except as described below, t he 2026 Wastewater
Bonds will be repaid from “net revenues” of the
Wastewater Enterprise, in accordance with the
Wastewater Indenture, the primary source of which is
rates and charges. Net revenues are those revenues
remaining after the payment of Operating and
Maintenance Expenses of the Wa stewater
Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 15 ends

Enterprise. The Commission intends that the principal
of the taxable 2026 Series B Bonds will be refinanced
with tax-exempt or taxable bonds, or other sources of
funds which do not constitute net revenues.

Q. If the 20 26 Wastewater Bonds for new
improvements are issued in an amount up to
$506,000,000, how much debt will be payable from
the revenues of the Wastewater Enterprise?
A. Including the 20 26 Wastewater Bonds, and
approximately $391 million in Parity State SRF Loans,
the Wastewater Enterprise will have approximately
$4.19 billion in long -term debt outstanding. Further, SFPUC has executed $1. 58 billion in parity WIFIA
loans and has draw n $1.37 billion. The Wastewater
Enterprise has remaining $212 million in undrawn
WIFIA capacity and $170 million in undrawn S tate
SRF loan capacity. In addition to this long-term debt,
the SFPUC’s 2009 Golden Gate Certificates of
Participation payment obligation is also payable from
the revenues of the Wastewater Enterprise on a
subordinate basis as well as costs related to
commercial paper , revolving notes and direct bank
agreements.

Q. What impact will the issuance of the 20 26
Wastewater Bonds have on Wa stewater
Enterprise rates?
A. Debt service and debt service coverage
requirements have been included in the current 10-
Year Financial Plan for Fiscal Years 2026-27 through
2035-36. The plan projects estimated annual sewer
rate increases of 15.0% for Fiscal Year 2026- 27,

14.5% for Fiscal Year 2027- 28, and 13.0% for Fiscal
Years 2028- 29 through 2029- 30. The 2026
Wastewater Bonds are being sold to meet the funding
needs of the Wastewater Enterprise Capital Plan.

Future projected debt in the plan assumes a 30- year
term with level debt service and interest rates of

4.75% for Fiscal Year 2026- 27, 5.0% for Fiscal Year
2027-28, and 6.0% for Fiscal Years 2028 -29 through
2029-30; it is expected that the structuring of the
current transaction may produce savings compared to
the assumed rates.

Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 16 ends

Q. Will issuance of the Bonds have a negative
impact on the Wa stewater Enterprise’s credit
ratings?
A. The SFPUC will apply for ratings for the 202 6
Wastewater Bonds and for confirmation of the existing
ratings of outstanding Wastewa ter Revenue Bonds.

Many factors determine future bond ratings, many of
which are beyond management ’s control , but other
factors remain in the Commission and management’s
control, including rate increase s and debt service
coverage levels. Staff expects to have further rating
agency feedback at the Commission meeting.

If there is any information Commissioners believe they need to understand the transaction as presented for approval, or to evaluate the adequacy of disclosure, or if Commissioners have important information concerning the Wastewa ter
Enterprise of which they are not sure SFPUC is aware,
Commissioners are encouraged to contact SFPUC finance
staff or the City Attorney’s Office.

Environmental
Review:

This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines Section
15378(b)(4) because it involves the creation of government funding mechanisms or other government fiscal activities that do not involve any c ommitment to any specific project that may result in a potentially significant impact on the environment.

Approval of projects to be funded through this action would only occur after the necessary environmental review process has been completed pursuant to the CEQA and any
certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects).

On February 24, 2026, and July 13, 2026, the Environmental Review Officer issued the certificates of the City and County of San Francisco Planning Department, pursuant to Section 8B.124(b) of the City Charter under Proposition E
(November 2002), certifying that the projects to be funded through the sale of Wastewater Revenue Bonds and/or
Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the CEQA or will undergo environmental review pursuant to the CEQA
when they are defined.

Agenda Title: Authorize 2026 Wastewater Revenue Bonds Sale Commission Meeting Date: July 28, 2026

Page 17 ends

View the February certificate and July certificate.

Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.

Attachments: (1) Commission Resolution - SFPUC (2026 Wastewater Bonds New Money, Series A)
(2) Commission Resolution - SFPUC (2026 Wastewater
Refunding Bonds, Series B)
(3) Form of Preliminary Official Statement (POS) 2026A (Form of Continuing Disclosure Certificate as
Appendix E)
(4) Form of Preliminary Official Statement (POS) 2026B
(Form of Continuing Disclosure Certificate as
Appendix E)
(5) Form of Nineteenth Supplemental Indenture
(6) Form of Twentieth Supplemental Indentures
(7) Form of Bond Purchase Contracts
(a) Series A (taxable)
(b) Series B (tax-exempt)
(8) Form of Escrow Agreement
303076919.5

PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________
WHEREAS, At a duly called and held election on November 5, 2002, a majority of voters voting on the measure approved Proposition E , as amended by Proposition A approved by the voters of the City on June 5, 2018, codified as Article VIIIB (“Article VIIIB”) of the Charter (the “Charter”) of the City and County of San Francisco (the “City”), which, among other things, authorized the Public Utilities Commission (the “Commission”) of the City to issue its revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City (the “Board”), for the purpose of rec onstructing, replacing, expanding, repairing, or improving water facilities, clean water (sewer) facilities, power facilities, or combinations of water, clean water (sewer), and power facilities under the jurisdiction of the Commission or for any other lawful purpose of the water, clean water (sewer), or power utilities of the City in furtherance of the purposes provided in Proposition E, subject to satisfaction of certain conditions; and

WHEREAS, The Commission adopted the Indenture dated as of January 1, 2003 (as amended and supplemented, the “Indenture”), between the Commission and U.S.

Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee thereunder (the “Trustee”); and

WHEREAS, On July 25, 2023, the Board passed by two-thirds vote Ordinance No. 181-23, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute an d deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Fund Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Pr otection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter, in an aggregate principal amount not to exceed $1,047,288,286, to finance capital projects benefiting the Commission’s Wastewater Enterprise (the “ Enterprise”), and further authorizing the approval of the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Enterprise, subject to the limitations set forth therein; and

WHEREAS, On June 11, 202 4, the Board passed by two- thirds vote Ordinance No. 125-24, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Fund Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Pr otection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter, in an aggregate principal 303076919.5 2
amount not to exceed $1,715,671,086 , to finance capital projects benefiting the Enterprise, and further authorizing the approval of the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Enterprise, subject to the limitations set forth therein; and

WHEREAS, Pursuant to Ordinance Nos. 181- 23 and 125- 24 (collectively, the “Authorizing Ordinances”), there remains as of March 1, 2026 authority to issue an additional $2,122,451,525 aggregate principal amount of bonds or other forms of indebtedness, including notes, commercial paper and other short -term indebtedness to finance capital projects benefiting the Enterprise; and

WHEREAS, Pursuant to Proposition E, Article V of Chapter 43 of Part I of the San Francisco Administrative Code, and various other ordinances and resolutions adopted by the Board and the Commission, an interim funding program for the Enterprise has been established in an aggregate principal amount not to exceed $1.125 billion (the “Authorized Short-term Indebtedness”), consisting of a $1.05 billion authorization for commercial paper (“CP Notes”) and a $75 million authorization for short -term, direct purchase revolving obligations, and as of June 30, 2026, approximately $281,251,000 aggregate principal amount of such Authorized Short -term Indebtedness has been issued or incurred and is outstanding; and

WHEREAS, The Commission has determined that it would be financially advantageous to refinance certain CP Notes with bonds (“CP Refinancing Bonds”); and

WHEREAS, Under the authority granted under Article VIIIB of the Charter (as supplemented by California Government Code Sections 53580 et seq.), and the various ordinances and resolutions adopted by the Board and the Commission thereunder, it is proposed that the Commission issue one or more series or subseries of wastewater revenue bonds, in an aggregate principal amount not to exceed $506,000,000, issued on a federally tax-exempt or taxable basis (collectively, the “2026 Bonds”), for the principal purpose of financing or refinancing (through the retirement of CP Notes ) certain capital projects and improvements to or benefiting the Enterprise; and

WHEREAS, It is proposed that the 2026 Bonds be sold in one or more series or subseries by a negotiated sale pursuant to one or more Bond Purchase Contracts (each a “Bond Purchase Contract”); and

WHEREAS, It is proposed that one or more preliminary official statements for the 2026 Bonds (each a “Preliminary Official Statement”) and one or more final official statements for the 2026 Bonds (each an “Official Statement”) be used in connection with the offering and sale of the 2026 Bonds from time to time; and

WHEREAS, It is proposed that one or more continuing disclosure certificates (each a “Continuing Disclosure Certificate”) be executed and delivered with respect to the 2026 Bonds in order to assist the underwriters thereof in complying with Securities and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”); and
303076919.5 3

WHEREAS, The Commission has been presented with and has examined a proposed form of Supplemental Indenture for each series or subseries of 2026 Bonds , and form of Bond Purchase Contract , Preliminary Official Statement and Continuing Disclosure Certificate; and

WHEREAS, The Commission is or will be duly authorized and empowered, pursuant to each and every requirement of law, to authorize the foregoing transactions and issue the 2026 Bonds and to authorize the execution and delivery, as applicable, of the Supplemental Indentures, the Bond Purchase Contracts, the Preliminary Official Statement, the Official Statement, the Continuing Disclosure Certificates and related documents, for the purposes described herein and in the manner and upon the terms provided herein; and

WHEREAS, A consulting engineer has issued or will issue a certificate to the Board in satisfaction of the requirements of clause (a) of Section 8B.124 of Proposition E, all in furtherance of the sale of wastewater revenue bonds and other forms of indebtedness, to the extent applicable; and

WHEREAS, An environmental review officer has issued or will issue a certificate to the Board in satisfaction of the requirements of clause (b) of Section 8B.124 of Proposition E, all in furtherance of the sale of wastewater revenue bonds and other forms of indebtedness; and

WHEREAS, Prior to the issuance of any CP Refinancing Bonds, the General Manager will file with the Clerk of the Board any required updates to the certificate referenced in the two prior paragraphs, including a certificate of a consulting engineer in satisfaction of the requirements of clause (a)(2) of Section 8B.124 of Proposition E, to the extent applicable; and

WHEREAS, In compliance with California Government Code Section 5852.1, the Commission has obtained from Montague DeRose and Associates, LLC , one of the municipal advisor s to the Commission with respect to the 2026 Bonds, good faith estimates of the following information: (a) the true interest cost of the 2026 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the 2026 Bonds, (c) the amount of proceeds of the 2026 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the 2026 Bonds, and (d) the sum total of all debt service payments on the 2026 Bonds calculated to the final maturity of the 2026 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the 2026 Bonds, and such estimates are disclosed and set forth in the staff report provided to the Commission in connection with this resolution; and

WHEREAS, This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines Section 15378 (b)(4) because it involves the creation of government funding mechanisms or other government fiscal activities that 303076919.5 4
do not involve any commitment to any specific project that may result in a potentially significant impact on the environment; and

WHEREAS, Approval of projects to be funded through this action would only occur after the necessary environmental review process has been completed pursuant to the CEQA and any certification required by Proposition E (approved by the voters in 2002 for water and wastewater projects); and

WHEREAS, On February 24, 2026, and July 13, 2026, the Environmental Review Officer issued the certificates of the City and County of San Francisco Planning Department, pursuant to Section 8B.124(b) of the City Charter under Proposition E (November 2002), certifying that the projects to be funded through the sale of Wastewater Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the CEQA or will undergo environmental review pursuant to the CEQA when they are defined; now, therefore, be it

RESOLVED by the Public Utilities Commission of the City and County of San Francisco, as follows:

Section 1. Issuance of the 2026 Bonds. The issuance of the 2026 Bonds in one or more series or subseries, all or a portion of which may be designated as green bonds (if applicable) and issued on one or more dates, all as may be determined by the General Manager (all references in this resolutio n to the General Manager of the Commission to include any authorized designee thereof pursuant to Section 7 hereof) in an aggregate principal amount not exceeding $506,000,000, is hereby authorized and approved by the Commission, subject to the limitations and conditions provided herein.

The 2026 Bonds may be issued for the purpose of providing funds (a) for financing or refinancing (through the retirement of CP Notes) certain capital projects and improvements to or benefiting the Enterprise and (b) to pay the costs of issuance of the 2026 Bonds. If determined to be beneficial to the Commission by the General Manager, with the advice of Montague DeRose and Associates, LLC and Backstrom McCarley Berry & Co., LLC, the Commission’s municipal advisors (the “Municipal Advisors”) , the 2026 Bonds may also be issued for the secondary purposes of providing funds to pay for (i) any credit enhancement of any 2026 Bonds (including without limitation bond insurance policies and/or reserve fund surety bonds or insurance policies) and (ii) the funding of debt service reserves for the 2026 Bonds or for other bonds issued under the Indenture.

The General Manager is hereby authorized and directed to determine the aggregate principal amount of 2026 Bonds to be issued from time to time (subject to the maximum amounts and further limitations and conditions set forth herein) and to determine the var ious titles and series designations (including the designation of any series of bonds as “notes”) of the 2026 Bonds. The 2026 Bonds may be issued as obligations the interest on which is or is not subject to federal income tax. The forms of the 2026 Bonds, in substantially the forms set forth in the forms of the Supplemental Indenture presented to this meeting, are hereby approved. The General Manager of the 303076919.5 5
Commission is hereby authorized and directed to approve and to execute the 2026 Bonds by manual or facsimile signature, and the Director of Commission Affairs (who is also the Secretary of the Commission for purposes of the Indenture) is hereby authorized and directed to attest, by manual or facsimile signature, with such changes, additions, amendments or modifications thereto which they may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the issuance of the 2026 Bonds, subject to the limitations set forth in Section 2 hereof.

Section 2. Sale of the 2026 Bonds; Bond Purchase Contract. The sale of the 2026 Bonds, in one or more series or subseries and on one or more dates, is hereby authorized and approved by the Commission pursuant to the Charter (as supplemented by California Government Code Sections 53580 et seq.), the Authorizing Ordinances and this Resolution, and subject to the limitations and conditions provided herein. Subject to the other limitations provided herein, the interest rate or rates on the 2026 Bonds shall not exceed twelve percent (12%) and the final maturity of any 2026 Bonds shall not exceed 40 years from their date of issuance.

The proposed form of Bond Purchase Contracts, submitted to the Commission, are hereby approved. The General Manager is authorized to select and appoint one or more underwriters (each, an “Underwriter,” and collectively, the “Underwriters”) from the Commission’s or the City’s pool of pre- qualified underwriters subject to a competitive procurement process and in accordance with the City’s policies and procedures with respect thereto, subject to the limits on Underwriters’ compensation set forth below. The General Manager is hereby authorized and directed, for and on behalf of and in the name of the Commission, to sell in one or more negotiated sales with such Underwriter or Underwriters, the 2026 Bonds in such aggregate principal amount as the General Manager may determine, subject to the further limitations and conditions hereof. The General Manager is hereby authorized to enter into one or more Bond Purchase Contracts with one or more of the Underwriters, individually or collectively as the General Manager de ems appropriate, substantially in the form presented at this meeting, with such changes and additions as the General Manager may approve upon consultation with the City Attorney, such approval to be evidenced conclusively by the execution and delivery of e ach such Bond Purchase Contract; provided, however, that the total compensation to the Underwriter(s), inclusive of all expense reimbursement, with respect to the 2026 Bonds shall not exceed 0.4 % of the aggregate par value of the 2026 Bonds to be sold purs uant to the applicable Bond Purchase Contract. The 2026 Bonds sold in such negotiated sale shall be delivered to the Underwriters upon payment of the purchase price agreed upon in the applicable Bond Purchase Contract. The Director of Commission Affairs is directed to file a copy of said form of Bond Purchase Contract with the minutes of this meeting.

The Commission’s Debt Management Policies and Procedures authorize the General Manager to approve a “negotiated sale” (as distinct from a “competitive sale”) of Commission bonds to an underwriter “if deemed necessary for a successful offering. ” Following a detailed review of options and considerations presented by our Municipal Advisors, the Capital Finance Director and the Chief Financial Officer have recommended a negotiated sale would offer the best opportunity for a successful offering and authorized 303076919.5 6
a competitive solicitation of underwriters to assist in such a sale. Based upon review of these recommendations and the final proposed transaction structured by the financing team, the General Manager has approved the negotiated sale of the 2026 Bonds set forth in this Commission approval.

Section 3. Disposition of Revenues; Pledge of Net Revenues; Rate Covenant .

Section 5.01(b) of the Indenture, which sets forth the disposition of Revenues (as defined in the Indenture) applicable to the 2026 Bonds relating to the Enterprise is hereby confirmed by the Commission and the Commission further confirms, pledges and covenants with the holders of the 2026 Bonds that the Revenues shall be appropriated and expended in the order of priority set forth in Section 5.01(b) of the Indenture and the 2026 Bonds shall be subject to the pledge of Net Revenues (as defined in the Indenture) as set forth in Section 5.01(c) of the Indenture, as the same may be amended from time to time. The Commission also declares that the Commission will comply with all of the terms, provisi ons and covenants contained in the Indenture, as the same may be amended from time to time, including the covenants to establish, fix and prescribe rates, fees and charges sufficient to enable the Commission to comply with the terms, conditions and covenants of the Indenture.

Section 4. Supplemental Indentures . The proposed form of Supplemental Indenture for each series and/or subseries of 2026 Bonds submitted to the Commission, and the terms and conditions thereof, are hereby approved. The General Manager is hereby authorized and directed to execute and deliver and the Director of Commission Affairs or the Director of Commission Affairs’ designee is authorized to attest to one or more Supplemental Indentures in such form, with such additions thereto or changes therein which they may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of such Supplemental Indentures.

The Director of Commission Affairs is directed to file a copy of the form of Supplemental Indenture with the minutes of this meeting. Subj ect to the further limitations hereof, the principal amount, date, maturity date or dates, maximum interest rate or rates, series designation, interest payment dates, forms, registration privileges, place or places of payment, terms of redemption, insurance provisions and other terms of the 2026 Bonds shall be as provided in the Indenture.

Section 5. Preliminary Official Statement and Official Statement. The Preliminary Official Statement for the 2026 Bonds (with any supplements thereto, the “Preliminary Official Statement”), in substantially the form submitted to the Commission, is hereby approved, and the General Manager (or their designee) is hereby aut horized to certify from time to time, for and on behalf of the Commission, that the Preliminary Official Statement, with such changes, additions and supplements as they may deem necessary or appropriate in the interest of the Commission, in consultation with the City Attorney, is deemed final as of its date, within the meaning of Rule 15c2- 12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Preliminary Official Statement is hereby authorized to be used from time to time in connection with the marketing of the 2026 Bonds. In connection with the sale of all or a portion of the 2026 Bonds, the General Manager (or their designee) is hereby authorized and directed, for and on behalf of the Commission, to execute an Official Statement for 303076919.5 7
the 2026 Bonds (with any supplements thereto, the “Official Statement"), in substantially the form of the Preliminary Official Statement, and to cause the delivery of such Official Statement to the purchasers or underwriters of the 2026 Bonds.

Section 6. Continuing Disclosure Certificates . The proposed form of Continuing Disclosure Certificate for the 2026 Bonds, submitted to the Commission, is hereby approved. The General Manager is hereby authorized and directed to execute one or more Continuing Disclosure Certificates for the 2026 Bonds f rom time to time, substantially in the form submitted to the Commission, with such additions, changes and corrections thereto as the General Manager shall approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of such Continuing Disclosure Certificate. The Director of Commission Affairs is directed to file a copy of said form of Continuing Disclosure Certificate with the minutes of this meeting.

Section 7. General Authority. The General Manager or acting General Manager , is hereby authorized and directed, each acting alone, for and in the name and on behalf of the Commission, to execute and deliver any and all documents, certificates and representations, including, but not limited to, signature certificates, no- litigation certificates, tax certificates, letters of representation relating to book -entry registration, custody agreements, filing agent agreements and listing agreements, to contract for municipal b ond insurance for all or a portion of the 2026 Bonds if determined by the General Manager, with the advice of the Municipal Advisor s, to be beneficial to the Commission, to contract for one or more surety bonds or insurance policies for the debt service reserves for the 2026 Bonds if determined by the General Manager, with the advice of the Municipal Advisor s, to be beneficial to the Commission, to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to accomplish the intent and purposes of this resolution including the issuance and sale of the 2026 Bonds, the financing or refinancing of the project, the retirement of commercial paper, and the other actions which the Commission has approved in this resolution. The General Manager or acting General Manager may delegate the authority in this resolution to the Deputy General Manager and Chief Operating Officer; the Chief Financial Officer and Assistant General Manager, Business Services; or any Deputy Chief Financial Officer of the Commission, as the General Manager or the acting General Manager deems necessary or appropriate.

Section 8. Good-Faith Estimates. The Commission acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.

Section 9. Ratification. All actions heretofore taken by the officers, employees and agents of the Commission with respect to the authorization, sale and issuance of the 2026 Bonds and the authorizations under this Resolution prior to the date hereof and in accordance with the provisions hereof are hereby approved, confirmed and ratified.

303076919.5 8
Section 10. Effective Date . This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting on July 28, 2026.

Director of Commission Affairs
San Francisco Public Utilities Commission

303074017.5

PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________
WHEREAS, At a duly called and held election on November 5, 2002, a majority of voters voting on the measure approved Proposition E , as amended by Proposition A approved by the voters of the City on June 5, 2018, codified as Article VIIIB (“Article VIIIB”) of the Charter (the “Charter”) of the City and County of San Francisco (the “City”), which, among other things, authorized the Public Utilities Commission (the “Commission”) of the City to issue its revenue bonds, including notes, commercial paper or other forms of indebtedness, including refunding indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City (the “Board”), for the purpose of reconstructing, replacing, expanding, repairing, or improving water facilities, clean water (sewer) facilities, power facilities, or combinations of water, clean water (sewer), and power facilities under the jurisdiction of the Commission or for any other lawful purpose of the water, clean water (sewer), or power utilities of the City in furtherance of the purposes provided in Proposition E, subject to satisfaction of certain conditions; and

WHEREAS, The Commission adopted the Indenture dated as of January 1, 2003 (as amended and supplemented, the “Indenture”), between the Commission and U.S.

Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee thereunder (the “Trustee”); and

WHEREAS, On June 11, 202 4, the Board passed by two- thirds vote Ordinance No. 125-24, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Fund Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Pr otection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter, in an aggregate principal 303074017.5 2
amount not to exceed $1,715,671,086 , to finance capital projects benefiting the Enterprise, and further authorizing the approval of the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Enterprise, subject to the limitations set forth therein; and

WHEREAS, Pursuant to Ordinance Nos. 181-23 and 125-24, there remains as of March 1, 2026 authority to issue an additional $ 2,122,451,525 aggregate principal amount of bonds or other forms of indebtedness, including notes, commercial paper and other short-term indebtedness to finance capital projects benefiting the Enterprise; and

WHEREAS, Charter Section 9.109 authorizes the Board to provide for the issuance of revenue refunding bonds, for which no voter approval is required, for the purpose of refunding any outstanding revenue bonds of the City provided such refunding bonds are expected to result in net debt service savings to the City on a present value basis, calculated as provided by ordinance; and

WHEREAS, Pursuant to Ordinance No. 125- 24 (the “Refunding Ordinance”), the Commission is authorized to issue refunding wastewater revenue bonds without limitation as to principal amount, so long as such refunding bonds comply with, among other conditions, the refunding results in at least 3% net present value debt service savings or the Commission makes certain findings that justify the waiver of such savings requirement and/or other conditions; and

WHEREAS, The Commission has previously issued a series of Bonds under the Indenture designated the Wastewater Revenue Bonds, 2010 Series B (Federally Taxable – Build America Bonds – Direct Payment) (the “2010B Bonds”), in the original principal amount of $192,515,000, as more specifically described in that certain First Supplemental Indenture, dated as of May 1, 2010, by and between the Commission and the Trustee; and

WHEREAS, The Commission has previously issued a series of Bonds under the Indenture designated the Wastewater Revenue Bonds, 2013 Series B (the “2013B Bonds”), in the original principal amount of $331,585,000, as more specifically described in that certain Third Supplemental Indenture, dated as of February 1, 2013, by and between the Commission and the Trustee; and

WHEREAS, The Commission has previously issued a series of Bonds under the Indenture designated the (i) Wastewater Revenue Bonds, 2016 Series A (Green Bonds) (the “2016A Bonds”), and (ii) Wastewater Revenue Bonds, 2016 Series B (the “2016B Bonds”), in the original principal amount of $308,400,000, as more specifically described in that certain Fourth Supplemental Indenture, dated as of May 1, 2016, by and between the Commission and the Trustee; and

WHEREAS, Under the authority granted under Article VIIIB of the Charter and/or Section 9.109 of the Charter, and the various ordinances and resolutions adopted by the Board and the Commission thereunder, it is proposed that the Commission issue one or 303074017.5 3
more series or subseries of wastewater revenue refunding bonds, in an aggregate principal amount not to exceed $556,000,000, issued on a federally tax-exempt or taxable basis (collectively, the “2026 Refunding Bonds”), for the principal purpose of refunding all or a portion of the outstanding 2010B Bonds, 2013B Bonds, 2016A Bonds, 2016B Bonds and other outstanding wastewater revenue bonds of the Commission issued under the Indenture (the “Refunded Bonds”) for debt service savings or as otherwise authorized by such ordinances; and

WHEREAS, It is proposed that the 2026 Refunding Bonds be sold in one or more series or subseries by a negotiated sale pursuant to one or more Bond Purchase Contracts (each a “Bond Purchase Contract”); and

WHEREAS, It is proposed that one or more preliminary official statements for the 2026 Refunding Bonds (each a “Preliminary Official Statement”) and one or more final official statements for the 2026 Refunding Bonds (each an “Official Statement”) be used in connection with the offering and sale of the 2026 Refunding Bonds from time to time; and

WHEREAS, It is proposed that one or more continuing disclosure certificates (each a “Continuing Disclosure Certificate”) be executed and delivered with respect to the 2026 Refunding Bonds in order to assist the underwriters thereof in complying with Securi ties and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”); and

WHEREAS, The Commission has been presented with and has examined a proposed form of Supplemental Indenture for each series or subseries of 2026 Refunding Bonds, and form of Bond Purchase Contract , Preliminary Official Statement and Continuing Disclosure Certificate; and

WHEREAS, The Commission is or will be duly authorized and empowered, pursuant to each and every requirement of law, to authorize the foregoing transactions and issue the 2026 Refunding Bonds and to authorize the execution and delivery, as applicable, of the Supplemental Indentures, the Bond Purchase Contracts, the Preliminary Official Statement, the Official Statement, the Continuing Disclosure Certificates and related documents, for the purposes described herein and in the manner and upon the terms provided herein; and

WHEREAS, In compliance with California Government Code Section 5852.1, the Commission has obtained from Montague DeRose and Associates, LLC , the municipal advisor to the Commission with respect to the 2026 Refunding Bonds , good faith estimates of the following information: (a) the true interest cost of the 2026 Refunding Bonds, (b) the sum of all fees and charges paid to third parties with respect to the 2026 Refunding Bonds, (c) the amount of proceeds of the 2026 Refunding Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the 2026 Refunding Bonds , and (d) the sum total of all debt service payments on the 2026 Refunding Bonds calculated to the final maturity of the 2026 Refunding Bonds plus the fees and charges paid to third 303074017.5 4
parties not paid with the proceeds of the 2026 Refunding Bonds, and such estimates are disclosed and set forth in the staff report provided to the Commission in connection with this resolution; and

WHEREAS, This action does not constitute a project under the California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4) because it involves the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to any specific project that may result in a potentially significant impact on the environment; and

RESOLVED by the Public Utilities Commission of the City and County of San Francisco, as follows:

Section 1. Issuance of the 2026 Refunding Bonds . The issuance of the 2026 Refunding Bonds in one or more series or subseries, all or a portion of which may be designated as green bonds (if applicable) and issued on one or more dates, all as may be determined by the General Manager (all references in this resolution to the General Manager of the Commission to include any authorized designee thereof pursuant to Section 8 hereof) in an aggregate principal amount not exceeding $556,000,000, is hereby authorized and approv ed by the Commission, subject to the limitations and conditions provided herein.

The issuance of the 2026 Refunding Bonds is authorized and approved subject to the applicable limitations and conditions of the Charter and the Refunding Ordinance and the requirements of the Indenture and the applicable requirements of the Commission’s policies and procedures for refunding bonds. The Refunded Bonds shall be selected by the General Manager, in consultation with Montague DeRose and Associates, LLC and Backstrom McCarley Berry & Co., LLC, the municipal advisors to the Commission with respect to the 2026 Refunding Bonds (together, the “Municipal Advis ors”), upon a determination that the refunding meets the requirements described in the preceding sentence and would be financially advantageous to the Commission and its operations.

The proceeds of the 2026 Refunding Bonds shall be applied (a) to refund the Refunded Bonds and (b) to pay the costs of issuance of the 2026 Refunding Bonds.

303074017.5 5
The General Manager is hereby authorized and directed to determine the aggregate principal amount of 2026 Refunding Bonds to be issued from time to time (subject to the maximum amounts and further limitations and conditions set forth herein) and to determine the various titles and series designations (including the designation of any series of bonds as “notes”) of the 2026 Refunding Bonds. The 2026 Refunding Bonds may be issued as obligations the interest on which is or is not subject to federal income tax. The forms of the 2026 Refunding Bonds , in substantially the forms set forth in the forms of the Supplemental Indenture presented to this meeting, are hereby approved.

The General Manager is hereby authorized and directed to approve and to execute the 2026 Refunding Bonds by manual or facsimile signature, and the Director of Commission Affairs (who is also the Secretary of the Commission for purposes of the Indenture) is hereby authorized and directed to attest, by manual or facsimile signature, with such changes, additions, amendments or modifications thereto which they may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the issuance of the 2026 Refunding Bonds , subject to the limitations set forth in Section 2 hereof.

The Commission finds, in relation to the 2010B Bonds, which are Build America Bonds under Section 54AA of the Internal Revenue Code, that the following significant non- economic factors do exist (impacting such Commission payment obligations):
• the federal subsidy rate originally provided to the 2010B Bonds has been reduced and such reduced subsidy rate has applied for many years and is at risk of being reduced further or eliminated through legislation or otherwise; and
• the exclusion of interest from owners ’ income subject to federal income taxation or other tax benefits available to the 2010B Bonds could be diminished or eliminated through legislation or otherwise.

The Commission hereby finds in respect of the refunding of the 2010B Bonds that the foregoing factors justify waiver of the conditions set forth in Section 3 of the Refunding Ordinance that require three percent (3%) net present value debt service savings apply, that limit extension of the final maturity of the 2010B Bonds, that limit adjustment of principal payments and term in relation to the useful life of the underlying capital asset funded through the 2010B Bonds and that require delivery of a bond ref unding savings report. Such conditions are hereby waived. In addition, such savings and other refinancing parameters and reports, to the extent applicable to the 2010B Bonds , set forth in the Commission’s Debt Management Policies and Procedures are hereby waived.

Section 2. Sale of the 2026 Refunding Bonds; Bond Purchase Contracts. The sale of the 2026 Refunding Bonds , in one or more series or subseries and on one or more dates, is hereby authorized and approved by the Commission pursuant to the Charter (as supplemented by California Government Code Sections 53580 et seq.), the Refunding Ordinance and this Resolution, and subject to the limitations and conditions provided herein. Subject to the other limitations provided herein, the interest rate or rates on the 303074017.5 6
2026 Refunding Bonds shall not exceed twelve percent (12%) and the final maturity of any 2026 Refunding Bonds shall not exceed 40 years from their date of issuance.

The General Manager is hereby authorized to enter into one or more Bond Purchase Contracts with one or more of the Underwriters, individually or collectively as the General Manager deems appropriate, substantially in the form presented at this meeting, with such changes and additions as the General Manager may approve upon consultation with the City Attorney, such approval to be evidenced conclusively by the execution and delivery of each such Bond Purchase Contract; provided, however, that the total compensation to the Underwriter(s), inclusive of all expense reimbursement, with respect to the 2026 Refunding Bonds shall not exceed 0.4 % of the aggregate par value of the 2026 Refunding Bonds to be sold pursuant to the applicable Bond Purchase Contract.

The 2026 Refunding Bonds sold in such negotiated sale shall be delivered to the Underwriters upon payment of the purchase price agreed upon in the applicable Bond Purchase Contract. The Director of Commission Affairs is directed to file a copy of said form of Bond Purchase Contract with the minutes of this meeting.

The Commission’s Debt Management Policies and Procedures authorize the General Manager to approve a “negotiated sale” (as distinct from a “competitive sale”) of Commission bonds to an underwriter “if deemed necessary for a successful offering. ” Following a detailed review of options and considerations presented by our Municipal Advisors, the Capital Finance Director and the Chief Financial Officer have recommended a negotiated sale would offer the best opportunity for a successful offering and authorized a competitive solicitation of underwriters to assist in such a sale. Based upon review of these recommendations and the final proposed transaction structured by the financing team, the General Manager has approved the negotiated sale of the 2026 Bonds set forth in this Commission approval.

Section 3. Disposition of Revenues; Pledge of Net Revenues; Rate Covenant .

Section 5.01(b) of the Indenture, which sets forth the disposition of Revenues (as defined in the Indenture) applicable to the 2026 Refunding Bonds relating to the Enterprise is hereby confirmed by the Commission and the Commission further confirms, pledges and covenants with the holders of the 2026 Refunding Bonds that the Revenues shall be appropriated and expended in the order of priority set forth in Section 5.01(b) of the Indenture and the 2026 Refunding Bonds shall be subject to the pledge of Net Revenues (as defined in the Indenture) as set forth in Section 5.01(c) of the Indenture, as the same 303074017.5 7
may be amended from time to time. The Commission also declares that the Commission will comply with all of the terms, provisions and covenants contained in the Indenture, as the same may be amended from time to time, including the covenants to establish, fix and prescribe rates, fees and charges sufficient to enable the Commission to comply with the terms, conditions and covenants of the Indenture.

Section 4. Supplemental Indentures . The proposed form of Supplemental Indenture for each series and/or subseries of 2026 Refunding Bonds submitted to the Commission, and the terms and conditions thereof, are hereby approved. The General Manager is hereby authorized and directed to execute and deliver and the Director of Commission Affairs or the Director of Commission Affairs’ designee is authorized to attest to one or more Supplemental Indentures in such form, with such additions thereto or changes therein which they may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of such Supplemental Indentures. The Director of Commission Affairs is directed to file a copy of the form of Supplemental Indenture with the minutes of this meeting. Subject to the further limitations hereof, the principal amount, date, maturity date or dates, maximum interest rate or rates, series designation, interest payment dates, forms, registration privileges, place or places of payment, terms of redemption, insurance provisions and other terms of the 2026 Refunding Bonds shall be as provided in the Indenture.

Section 5. Escrow Agreement . The proposed form of the Escrow Agreement submitted to the Commission, and the terms and conditions thereof, is hereby approved.

In order to implement the refunding of some or all of the Refunded Bonds, the General Manager (or their designee) is hereby authorized to enter into the Escrow Agreement with the Trustee, as escrow agent for the Refunded Bonds, substantially in the form presented at this meeting and on file with the Director of Commission Affairs, with such changes and additions as the General Manager may approve upon consultation with the City Attorney, such approval to be evidenced conclusively by the execution and delivery of the Escrow Agreement. The Director of Commission Affairs is directed to file a copy of said form of Escrow Agreement with the minutes of this meeting.

Section 6. Preliminary Official Statement and Official Statement. The Preliminary Official Statement for the 2026 Refunding Bonds (with any supplements thereto, the “Preliminary Official Statement”), in substantially the form submitted to the Commission, is hereby approved, and the General Manager (or their designee) is hereby authorized to certify from time to time, for and on behalf of the Commission, that the Preliminary Official Statement, with such changes, additions and supplements as they may deem necessary or appropriate in the interest of the Commission, in consultation with the City Attorney, is deemed final as of its date, within the meaning of Rule 15c2- 12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Preliminary Official Statement is hereby authorized to be used from time to time in connection with the marketing of the 2026 Refunding Bonds. In connection with the sale of all or a portion of the 2026 Refunding Bonds, the General Manager (or their designee) is hereby authorized and directed, for and on behalf of the Commission, to execute an Official Statement for the 2026 Refunding Bonds (with any supplements thereto, the 303074017.5 8
“Official Statement"), in substantially the form of the Preliminary Official Statement, and to cause the delivery of such Official Statement to the purchasers or underwriters of the 2026 Refunding Bonds.

Section 7. Continuing Disclosure Certificates . The proposed form of Continuing Disclosure Certificate for the 2026 Refunding Bonds , submitted to the Commission , is hereby approved. The General Manager is hereby authorized and directed to execute one or more Continuing Disclosure Certificates for the 2026 Refunding Bonds from time to time, substantially in the form submitted to the Commission , with such additions, changes and corrections thereto as the General Manager shall approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of such Continuing Disclosure Certificate. The Director of Commission Affairs is directed to file a copy of said form of Continuing Disclosure Certificate with the minutes of this meeting.

Section 8. General Authority. The General Manager or acting General Manager is hereby authorized and directed, each acting alone, for and in the name and on behalf of the Commission, to execute and deliver any and all documents, redemption notices and conditional redemption notices, certificates and representations, including, but not limited to, signature certificates, no-litigation certificates, tax certificates, letters of representation relating to book -entry registration, custody agreements, filing agent agreemen ts and listing agreements, to contract for municipal bond insurance for all or a portion of the 2026 Refunding Bonds if determined by the General Manager, with the advice of the Municipal Advisor, to be beneficial to the Commission, to contract for one or more surety bonds or insurance policies for the debt service reserves for the 2026 Refunding Bonds if determined by the General Manager, with the advice of the Municipal Advisor, to be beneficial to the Commission, to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to accomplish the intent and purposes of this resolution including the issuance and sale of the 2026 Refunding Bonds and the other actions which the Commission has approved in this resolution. The General Manager or acting General Manager may delegate the authority in this resolution to the Deputy General Manager and Chief Operating Officer; the Chief Financial Officer and Assistant General Manager, Business Services; or any Deputy Chief Financial Officer of the Commission, as the General Manager or the acting General Manager deems necessary or appropriate.

Pursuant to the Refunding Ordinance, the Commission shall within 30 days of sale and issuance of the 2026 Refunding Bonds provide a refunding savings report prepared by its Municipal Advisors (that reflects at least a 3% net present value debt service savings) to the Board, together with a copy of the final Official Statement with respect to such series of 2026 Refunding Bonds. The foregoing report requirement shall not apply to 2026 Refunding Bonds or portions thereof that refunded bonds for which a waiver applies under Section 1 hereof.

Section 9. Good-Faith Estimates. The Commission acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are 303074017.5 9
disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.

Section 10. Ratification. All actions heretofore taken by the officers, employees and agents of the Commission with respect to the authorization, sale and issuance of the 2026 Refunding Bonds and the authorizations under this Resolution prior to the date hereof and in accordance with the provisions hereof are hereby approved, confirmed and ratified.

Section 11. Effective Date . This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting on July 28, 2026.

Director of Commission Affairs
San Francisco Public Utilities Commission

PRELIMINARY OFFICIAL STATEMENT DATED JULY __, 2026
NEW ISSUE – Book-Entry Only

Ratings: See “RATINGS.”
In the opinion of Norton Rose Fulbright US LLP , San Francisco, California, Bond Counsel, under existing law, interest on the 2026A Bonds is exempt from personal income taxes of the State of California. Bond Counsel expresses no opinion with respect to the exclusion from gross income for federal income tax purposes of the interest on the 2026A Bonds. Such interest is not intended to be excluded from gross income for federal income tax purposes. See “TAX MATTERS” herein.

$__________*

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BONDS, 2026 SERIES A
(FEDERALLY TAXABLE)
Dated: Date of Delivery Due: As shown on inside cover page This cover page contains certain information for quick reference only. It is not intended to be a summary of the security or terms of this issue.

Investors are instructed to read the entire Official Statement, including the appendices hereto, to obtain information essent ial to making an informed investment decision.

General. This Official Statement provides information regarding the above-captioned bonds (the “2026A Bonds”) of the Public Utilities Commission of the City and County of San Francisco (the “SFPUC”). Capitalized terms not otherwise defined on this cover shall have the meanings ascribed to such terms herein.

Authority for Issuance . The SFPUC is issuing the 2026 A Bonds pursuant to authority granted by the Charter of the City and County of San Francisco (the “City”), under Proposition E, approved by San Francisco voters on November 5, 2002. The 2026A Bonds will be issued under a supplemental indenture that supplement s the Indenture, dated as of January 1, 2003 (as amended and supplemented, the “ Indenture”), by and between the SFPUC and U.S. Bank Trust Company, National Association, as successor to U.S. Bank National Association, as trustee (the “Trustee”).

See “SECURITY FOR THE BONDS. ” All bonds, notes and other obligations of the SFPUC issued and outstanding at any given time under the Indenture, including the 2026A Bonds, and Parity Loans as the context requires, are referred to collectively in this Official Statement as the “Bonds.” Purpose. The 2026A Bonds are being issued to finance, on an interim basis, certain capital projects benefitting the Wastewater Enterprise, including the Biosolids Digester Facilities Project (as defined in Appendix A hereto), to retire Commercial Paper Notes issued to finance, on an interim basis, certain capital projects benefitting the Wastewater Enterprise, including the Biosolids Digester Facilities Project, and to pay the costs of issuance of the 2026A Bonds. See “PLAN OF FINANCE, ” “ESTIMATED SOURCES AND USES OF FUNDS ” and “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – WASTEWATER ENTERPRISE CAPITAL PROGRAM.”
Denominations and Interest. The 2026A Bonds will be available in denominations of $5,000 or any integral multiple thereof and will mature in the years and amounts and accrue interest from their date of delivery at the rates set forth on the inside cover page of this Off icial Statement. Interest on the 2026A Bonds is payable semiannually on April 1 and October 1 of each year, commencing on _____ 1, 20__. See “THE 2026A BONDS.” For information on minimum unit sales to purchasers outside the United States, see “INFORMATION CONCERNING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUTSIDE THE UNITED STA TES.”
Book-Entry Only. The 2026A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York, and will be available to ultimate purchasers (the “ Beneficial Owners”) under the book -entry only system maintained by DTC. Beneficial Owners will not receive physical certificates representing their interests in the 2026A Bonds. The principal of, premium, if any, and interest on the 2026A Bonds are payable to DTC by the Trustee, and, so long as DTC is acting as securities depository for the 2026A Bonds, disbursements of such payments to DTC Participants are the responsibility of DTC and disbursements of such payments to the Beneficial Owners are the responsibility of DTC Participants. See “THE 2026A BONDS.” Redemption. The 2026A Bonds are subject to redemption prior to their stated maturities as described herein. See “THE 2026A BONDS – Redemption.”
Security. Under the Indenture, the SFPUC has irrevocably pledged the Net Revenues of the Wastewater Enterprise to the punctual payment of principal of, premium, if any, and interest on the Bonds, which consist of any parity revenue bonds, notes and other obligati ons issued under the Indenture, including the 2026A Bonds, and Parity Loans, subject to the allocation of funds provided in the Indenture. The 2026A Bonds are payable on a parity with certain Outstanding Bonds previously issued by the SFPUC under the Indenture and certain Parity Loans. No Reserve Account will be established for the 2026A Bonds. See “SECURITY FOR THE BONDS.” Limited Obligation. The SFPUC is not obligated to pay the principal of, premium, if any, or interest on the Bonds from any source of funds other than Net Revenues of the Wastewater Enterprise. The SFPUC has no taxing power. The General Fund of the City is not liable for the payment of the principal of, premium, if any, or interest on the Bonds, and neither the credit nor the taxing power of the City is pledged t o the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien, or encumbrance upon, any of the property of the City or of the SFPUC or any of its income or receipts, except N et Revenues of the Wastewater Enterprise. See “SECURITY FOR THE BONDS.”

* Preliminary, subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

The 2026A Bonds are offered when, as and if issued by the SFPUC and received by the Underwriters, subject to the approval of validity by Norton Rose Fulbright US LLP , San Francisco, California, Bond Counsel to the SFPUC, and to certain other conditions. Certain matters will be passed upon for the SFPUC and the City by Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Disclosure Counsel, and by the City Attorney of the City and County of San Francisco. Montague DeRose and Associates, LLC, Walnut Creek, California, and Backstrom McCarley Berry & Co., LLC, San Francisco, California, Co-Municipal Advisors to the SFPUC, assisted in the structuring of this financing. Certain matters will be passed upon for the Underwriters by Hawkins Delafield & Wood LLP, San Francisco, California. It is expected that the 2026A Bonds in fully registered form will be available for delivery in book-entry form through the facilities of DTC on or about August 13, 2026.* Morgan Stanley RBC Capital Markets

Cabrera Capital Markets Wells Fargo Securities

The date of this Official Statement is July __, 2026.

MATURITY SCHEDULE*
Wastewater Revenue Bonds
2026 Series A (Federally Taxable)
$_____ Serial Bonds
Maturity
(October 1) Principal Amount Interest Rate Price†
CUSIP‡
Base Number
79768H
$ % %

* Preliminary, subject to change.
† Reoffering prices have been provided by the Underwriters. See “UNDERWRITING.” ‡ CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Global Services data base. Neither the SFPUC nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

GENERAL INFORMATION
No dealer, broker, salesperson or other person has been authorized by the SFPUC to give any information or to make any representation other than those contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the SFPUC.

This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2026A Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the initial purchasers of the 2026A Bonds. Any statement made in this Official Statement involving any forecast or matter of estimates or opinion, whether or not expressly so stated, is intended solely as such and not as a representation of fact.

No action has been taken by the SFPUC that would permit a public offering of the 2026A Bonds or possession or distribution of this Official Statement or any other offering material in any foreign jurisdiction where action for that purpose is required. Accordingly, each of the Underwriters has agreed that any 2026A Bonds offered or sold outside the United States of America by such Underwriter will be offered and sold in compliance with the applicable laws, rules and regulations of the jurisdiction in which such 2026A Bonds are offered and sold and such Underwriter will obtain any consent, approval or permission required by it for the offer or sale by it of the 2026A Bonds under the laws, rules and regulations in force in any foreign jurisdiction to which it is subject or in which it makes such offers or sales, and the SFPUC shall have no responsibility therefor.

The information set forth herein other than that provided by the SFPUC, although obtained from sources which are believed to be reliable, is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the SFPUC or the City since the date hereof.

The Underwriters have provided the following sentence for inclusion in this Official Statement: The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

The City maintains a website at https://www.sf.gov/ and the SFPUC maintains a website at https://www.sfpuc.gov/. The City and the SFPUC also maintain social media accounts . In addition, certain information and reports found on other websites and other information and reports are referred to in this Official Statement. The information and reports available on such websites, social media accounts and the other referenced information and reports, are not incorporated by reference into this Official Statement and should not be relied upon in making an investment in the 2026A Bonds.

The issuance and sale of the 2026A Bonds have not been registered under the Securities Act of 1933 in reliance upon the exemption provided thereunder by Section 3(a)(2) for the issuance and sale of municipal securities.

This Official Statement is delivered for use in connection with the issuance, sale and delivery of the 2026A Bonds and may not be reproduced or used, in whole or in part, for any other purpose.

FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT REFLECT NOT HISTORICAL FACTS BUT FORECASTS AND “ FO RWARD-LOOKING STATEMENTS.” ALL FORW ARD-

LOOKING STATEMENTS ARE PREDICTIONS AND ARE SUBJECT TO KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT THE FUTURE RESULTS DISCUSSED

HEREIN WILL BE ACHIEVED, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE FORECASTS DESCRIBED HEREIN. IN THIS RESPECT, THE WORDS “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “EXPECT,” “INTEND,” “BELIEVE” AND SIMILAR EXPRESSIONS ARE INTENDED TO

IDENTIFY FORWARD -LOOKING STATEMENTS. ALL PROJECTIONS, FORECASTS, ASSUMPTIONS,

EXPRESSIONS OF OPINIONS, ESTIMATES AND OTHER FORWARD- LOOKING STATEMENTS ARE

EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. GIVEN THEIR UNCERTAINTY , INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH STATEMENTS.

iii

INFORMATION CONCERNING OFFERING RESTRICTIONS IN

CERTAIN JURISDICTIONS OUTSIDE THE UNITED STATES
REFERENCES UNDER THIS HEADING TO THE “ISSUER” MEAN THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND REFERENCES TO “BONDS” OR “SECURITIES” MEAN THE 2026A BONDS OFFERED HEREBY , and references to an “underwriter”, or “underwriters” mean the “underwriter” or “underwriters” referenced elsewhere in this Official Statement . THE SFPUC ASSUMES NO RESPONSIBILITY FOR THIS SECTION.

Minimum Unit Sales

THE BONDS WILL TRADE AND SETTLE ON A UNIT BASIS (ONE UNIT EQUALING ONE BOND OF $5,000 PRINCIPAL AMOUNT). FOR ANY SALES MADE OUTSIDE THE UNITED STATES, THE MINIMUM PURCHASE AND TRADING AMOUNT IS 30 UNITS (BEING 30 BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF $150,000).

NOTICE TO INVESTORS IN CANADA

THE BONDS MAY BE SOLD IN CANADA ONLY TO PURCHASERS PURCHASING, OR DEEMED

TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45 -106 PROSPECTUS EXEMPTIONS OR SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS, AS DEFINED IN NATIONAL INSTRUMENT 31 -103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS. ANY

RESALE OF THE BONDS MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A

TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE SECURITIES LAWS.

SECURITIES LEGISLATION IN CERTAIN PROVINCES OR TERRITORIES OF CANADA MAY

PROVIDE A PURCHASER WITH REMEDIES FOR RESCISSION OR DAMAGES IF THIS OFFERING

CIRCULAR (INCLUDING ANY AMENDMENT THERETO) CONTAINS A MISREPRESENTATION,

PROVIDED THAT THE REMEDIES FOR RESCISSION OR DAMAGES ARE EXERCISED BY THE

PURCHASER WITHIN THE TIME LIMIT PRESCRIBED BY THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY . THE PURCHASER SHOULD REFER TO ANY APPLICABLE PROVISIONS OF THE SECURITIES LEGISLATION OF THE PURCHASER’S PROVINCE OR TERRITORY FOR PARTICULARS OF THESE RIGHTS OR CONSULT WITH A LEGAL ADVISOR.

PURSUANT TO SECTION 3A.3 (OR, IN THE CASE OF SECURITIES ISSUED OR GUARANTEED BY THE GOVERNMENT OF A NON- CANADIAN JURISDICTION, SECTION 3A.4) OF NATIONAL INSTRUMENT 33 -105 UNDERWRITING CONFLICTS (NI 33 -105), THE UNDERWRITERS ARE NOT REQUIRED TO COMPLY WITH THE DISCLOSURE REQUIREMENTS OF NI 33 -105 REGARDING UNDERWRITERS’ CONFLICTS OF INTEREST IN CONNECTION WITH THIS OFFERING.

NOTICE TO PROSPECTIVE INVESTORS IN THE PEOPLE’S REPUBLIC OF CHINA

THE BONDS ARE NOT BEING OFFERED OR SOLD AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY , IN THE PEOPLE’S REPUBLIC OF CHINA (FOR SUCH PURPOSES, NOT INCLUDING HONG KONG, MACAU, OR TAIWAN, THE “PRC”), EXCEPT AS PERMITTED BY THE APPLICABLE LAWS OF THE PRC.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA (“EEA”)

THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE A V AILABLE

TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE A V AILABLE TO ANY EU RETAIL INVESTOR IN THE EUROPEAN ECONOMIC AREA (“EEA”). FOR THESE PURPOSES, AN “EU RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN

POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED, “MIFID II”); (II) A CUSTOMER

WITHIN THE MEANING OF THE INSURANCE DISTRIBUTION DIRECTIVE, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN REGULATION (EU) 2017/1129 (AS AMENDED, THE “EU PROSPECTUS REGULATION”). CONSEQUENTLY , NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO. 1286/2014 (AS AMENDED, THE “EU PRIIPS REGULATION”) FOR OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM

A V AILABLE TO ANY EU RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE

OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM A V AILABLE TO ANY EEA RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

EACH SUBSCRIBER FOR OR PURCHASER OF THE BONDS LOCATED WITHIN THE EEA WILL BE DEEMED TO HA VE REPRESENTED, ACKNOWLEDGED AND AGREED THAT IT IS A “QUALIFIED INVESTOR” AS DEFINED IN THE EU PROSPECTUS REGULATION. THE ISSUER AND EACH

UNDERWRITER AND OTHERS WILL RELY ON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATION, ACKNOWLEDGEMENT AND AGREEMENT.

OTHER EEA OFFERING RESTRICTIONS

THIS OFFICIAL STATEMENT IS NOT A PROSPECTUS FOR THE PURPOSE OF THE EU PROSPECTUS REGULATION. THIS OFFICIAL STATEMENT HAS BEEN PREPARED ON THE BASIS THAT ANY OFFERS OF BONDS IN THE EEA WILL BE MADE ONLY TO AN EU QUALIFIED INVESTORS.

ACCORDINGLY , ANY PERSON MAKING OR INTENDING TO MAKE AN OFFER IN THE EEA OF BONDS

WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED IN THIS OFFICIAL STATEMENT MAY ONLY DO SO TO ONE OR MORE EU QUALIFIED INVESTORS. NONE OF THE ISSUER, THE DEPOSITOR

OR ANY OF THE UNDERWRITERS HAS AUTHORIZED, NOR DO THEY AUTHORIZE, THE MAKING OF ANY OFFER OF BONDS IN THE EEA OTHER THAN TO EU QUALIFIED INVESTORS.

NOTICE TO PROSPECTIVE INVESTORS IN HONG KONG

THE CONTENTS OF THIS OFFICIAL STATEMENT HA VE NOT BEEN APPROVED BY THE

SECURITIES AND FUTURES COMMISSION IN HONG KONG PURSUANT TO THE SECURITIES AND FUTURES ORDINANCE (CAP. 571 OF THE LAWS OF HONG KONG) (“SFO”) OR ANY REGULATORY AUTHORITY IN HONG KONG. ACCORDINGLY , YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFER OF THE BONDS. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFERING CONTEMPLATED IN THIS OFFICIAL STATEMENT . IF YOU ARE IN ANY DOUBT

ABOUT ANY OF THE CONTENTS OF THIS OFFICIAL STATEMENT , YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.

THE BONDS MAY NOT BE OFFERED OR SOLD, AND THE OFFERING CONTEMPLATED IN THIS

OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN

OFFER TO BUY ANY SECURITIES, IN HONG KONG BY MEANS OF ANY DOCUMENT OTHER THAN (I)

IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE AN OFFER OR INVITATION TO THE PUBLIC

WITHIN THE MEANING OF THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE (CAP. 32 OF THE LAWS OF HONG KONG) (“C(WUMP)O”) OR WHICH DO NOT

CONSTITUTE AN INVITATION TO THE PUBLIC WITHIN THE MEANING OF THE SFO, OR (II) TO “PROFESSIONAL INVESTORS” AS DEFINED IN THE SFO AND ANY RULES MADE THEREUNDER, OR (III) IN OTHER CIRCUMSTANCES WHICH DO NOT RESULT IN THE DOCUMENT BEING A “PROSPECTUS” AS DEFINED IN THE C(WUMP)O. NO ADVERTISEMENT, INVITATION OR DOCUMENT

RELATING TO THE BONDS MAY BE ISSUED OR MAY BE IN THE POSSESSION OF ANY PERSON FOR

THE PURPOSE OF ISSUE (IN EACH CASE WHETHER IN HONG KONG OR ELSEWHERE), WHICH IS

DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY , THE

PUBLIC IN HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE LAWS OF HONG KONG)

OTHER THAN WITH RESPECT TO BONDS WHICH ARE OR ARE INTENDED TO BE DISPOSED OF (A) ONLY TO PERSONS OUTSIDE HONG KONG OR (B) ONLY TO “PROFESSIONAL INVESTORS” IN HONG KONG AS DEFINED IN THE SFO AND ANY RULES MADE THEREUNDER.

NOTICE TO PROSPECTIVE INVESTORS IN JAPAN

THE PRIMARY OFFERING OF THE BONDS AND THE SOLICITATION OF AN OFFER FOR

ACQUISITION THEREOF IN JAPAN HA VE NOT BEEN AND WILL NOT BE REGISTERED UNDER PARAGRAPH 1, ARTICLE 4 OF THE FINANCIAL INSTRUMENTS AND EXCHANGE ACT OF JAPAN (NO. 25 OF 1948, AS AMENDED, THE “FIEA”). AS IT IS A PRIMARY OFFERING, IN JAPAN, THE BONDS MAY

ONLY BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY TO,

OR FOR THE BENEFIT OF CERTAIN QUALIFIED INSTITUTIONAL INVESTORS AS DEFINED IN THE FIEA (“QIIS”). A QII WHO PURCHASED OR OTHERWISE OBTAINED THE BONDS CANNOT RESELL OR OTHERWISE TRANSFER THE BONDS IN JAPAN TO ANY PERSON EXCEPT ANOTHER QII.

OTHER THAN THE PRIMARY OFFERING OF THE BONDS AND THE SOLICITATION OF AN

OFFER FOR ACQUISITION THEREOF ABOVE OR PURSUANT TO OTHER EXEMPTIONS FROM THE

REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEA AND ANY

OTHER APPLICABLE LAWS, REGULATIONS AND MINISTERIAL GUIDELINES OF JAPAN, NEITHER

THE BONDS NOR ANY INTEREST THEREIN MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY ,

IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN, OR TO, OR FOR THE BENEFIT OF, ANY “RESIDENT” OF JAPAN (AS DEFINED UNDER ITEM 5, PARAGRAPH 1, ARTICLE 6 OF THE FOREIGN EXCHANGE AND FOREIGN TRADE ACT (ACT NO. 228 OF 1949, AS AMENDED)) OR TO

OTHERS FOR RE -OFFERING OR RESALE, DIRECTLY OR INDIRECTLY , IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN.

NOTICE TO PROSPECTIVE INVESTORS IN KOREA

THIS OFFICIAL STATEMENT IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE

CONSIDERED AS, A PUBLIC OFFERING OF SECURITIES IN KOREA FOR THE PURPOSES OF THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKET ACT OF KOREA. THE BONDS HA VE

NOT BEEN AND WILL NOT BE REGISTERED WITH THE FINANCIAL SERVICES COMMISSION OF

SOUTH KOREA FOR PUBLIC OFFERING IN SOUTH KOREA UNDER THE FINANCIAL INVESTMENT

SERVICES AND CAPITAL MARKETS ACT AND ITS SUBORDINATE DECREES AND REGULATIONS (COLLECTIVELY , THE “FSCMA”). THE BONDS MAY NOT BE OFFERED, SOLD OR DELIVERED,

DIRECTLY OR INDIRECTLY , OR OFFERED OR SOLD TO ANY PERSON FOR RE-OFFERING OR RESALE,

DIRECTLY OR INDIRECTLY , IN SOUTH KOREA OR TO ANY RESIDENT OF SOUTH KOREA EXCEPT AS

OTHERWISE PERMITTED UNDER THE APPLICABLE LAWS AND REGULATIONS OF SOUTH KOREA,

INCLUDING THE FSCMA AND THE FOREIGN EXCHANGE TRANSACTION LAW AND ITS SUBORDINATE DECREES AND REGULATIONS (COLLECTIVELY , THE “FETL”). WITHOUT PREJUDICE

TO THE FOREGOING, THE NUMBER OF INVESTORS (AS CALCULATED PURSUANT TO THE FSCMA)

TO WHICH BONDS HA VE BEEN OFFERED IN SOUTH KOREA OR THE NUMBER OF INVESTORS WHO

ARE RESIDENTS IN SOUTH KOREA SHALL BE LESS THAN FIFTY AND NO UNIT OF BONDS MAY BE

DIVIDED RESULTING IN MORE THAN FORTY -NINE INVESTORS (AS CALCULATED PURSUANT TO THE FSCMA). FURTHERMORE, THE BONDS MAY NOT BE RESOLD TO SOUTH KOREAN RESIDENTS

UNLESS THE PURCHASER OF THE BONDS COMPLIES WITH ALL APPLICABLE REGULATORY

REQUIREMENTS (INCLUDING BUT NOT LIMITED TO GOVERNMENT REPORTING REQUIREMENTS UNDER THE FETL) IN CONNECTION WITH THE PURCHASE OF THE BONDS.

NOTICE TO INVESTORS IN SINGAPORE

NEITHER THIS OFFICIAL STATEMENT NOR ANY OTHER DOCUMENT OR MATERIAL IN

CONNECTION WITH ANY OFFER OF THE BONDS HAS BEEN OR WILL BE LODGED OR REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE (“MAS”) UNDER THE SECURITIES AND FUTURES ACT 2001 OF SINGAPORE (“SFA”). ACCORDINGLY , MAS ASSUMES NO RESPONSIBILITY FOR THE CONTENTS OF THIS OFFICIAL STATEMENT . THIS OFFICIAL STATEMENT

IS NOT A PROSPECTUS AS DEFINED IN THE SFA AND STATUTORY LIABILITY UNDER THE SFA IN RELATION TO THE CONTENTS OF PROSPECTUSES WOULD NOT APPLY . PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY WHETHER THE INVESTMENT IS SUITABLE FOR IT.

THIS OFFICIAL STATEMENT AND ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION

WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF THE BONDS

MAY NOT BE DIRECTLY OR INDIRECTLY ISSUED, CIRCULATED OR DISTRIBUTED, NOR MAY THE

BONDS BE OFFERED OR SOLD, OR BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION

OR PURCHASE, WHETHER DIRECTLY OR INDIRECTLY , TO PERSONS IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR (AS DEFINED IN SECTION 4A(1)(C) OF THE SFA) (“INSTITUTIONAL INVESTOR”) PURSUANT TO SECTION 274 OF THE SFA; (II) TO AN ACCREDITED INVESTOR (AS DEFINED IN SECTION 4A(1)(A) OF THE SFA) (“ACCREDITED INVESTOR”) PURSUANT TO SECTION 275(1) OF THE SFA, AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA; OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA.

UNLESS SUCH BONDS ARE OF THE SAME CLASS AS OTHER BONDS OF THE ISSUER THAT ARE LISTED FOR QUOTATION ON AN APPROVED EXCHANGE (AS DEFINED IN SECTION 2(1) OF THE SFA) (“APPROVED EXCHANGE”) AND IN RESPECT OF WHICH ANY OFFER INFORMATION STATEMENT, INTRODUCTORY DOCUMENT, SHAREHOLDERS’ CIRCULAR FOR A REVERSE TAKE -

OVER, DOCUMENT ISSUED FOR THE PURPOSES OF A SCHEME OF ARRANGEMENT, PROSPECTUS,

OR ANY OTHER SIMILAR DOCUMENT APPROVED BY AN APPROVED EXCHANGE, WAS ISSUED IN

CONNECTION WITH AN OFFER, OR THE LISTING FOR QUOTATION, OF THOSE BONDS, ANY

SUBSEQUENT OFFERS IN SINGAPORE OF BONDS INITIALLY ACQUIRED PURSUANT TO AN OFFER MADE IN RELIANCE ON AN EXEMPTION UNDER SECTION 274 OF THE SFA OR SECTION 275(1) OF THE SFA MAY ONLY BE MADE, PURSUANT TO THE REQUIREMENTS OF SECTION 276 OF THE SFA, WITHIN THE PERIOD OF 6 MONTHS FROM THE DATE OF INITIAL ACQUISITION, TO PERSONS WHO ARE INSTITUTIONAL INVESTORS OR ACCREDITED INVESTORS. ANY TRANSFER AFTER SUCH INITIAL 6 MONTH PERIOD IN SINGAPORE SHALL BE MADE IN RELIANCE ON AN APPLICABLE EXEMPTION UNDER SUBDIVISION (4) OF DIVISION 1 OF PART 13 OF THE SFA (OTHER THAN SECTION 280 OF THE SFA).

IN ADDITION TO THE ABOVE, WHERE THE BONDS ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275(1) OF THE SFA BY A RELEV ANT PERSON (AS DEFINED IN SECTION 275(2) OF THE SFA) WHICH IS:
(1) A CORPORATION (OTHER THAN A CORPORATION THAT IS AN ACCREDITED

INVESTOR), THE SOLE BUSINESS OF WHICH IS TO HOLD INVESTMENTS AND THE

ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR
(2) A TRUST (OTHER THAN A TRUST THE TRUSTEE OF WHICH IS AN ACCREDITED

INVESTOR) WHOSE SOLE PURPOSE IS TO HOLD INVESTMENTS AND EACH

BENEFICIARY OF THE TRUST IS AN INDIVIDUAL WHO IS AN ACCREDITED

INVESTOR,
SECURITIES (AS DEFINED IN SECTION 2(1) OF THE SFA) OR SECURITIES -BASED DERIV ATIVES CONTRACTS (AS DEFINED IN SECTION 2(1) OF THE SFA) OF THAT CORPORATION OR THE BENEFICIARIES’ RIGHTS AND INTEREST (HOWSOEVER DESCRIBED) IN THAT TRUST SHALL NOT BE TRANSFERRED WITHIN 6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE BONDS PURSUANT TO AN OFFER MADE UNDER SECTION 275(1) OF THE SFA EXCEPT:
(a) TO INSTITUTIONAL INVESTORS;
(b) TO RELEV ANT PERSONS (AS DEFINED IN SECTION 275(2) OF THE SFA); (c) WHERE SUCH TRANSFER ARISES FROM AN OFFER MADE ON TERMS THAT SUCH

SECURITIES OR SECURITIES -BASED DERIV ATIVES CONTRACTS OF THAT CORPORATION OR SUCH BENEFICIARIES’ RIGHTS AND INTEREST IN THAT TRUST,

vii

THE SUBJECT OF TRANSFER, ARE ACQUIRED AT A CONSIDERATION OF NOT LESS THAN S$200,000 (OR ITS EQUIV ALENT IN A FOREIGN CURRENCY) FOR EACH

TRANSACTION, PROVIDED THAT THE PERSON ACQUIRING SECURITIES OR

SECURITIES-BASED DERIV ATIVES CONTRACTS OF SUCH CORPORATION MUST ACT AS PRINCIPAL;
(d) WHERE NO CONSIDERATION IS OR WILL BE GIVEN FOR THE TRANSFER; (e) WHERE THE TRANSFER IS BY OPERATION OF LAW; OR
(f) WHERE SUCH BONDS ARE OF THE SAME CLASS AS OTHER BONDS OF THE ISSUER

THAT ARE LISTED FOR QUOTATION ON AN APPROVED EXCHANGE AND IN RESPECT

OF WHICH ANY OFFER INFORMATION STATEMENT, INTRODUCTORY DOCUMENT, SHAREHOLDERS’ CIRCULAR FOR A REVERSE TAKE-OVER, DOCUMENT ISSUED FOR

THE PURPOSES OF A SCHEME OF ARRANGEMENT, PROSPECTUS, OR ANY OTHER

SIMILAR DOCUMENT APPROVED BY AN APPROVED EXCHANGE, WAS ISSUED IN

CONNECTION WITH AN OFFER, OR THE LISTING FOR QUOTATION, OF THOSE BONDS.

AS THE BONDS ARE ONLY OFFERED TO PERSONS IN SINGAPORE WHO QUALIFY AS AN ACCREDITED INVESTOR, AN EXPERT INVESTOR (AS DEFINED IN SECTION 4A(1)(B) OF THE SFA), AN

INSTITUTIONAL INVESTOR AND/OR ANY OTHER PERSON THAT IS NOT AN INDIVIDUAL, THE

ISSUER IS NOT REQUIRED TO DETERMINE THE CLASSIFICATION OF THE BONDS PURSUANT TO SECTION 309B OF THE SFA.

NOTHING SET OUT IN THIS NOTICE SHALL BE CONSTRUED AS LEGAL ADVICE AND EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN LEGAL COUNSEL. THIS NOTICE IS FURTHER

SUBJECT TO THE PROVISIONS OF THE SFA AND ITS REGULATIONS, AS THE SAME MAY BE

AMENDED OR CONSOLIDATED FROM TIME TO TIME AND DOES NOT PURPORT TO BE EXHAUSTIVE IN ANY RESPECT.

NOTICE TO INVESTORS IN SWITZERLAND

THE BONDS MAY NOT BE PUBLICLY OFFERED IN SWITZERLAND AND WILL NOT BE LISTED ON THE SIX SWISS EXCHANGE (“SIX”) OR ON ANY OTHER STOCK EXCHANGE OR REGULATED TRADING FACILITY IN SWITZERLAND. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE A

PROSPECTUS OR A KEY INFORMATION DOCUMENT WITHIN THE MEANING OF THE SWISS FEDERAL ACT ON FINANCIAL SERVICES (“FINSA”) OR A LISTING PROSPECTUS WITHIN THE MEANING OF THE

SIX LISTING RULES OR THE LISTING RULES OF ANY OTHER STOCK EXCHANGE OR REGULATED TRADING FACILITY IN SWITZERLAND. NEITHER THIS OFFICIAL STATEMENT NOR ANY OTHER

OFFERING OR MARKETING MATERIAL RELATING TO THE BONDS OR THE OFFERING MAY BE PUBLICLY OFFERED OR OTHERWISE MADE PUBLICLY A V AILABLE IN SWITZERLAND.

ACCORDINGLY , THIS OFFICIAL STATEMENT MAY BE COMMUNICATED IN OR FROM SWITZERLAND TO A LIMITED NUMBER OF SELECTED INVESTORS ONLY .

NONE OF THIS OFFICIAL STATEMENT OR ANY OTHER OFFERING OR MARKETING

MATERIAL RELATING TO THE OFFERING, THE ISSUER OR THE BONDS HA VE BEEN OR WILL BE FILED WITH OR APPROVED BY ANY SWISS REGULATORY AUTHORITY . IN PARTICULAR, THIS

OFFICIAL STATEMENT WILL NOT BE FILED WITH, AND THE BONDS WILL NOT BE SUPERVISED BY , THE SWISS FINANCIAL MARKET SUPERVISORY AUTHORITY (“FINMA”).

THE BONDS DO NOT CONSTITUTE COLLECTIVE INVESTMENTS SCHEMES WITHIN THE MEANING OF THE SWISS FEDERAL ACT ON COLLECTIVE INVESTMENT SCHEMES ("CISA").

ACCORDINGLY , INVESTORS ARE EXPOSED TO THE DEFAULT RISK OF THE ISSUER AND DO NOT HA VE THE BENEFIT OF THE SPECIFIC INVESTOR PROTECTION PROVIDED UNDER THE CISA.

viii

NOTICE TO PROSPECTIVE INVESTORS IN TAIWAN (THE REPUBLIC OF CHINA)

THE OFFER OF THE BONDS HAS NOT BEEN AND WILL NOT BE REGISTERED OR FILED WITH

OR APPROVED BY THE FINANCIAL SUPERVISORY COMMISSION OF TAIWAN, THE REPUBLIC OF CHINA ("TAIWAN") (THE "FSC") PURSUANT TO APPLICABLE SECURITIES LAWS AND REGULATIONS

OF TAIWAN AND THE BONDS, INCLUDING ANY COPY OF THIS OFFICIAL STATEMENT OR ANY

OTHER DOCUMENTS RELATING TO THE BONDS, MAY NOT BE OFFERED, SOLD, DELIVERED OR

DISTRIBUTED WITHIN TAIWAN THROUGH A PUBLIC OFFERING OR IN CIRCUMSTANCES WHICH

CONSTITUTE AN OFFER WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE ACT OF TAIWAN THAT REQUIRES THE REGISTRATION WITH OR APPROV AL OF THE FSC. NO PERSON OR

ENTITY IN TAIWAN HAS BEEN AUTHORIZED TO OFFER, SELL, DISTRIBUTE, GIVE ADVICE

REGARDING OR OTHERWISE INTERMEDIATE THE OFFERING, SALE OR DISTRIBUTION OF THE

BONDS UNLESS THE BONDS OFFERED OR SOLD TO INVESTORS IN TAIWAN ARE OTHERWISE

THROUGH TAIWAN LICENSED FINANCIAL INSTITUTIONS TO THE EXTENT PERMITTED UNDER RELEV ANT TAIWAN LAWS OR REGULATIONS. TAIWAN INVESTORS WHO SUBSCRIBE AND

PURCHASE THE BONDS SHALL COMPLY WITH ALL RELEV ANT SECURITIES, TAX AND FOREIGN EXCHANGE LAWS AND REGULATIONS IN EFFECT IN TAIWAN.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND (“UK”)

THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE A V AILABLE

TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE A V AILABLE TO ANY UK RETAIL INVESTOR IN THE UK. FOR THESE PURPOSES A “UK RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (8) OF ARTICLE 2 OF REGULATION (EU) 2017/565 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED, THE “EUWA”); OR (II) A CUSTOMER WITHIN THE MEANING OF PROVISIONS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED, THE “FSMA”) AND ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU) 2016/97 (AS AMENDED, THE “INSURANCE DISTRIBUTION DIRECTIVE”), WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUWA; OR (III) NOT A “QUALIFIED INVESTOR” AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUWA, AS AMENDED (THE “UK PROSPECTUS REGULATION”). CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUWA (AS AMENDED, THE “UK PRIIPS REGULATION”) FOR

OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM A V AILABLE TO UK RETAIL

INVESTORS IN THE UK HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS

OR OTHERWISE MAKING THEM A V AILABLE TO ANY UK RETAIL INVESTOR IN THE UK MAY BE UNLAWFUL UNDER THE UK PRIIPS REGULATION.

EACH SUBSCRIBER FOR OR PURCHASER OF THE BONDS LOCATED WITHIN THE UK WILL BE DEEMED TO HA VE REPRESENTED, ACKNOWLEDGED AND AGREED THAT IT IS A “QUALIFIED INVESTOR” AS DEFINED IN THE UK PROSPECTUS REGULATION. THE ISSUER AND EACH

UNDERWRITER AND OTHERS WILL RELY ON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATION, ACKNOWLEDGEMENT AND AGREEMENT.

UK RESTRICTIONS ON SALES - THIS OFFICIAL STATEMENT HAS NOT BEEN APPROVED FOR THE PURPOSES OF SECTION 21 OF THE FSMA BY AN AUTHORIZED PERSON UNDER FSMA. THE

BONDS MUST NOT BE OFFERED OR SOLD AND THIS OFFICIAL STATEMENT AND ANY OTHER

DOCUMENT IN CONNECTION WITH THE OFFERING AND ISSUANCE OF THE BONDS MUST NOT BE

COMMUNICATED OR CAUSED TO BE COMMUNICATED IN THE UK EXCEPT TO PERSONS

AUTHORIZED TO CARRY ON A REGULATED ACTIVITY UNDER THE FSMA OR TO PERSONS (A) WHO

HA VE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND QUALIFY AS INVESTMENT PROFESSIONALS UNDER ARTICLE 19 (INVESTMENT PROFESSIONALS) OF THE

FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, (AS AMENDED, THE “ORDER”), (B) WHO ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A)- (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER OR (C) WHO OTHERWISE FALL WITHIN AN EXEMPTION SET FORTH IN SUCH ORDER SUCH THAT SECTION 21(1)

OF THE FSMA DOES NOT APPLY TO THE ISSUER OR ARE PERSONS TO WHOM THIS OFFICIAL

STATEMENT OR ANY OTHER SUCH DOCUMENT MAY OTHERWISE LAWFULLY BE COMMUNICATED

OR CAUSED TO BE COMMUNICATED (ALL SUCH PERSONS IN (A), (B) AND (C) TOGETHER BEING REFERRED TO AS “RELEV ANT PERSONS”). IN THE UK, ANY INVESTMENT OR INVESTMENT

ACTIVITY TO WHICH THIS OFFICIAL STATEMENT RELATES IS A V AILABLE ONLY TO RELEV ANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEV ANT PERSONS.

NEITHER THIS OFFICIAL STATEMENT NOR THE BONDS ARE OR WILL BE A V AILABLE TO

PERSONS WHO ARE NOT RELEV ANT PERSONS AND THIS OFFICIAL STATEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEV ANT PERSONS. THE

COMMUNICATION OF THIS OFFICIAL STATEMENT TO ANY PERSON IN THE UK WHO IS NOT A RELEV ANT PERSON IS UNAUTHORIZED AND MAY CONTRA VENE THE FSMA.

ADDITIONAL NOTICE TO PROSPECTIVE INVESTORS

THIS OFFICIAL STATEMENT DOES NOT COMPRISE A PROSPECTUS WITH REGARD TO THE

ISSUER OR THE BONDS FOR THE PURPOSES OF THE EU PROSPECTUS REGULATION IN RESPECT OF THE EUROPEAN ECONOMIC AREA (“EEA”) OR UNDER THE UK PROSPECTUS REGULATION IN RESPECT OF THE UK. ACCORDINGLY , ANY PERSON MAKING OR INTENDING TO MAKE ANY OFFER

IN THE EEA OR THE UK OF THE BONDS SHOULD ONLY DO SO IN CIRCUMSTANCES IN WHICH NO

OBLIGATION ARISES FOR THE ISSUER OR ANY OF THE UNDERWRITERS TO PROVIDE A PROSPECTUS FOR SUCH OFFER. NEITHER THE ISSUER NOR THE UNDERWRITERS HA VE

AUTHORIZED, NOR DO THEY AUTHORIZE, THE MAKING OF ANY OFFER OF BONDS THROUGH ANY

FINANCIAL INTERMEDIARY , OTHER THAN OFFERS MADE BY THE UNDERWRITERS, WHICH

CONSTITUTE THE FINAL PLACEMENT OF THE BONDS CONTEMPLATED IN THIS OFFICIAL STATEMENT.

SAN FRANCISCO PUBLIC UTILITIES COMMISSION
Joshua Arce, President
Stephen E. Leveroni, Vice President
Avni Jamdar, Commissioner
Kate H. Stacy, Commissioner
Meghan Thurlow, Commissioner

PUBLIC UTILITIES COMMISSION OFFICIALS
Dennis J. Herrera, General Manager*
Ronald P. Flynn, Deputy General Manager and Chief Operating Officer Nancy L. Hom, Assistant General Manager, Business Services and Chief Financial Officer Joel Prather, Assistant General Manager, Wastewater Enterprise Jennifer S. Hopkins, Assistant General Manager, Professional Services Division and Chief Administrative Officer Steven R. Ritchie, Assistant General Manager, Water Enterprise Stephen D. Robinson, Assistant General Manager, Infrastructure Division

CITY AND COUNTY OF SAN FRANCISCO
MAYOR
Daniel Lurie

BOARD OF SUPERVISORS
Rafael Mandelman, District 8, President
Connie Chan, District 1 Bilal Mahmood, District 5
Chyanne Chen, District 11 Myrna Melgar, District 7
Matt Dorsey, District 6 Danny Sauter, District 3
Alan Wong, District 4 Shamann Walton, District 10
Jackie Fielder, District 9 Stephen Sherrill, District 2

CITY ATTORNEY
David Chiu

CITY TREASURER
José Cisneros

OTHER CITY AND COUNTY OFFICIALS
Greg Wagner, Controller
Carmen Chu, City Administrator

SPECIAL SERVICES

Bond Counsel
Norton Rose Fulbright US LLP
San Francisco, California
Co-Municipal Advisors
Montague DeRose and Associates, LLC
Walnut Creek, California
Disclosure Counsel
Orrick, Herrington & Sutcliffe LLP
San Francisco, California
Backstrom McCarley Berry & Co., LLC
San Francisco, California

Trustee
U.S. Bank Trust Company, National Association
San Francisco, California

* Dennis J. Herrera has announced he plans to retire before the end of 2026.

TABLE OF CONTENTS
Page Page
xi
INTRODUCTION .............................................................. 1 General ........................................................................... 1 Authority for Issuance .................................................... 1 Purpose .......................................................................... 1 The SFPUC and the Wastewater Enterprise ................... 2 Security for the 2026A Bonds ........................................ 2 Sources of Repayment for the 2026A Bonds ................. 3 No Reserve Account for 2026A Bonds .......................... 3 Parity Bonds and Other Indebtedness ............................ 3 Risk Factors ................................................................... 4 Continuing Disclosure .................................................... 4 Concurrent Financing ..................................................... 4 Other Matters ................................................................. 4

THE PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
AND THE WASTEW ATER ENTERPRISE ............ 5
PLAN OF FINANCE.......................................................... 5 General ........................................................................... 5 ESTIMATED SOURCES AND USES OF FUNDS ........... 5
THE 2026A BONDS .......................................................... 6 General ........................................................................... 6 Securities Depository and Book-Entry System .............. 6 Redemption .................................................................... 6 Defeasance ..................................................................... 8 SECURITY FOR THE BONDS ......................................... 8 Pledge of Net Revenues ................................................. 8 Flow of Funds .............................................................. 10 Rate Covenants ............................................................ 10 No Reserve Account for 2026A Bonds ........................ 12 Additional Series of Bonds .......................................... 13 Additional Parity Loans ............................................... 14 Refunding Bonds ......................................................... 15 Subordinate Obligations; Obligations Not Payable
from Revenues ........................................................ 15 Investments .................................................................. 16 DEBT SERVICE REQUIREMENTS ............................... 16 RISK FACTORS .............................................................. 18 Access to Capital Markets ........................................... 29 CERTAIN LEGAL MATTERS ........................................ 29 TAX MATTERS ............................................................... 29 LITIGATION ................................................................... 33 RATINGS ......................................................................... 33 UNDERWRITING ........................................................... 33 FINANCIAL STATEMENTS .......................................... 34 CONTINUING DISCLOSURE ....................................... 34 CO-MUNICIPAL ADVISORS ......................................... 35 INDEPENDENT PRICING CONSULTANT ................... 35
MISCELLANEOUS......................................................... 35 APPROV AL AND EXECUTION .................................... 37

APPENDIX A THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY

OF SAN FRANCISCO AND THE
WASTEWATER ENTERPRISE ........................ A-38

APPENDIX B SFPUC WASTEWATER ENTERPRISE
FINANCIAL STATEMENTS ............................. B-1

APPENDIX C SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE ............... C-1

APPENDIX D PROPOSED FORM OF OPINION OF
BOND COUNSEL .............................................. D-1

APPENDIX E FORM OF CONTINUING
DISCLOSURE CERTIFICATE ........................... E-1

APPENDIX F SECURITIES DEPOSITORY AND
THE BOOK-ENTRY SYSTEM ........................... F-1

1 OFFICIAL STATEMENT
$__________*
Public Utilities Commission of the
City and County of San Francisco
Wastewater Revenue Bonds, 2026 Series A
(Federally Taxable)

INTRODUCTION
This Introduction is qualified in its entirety by reference to the more detailed information included and referred to elsewhere in this Official Statement. The offering of the hereinafter defined 2026A Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used in this Introduction and not otherwise defined have the respective meanings assigned to them elsewhere in this Official Statement, including “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” General
This Official Statement, including the cover page s and Appendices hereto, is provided to furnish certain information in connection with the offering by the Public Utilities Commission of the City and County of San Francisco (the “SFPUC”) of its Wastewater Revenue Bonds, 2026 Series A (Federally Taxable) (the “2026A Bonds”). All bonds, notes and other obligations of the SFPUC issued and outstanding at any given time under the Indenture (as defined herein), including the 2026A Bonds and the Parity Loans (as defined herein) as the context requires, are referred to collectively in this Official Statement as the “Bonds.” Authority for Issuance
The SFPUC is issuing the 2026A Bonds pursuant to authority granted by the Charter (the “ Charter”) of the City and County of San Francisco (the “ City”), under Proposition E, approved by San Francisco voters on November 5, 2002 (“Proposition E”).

The 2026A Bonds will be issued under a Nineteenth Supplemental Indenture, dated as of August 1, 2026 (the “Nineteenth Supplemental Indenture”), by and between the SFPUC and U.S. Bank Trust Company, National Association, as successor to U.S. Bank National Association, as trustee (the “ Trustee”). The Nineteenth Supplemental Indenture supplements the Indenture, dated as of January 1, 2003 (the “ Original Indenture” and, as amended and supplemented, including as supplemented by the Nineteenth Supplemental Indenture, the “Indenture”), by and between the SFPUC and the Trustee.

The 2026A Bonds are being issued pursuant to Ordinance No. 181-23, adopted by the Board of Supervisors of the City (the “Board of Supervisors ”) on July 25, 2023 and Ordinance No. 125-24, adopted by the Board of Supervisors on June 21, 2024 , and under a resolution adopted by the SFPUC governing body (the “ Commission”) on July 28, 2026.

See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Authority for Issuance of Revenue Bonds and Other Obligations Payable from Net Revenues. ” Purpose
The 2026A Bonds are being issued to (a) finance, on an interim basis, certain capital projects benefitting the Wastewater Enterprise, including the Biosolids Digester Facilities Project (as defined in Appendix A hereto) ; (b) retire Commercial Paper Notes (as defined in Appendix A hereto) issued to finance , on an interim basis, certain

* Preliminary, subject to change.

2 capital projects benefitting the Wastewater Enterprise , including the Biosolids Digester Facilities Projec t; and (c) pay the costs of issuance of the 202 6A Bonds. See “PLAN OF FINANCE,” “ESTIMATED SOURCES AND USES OF FUNDS” and “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – WASTEWATER ENTERPRISE CAPITAL PROGRAM.”
The SFPUC and the Wastewater Enterprise
The SFPUC is a department of the City responsible for the maintenance, operation and development of three utility enterprises. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE PUBLIC UTILITIES COMMISSION.”
The Wastewater Enterprise provides sewage and stormwater collection, treatment and disposal services to residential, commercial and industrial customers in San Francisco, as well as three municipal sewer service providers that serve residents and businesses in northern San Mateo County. The Wastewater Enterprise’s services are provided through (i) a combined sewer system that collects sewage and stormwater, (ii) two all- weather treatment plants and one wet -weather treatment facility and (iii) effluent outfalls to the San Francisco Bay and Pacific Ocean. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE.” The SFPUC’s Water Enterprise (as defined in Appendix A hereto) delivers retail water services to San Francisco and wholesale water to users in three other Bay Area counties, and the SFPUC ’s Power Enterprise (as defined in Appendix A hereto) delivers power, mainly hydroelectric, for City government operations and to other users. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE PUBLIC UTILITIES COMMISSION. ” The revenues of the Water Enterprise and the Power Enterprise are not available for, and do not secure, payment of the principal of, premium, if any, or interest on the Bonds, including the 2026A Bonds.

Security for the 2026A Bonds
Under the Indenture, the SFPUC has irrevocably pledged the Net Revenues (as defined herein) of the Wastewater Enterprise to the punctual payment of principal of, premium, if any, and interest on the Bonds, which consist of any parity revenue bonds, notes and obligations issued under the Indenture, including the 202 6A Bonds, and Parity Loans, subject to the flow of funds contained in the Indenture. The 2026A Bonds and all other Bonds are secured by a parity lien on Net Revenues. Under the Indenture, Parity Loans are treated as “ Bonds” for certain purposes and are therefore secured by a pledge of Net Revenues on a parity with the 2026 A Bonds. See “SECURITY FOR THE BONDS ” and “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
The Indenture defines “Net Revenues” as all “Revenues” less all “Operation and Maintenance Costs of the Enterprise” (each as defined herein). Revenues are generated principally from the sewer service charges to customers for the sanitary wastewater and stormwater collection, treatment and disposal services of the Wastewater Enterprise. Wastewater rates are set by the SFPUC, subject to rejection by resolution of the Board of Supervisors.

See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Wastewater Enterprise Rate Setting” and “– Wastewater Enterprise Rates and Charges.” The SFPUC is not obligated to pay the principal of, premium, if any, or interest on the Bonds from any source of funds other than Net Revenues of the Wastewater Enterprise. The SFPUC has no taxing power.

The General Fund of the City is not liable for the payment of the principal of, premium, if any, or interest on the Bonds, and neither the credit nor the taxing power of the City is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or of the SFPUC or any of its income or receipts, except Net Revenues of the Wastewater Enterprise. See “SECURITY FOR THE BONDS.”

3 Sources of Repayment for the 2026A Bonds
Although the 2026A Bonds are secured by a pledge of Net Revenues of the Wastewater Enterprise, the SFPUC does not expect that Net Revenues will be sufficient to pay the principal of the 2026A Bonds at maturity. As such, the SFPUC intends to pay the principal of the 2026 A Bonds from the proceeds of additional notes, revenue bonds or other revenue secured obligations (referred to herein as the “ Take-Out Obligations”) to be issued by the SFPUC on or prior to the maturity of the 2026A Bonds. If the SFPUC is unable to issue Take -Out Obligations, no assurance can be given that the SFPUC will have sufficient funds on hand to pay the principal of the 2026A Bonds on their maturity date. See “PLAN OF FINANCE” and “RISK FACTORS – Access to Capital Markets.” No Reserve Account for 2026A Bonds
No Reserve Account will be established for the 2026A Bonds.

Parity Bonds and Other Indebtedness
Parity Bonds. The SFPUC has 19 series of outstanding parity revenue bonds, issued under the Indenture, in the aggregate principal amount of approximately $4.728 billion as of July 1, 2026. See “APPENDIX A – THE

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Outstanding Parity Revenue Bonds.”
The Indenture permits, upon the satisfaction of certain conditions, the issuance of additional bonds secured by a pledge of Net Revenues (the “ Additional Bonds”) on a parity with the Outstanding Bonds and the 202 6A Bonds. See “SECURITY FOR THE BONDS – Additional Series of Bonds.” Parity Loans. Under the Indenture, the SFPUC may enter into loan agreements with the State of California (the “State”) and any board, department or agency thereof, or the federal government and any board, department and agency thereof, to finance certain categories of projects relating to the facilities of the Wastewater Enterprise.

These loans (referred to herein as the “ Parity Loans”) are payable from Net Revenues on a parity with the Bonds.

In accordance with the Fifth Supplemental Indenture, dated as of September 14, 2017, Parity Loans are treated as “Bonds” for certain purposes under the Indenture. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
As of the date of this Official Statement, the SFPUC has entered into nine State Revolving Fund ( “SRF”) loans with the State for the Wastewater Enterprise. These SRF loans constitute “Parity Loans” under the Indenture.

The maximum aggregate amount that may be disbursed under such existing SRF loans is approximately $ 570.5 million. The SFPUC plans to apply for additional SRF loans for the Wastewater Enterprise over the next several years. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” WIFIA Bonds. The SFPUC has issued three parity Bonds under the Indenture to evidence its repayment obligation to the United States Environmental Protection Agency (the “ USEPA”), acting by and through the Administrator of the US EPA (the “WIFIA Lender”), under the WIFIA Loan Agreements (as defined and further described in Appendix A hereto). The WIFIA Lender has agreed to make (i) the BDFP WIFIA Loan (as defined and further described in Appendix A hereto) to the SFPUC in an amount not to exceed $699,242,023 t o finance eligible costs of the Biosolids Digester Facilities Project plus certain eligible expenses, (ii) the STPI WIFIA Loan (as defined and further described in Appendix A hereto) to the SFPUC in an amount not to exceed $513,861,981 to finance eligible costs of the Southeast Treatment Plant Improvements Project (as defined in Appendix A hereto) plus certain eligible expenses , and (iii) up to five loans to the SFPUC in an aggregate amount not to exceed $791,337,456 to finance certain Wastewater Enterprise capital improvement projects, including the Project 1 WIFIA Loan (as defined and further described in Appendix A hereto ), in an amount not to exceed $369,335,021. The WIFIA Bonds (as defined and further described in Appendix A hereto) are payable from and secured by a pledge of Net Revenues on a parity with the Bonds. As of the date of this Official Statement, the SFPUC has made three draws on the BDFP

4 WIFIA Loan and the principal amount of the BDFP WIFIA Bond (as defined in Appendix A hereto ) is approximately $699,242,023, two draws on the STPI WIFIA Loan and the principal amount of the S TPI WIFIA Bond (as defined in Appendix A hereto) is approximately $513,861,981, and one draw on the Project 1 WIFIA Loan and the principal amount of the Project 1 WIFIA Bond (as defined in Appendix A hereto) is approximately $157,642,619. The BDFP WIFIA Loan and the STPI WIFIA Loan are fully drawn. The Project 1 WIFIA Loan Agreement provides that the full principal amount must be disbursed no later than one year following the substantial completion date for the Project 1 Projects (April 22, 2030). See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Water Infrastructure Finance and Innovation Act Loans – WIFIA Bonds” and “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Risk Factors
Investment in the 202 6A Bonds is subject to certain risks that should be considered, in addition to other matters set forth in this Official Statement, in evaluating an investment in the 202 6A Bonds. For a general overview of certain risk factors, see “RISK FACTORS.”
Continuing Disclosure
The SFPUC will covenant for the benefit of the Owners and Beneficial Owners of the 2026A Bonds to provide certain financial information and operating data regarding the Wastewater Enterprise not later than March 31 following the end of its Fiscal Year (presently June 30), beginning on March 31, 2027 , with respect to the report for Fiscal Year 2025-26, and to provide notices of the occurrence of certain enumerated events. These covenants will be made to assist the Underwriters in complying with Rule 15c2 -12(b)(5) of the Securities and Exchange Commission (the “Rule”). See “CONTINUING DISCLOSURE ” and “APPENDIX E – FORM OF CONTINUING DISCLOSURE CERTIFICATE.”
Concurrent Financing
Concurrently with the issuance of the 2026A Bonds, the SFPUC intends to issue its Wastewater Revenue Bonds, 2026 Series B (Refunding) (the “ 2026B Bonds”) in the aggregate principal amount of $________ * to (i)
refund a portion of certain of the SFPUC’s outstanding Bonds ; and (ii) pay the costs of issuing the 2026B Bonds.

The sale of the 2026A Bonds is not contingent on the sale or delivery of the 2026B Bonds, and the SFPUC may or may not proceed with the issuance of its 2026B Bonds depending on market conditions . The 2026B Bonds are not being offered pursuant to this Official Statement.

Commission staff is considering whether to propose to the Commission a refinancing with Additional Bonds of a portion of certain City certificates of participation. The City’s certificates of participation were previously executed and delivered to finance the Commission’s headquarters building. The headquarters building benefits the Commission’s Wastewater Enterprise, as well as its other enterprises. Such City certificates of participation are currently outstanding in the principal amount of $ 161,985,000. If authorized by the Commission and the Board of Supervisors, Additional Bonds could be issued in the near future to refinance the portion of such certificates of participation attributable to the space in such building utilized by the Wastewater Enterprise. T he SFPUC may or may not proceed with the issuance of such Additional Bonds depending on market conditions.

Other Matters
Brief descriptions of the 2026A Bonds, the security and sources of payment for the 2026A Bonds, the SFPUC and the Wastewater Enterprise are provided herein. Such descriptions do not purport to be comprehensive or definitive. Definitions of certain capitalized terms used herein may be found in “ APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE. ” All references made to various documents herein are qualified in their entirety by reference to the forms thereof, all of which are available for inspection at the office of the SFPUC at:

* Preliminary, subject to change.

5 San Francisco Public Utilities Commission
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
Attention: Chief Financial Officer and Assistant General Manager, Business Services (415) 554-3155

THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND

THE WASTEWATER ENTERPRISE
Additional information relating to the SFPUC and the Wastewater Enterprise can be found in “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE” hereto.

PLAN OF FINANCE*
General
The 2026A Bonds are being issued to (a) finance , on an interim basis, certain capital projects benefitting the Wastewater Enterprise, including the Biosolids Digester Facilities Project; (b) retire Commercial Paper Notes issued to finance , on an interim basis, certain capital projects benefitting the Wastewater Enterprise , including the Biosolids Digester Facilities Project; and (c) pay the costs of issuance of the 2026A Bonds . See “ESTIMATED SOURCES AND USES OF FUNDS” and “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – WASTEWATER ENTERPRISE CAPITAL PROGRAM” and “ — THE WASTEWATER ENTERPRISE – The SFPUC’s Environmental Commitment.” The 2026A Bonds are being issued on a taxable basis to preserve the SFPUC’s flexibility to enter into off -take arrangements with various third parties with respect to the Biosolids Digester Facilities Project.

Although the 2026A Bonds are secured by a pledge of Net Revenues of the Wastewater Enterprise, the SFPUC does not expect that Net Revenues will be sufficient to pay the principal of the 2026A Bonds at maturity. As such, the SFPUC intends to pay the principal of the 2026A Bonds from the proceeds of Take -Out Obligations to be issued by the SFPUC on or prior to the maturity of the 2026 A Bonds. If the SFPUC is unable to issue Take -Out Obligations, no assurance can be given that the SFPUC will have sufficient funds on hand to pay the principal of the 2026A Bonds on their maturity date. See “RISK FACTORS – Access to Capital Markets.”

ESTIMATED SOURCES AND USES OF FUNDS
The proceeds of the 2026A Bonds are expected to be applied as follows:

Sources of Funds
Par Amount
Total Sources

Uses of Funds
Retirement of Commercial Paper Notes
Deposit to Capital Project Fund
Underwriters’ Discount
Costs of Issuance(1)
Total Uses

(1) The costs of issuance include amounts for legal fees, Trustee fees, municipal advisor fees, rating agency fees, printing cost s, and other costs relating to the issuance of the 2026A Bonds.

* Preliminary, subject to change.

6 THE 2026A BONDS
General
The 2026A Bonds will be dated as of their date of delivery and will accrue interest from their date of delivery at the rates per annum set forth on the inside cover page of this Official Statement. Interest on the 2026A Bonds will be calculated based on a 360 -day year composed of twelve 30- day months. Interest on the 2026A Bonds is payable on April 1 and October 1 each year, commencing _____ 1, 20__. The 2026A Bonds will mature on the dates and in the principal amounts set forth on the inside cover page of this Official Statement. The 2026A Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple of $5,000. For information on minimum unit sales to purchasers outside the United States, see “ INFORMATION CONCERNING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUTSIDE THE UNITED STATES .” Under the Indenture, the record date with respect to the payment of principal of and interest on the 2026A Bonds is the 15th day of the month immediately preceding an interest payment date, whether such day is a Business Day.

Securities Depository and Book-Entry System
The 2026A Bonds will be issued in fully registered form, registered in the name of Cede & Co., as nominee for The Depository Trust Company ( “DTC”), New York, New York, as the Owner of the 2026A Bonds. So long as DTC, or its nominee, Cede & Co., is the Owner of the 2026A Bonds, all payments on the 2026A Bonds will be made directly to DTC. Disbursement of such payments to the DTC Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners of the 2026A Bonds will be the responsibility of the DTC Participants. See “APPENDIX F – SECURITIES DEPOSITORY AND THE BOOK-ENTRY SYSTEM.” Redemption*
Optional Redemption of 202 6A Bonds. The 2026 A Bonds shall be subject to redemption prior to their stated maturity, at the option of the SFPUC, from and to the extent of any source of available funds, as a whole or in part, on any date on or after ________ 1, 20__*, at a redemption price equal to 100% of the principal amount of the 2026A Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. If 2026A Bonds are to be optionally redeemed in part, the Commission shall direct the maturities, or portions thereof, to be redeemed, and, if less than all of the 2026A Bonds of a particular maturity are to be redeemed, the 2026A Bonds shall be redeemed by lot within any such maturity.

Make-Whole Optional Redemption of 202 6A Bonds. Prior to ________ 1, 20__ *, the 2026 A Bonds are
subject to redemption prior to its stated maturity date either in whole or in part, at the option of the SFPUC, at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the Discounted Value thereof, plus in either case, accrued interest thereon to the date of redemption. See “– Definitions for Make - Whole Optional Redemption of 2026A Bonds” below.

Partial Redemption . If the 2026 A Bonds are redeemed in part, the 202 6A Bonds shall be redeemed pro-rata.

Definitions for Make-Whole Optional Redemption of 2026A Bonds “Blended Treasury Yield” means, with respect to the 202 6A Bonds, the yield computed by the SFPUC or the Calculation Agent as the linear interpolation of two Market Treasury Yields such that the theoretical maturity that corresponds to the interpolated Market Treasury Yield equals the date that corresponds to the remaining average life date of the maturity to be redeemed from the redemption date. The first Market Treasury Yield shall be the yield on an actively traded U.S. Treasury security, or a U.S. Treasury constant maturity with the maturity closest to but no later than the date corresponding to the remaining average life of the 2026 A Bonds to be redeemed. The second Market Treasury Yield shall be the yield on an actively traded U.S. Treasury security or a U.S. Treasury constant

* Preliminary, subject to change.

7 maturity with the maturity closest to but no earlier than the date corresponding to the remaining average life of the 2026A Bonds to be redeemed.
“Calculation Agent ” means a municipal advisor or other agent selected by the SFPUC to perform the calculations required in connection with the redemption of any 202 6A Bonds pursuant to the Indenture. The SFPUC may conclusively rely upon the calculations made by the Calculation Agent in connection with such redemption. “Discount Yield” means the Blended Treasury Yield as determined by the SFPUC or the Calculation Agent with respect to the 2026A Bonds to be redeemed plus __ basis points (__.__%). “Discounted Value” means, with respect to the 202 6A Bonds to be redeemed, the sum as determined by the SFPUC or the Calculation Agent of the amounts obtained by discounting all remaining scheduled payments of principal and interest (exclusive of interest accrued to the date of redemption) on such maturity from their respective scheduled payment dates to the applicable redemption date, at a yield (computed on a semi -annual basis, assuming a 360-day year consisting of twelve 30-day months) equal to the applicable Discount Yield. “Market Treasury Yield ” means that yield, as determined by the SFPUC or the Calculation Agent, assuming semi-annual compounding based upon a 360- day year consisting of twelve 30- day months, which is equal to:
(i) the yield determined using the average of the bid and ask prices for the applicable maturity of an actively traded U.S. Treasury security, reported, as of 11:00 a.m., New York City time, on the Valuation Date on the Bloomberg’s Fixed Income Trading (“FIT”) screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in U.S. Treasury securities); or (ii) if the yield described in (i) above is not reported as of such time or the yield reported as of such time is not ascertainable, the most recent yield published for the applicable U.S. Treasury constant maturity from the F ederal Reserve Statistical Release H.15 Daily Update (or any comparable or successor publication) reported, as of 11:00 a.m., New York City time, on the Valuation Date; or (iii) if the yields described in (i) and (ii) above are not reported as of such time or the yields reported as of such time are not ascertainable, the yield for the applicable maturity of any actively traded U.S. Treasury security shall be based upon the average of yields determined using bid and ask price quotations for such security (after excluding the highest and lowest quotations) as of 3:30 p.m., New York City time, on the Valuation Date received from no less than five primary dealers in U.S. Government securities selected by the SFPUC.
“Valuation Date” means no less than the third Business Day nor more than the twentieth Business Day preceding the redemption date.

Notice of Redemption for 2026A Bonds. Notice of redemption will be mailed by the Trustee at least 30 days but not more than 60 days prior to the redemption date to DTC (so long as the DTC Book- Entry System is used). The actual receipt by the owner of any 2026A Bonds of notice of such redemption is not a condition precedent to redemption, and failure to receive a redemption notice or any defect in a redemption notice will not affect the validity of the proceedings for the redemption of such 2026A Bonds or the cessation of the accrual of interest on the date fixed for such redemption. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – GENERAL REDEMPTION PROVISIONS – Notice of Redemption” and “APPENDIX F – SECURITIES DEPOSITORY AND THE BOOK-ENTRY SYSTEM.”
Rescission of Notice of Redemption for 2026A Bonds. The SFPUC may, at its option, prior to the date fixed for redemption in any notice of redemption of 2026A Bonds, rescind and cancel such notice of redemption by written request to the Trustee and the Trustee will mail notice of such cancellation to the recipients of the notice of redemption being cancelled.

8 Effect of Redemption for 2026A Bonds. When notice of redemption has been duly given as described above, and moneys for payment of the redemption price are held by the Trustee, the 2026A Bonds so called for redemption will, on the redemption date designated in such notice, become due and payable at the redemption price specified in such notice; and from and after the date so designated, interest on the 2026A Bonds so called for redemption will cease to accrue, those 2026A Bonds will cease to be entitled to any benefit or security under the Indenture, and the Owners of those 2026A Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof. The Trustee will, upon surrender for payment of any of said 2026A Bonds, pay such 2026A Bonds at the redemption price, together with accrued interest thereon. All 2026A Bonds redeemed will be cancelled upon surrender and no 2026A Bonds will be issued in place thereof.

Defeasance
The obligations of the SFPUC and the pledge, lien, covenants and agreements of the SFPUC made or provided for in the Indenture as to any 2026A Bonds will be fully discharged and satisfied and will no longer be deemed outstanding thereunder if certain conditions set forth in the Indenture are satisfied. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – DEFEASANCE.”

SECURITY FOR THE BONDS
Pledge of Net Revenues
General. Under the Indenture, the SFPUC has irrevocably pledged the Net Revenues of the Wastewater Enterprise to the punctual payment of principal of, premium, if any, and interest on the Bonds, which consist of any parity revenue bonds, notes and obligations issued under the Indenture, including the 2026A Bonds, and Parity Loans. This pledge is subject to the flow of funds contained in the Indenture, as described below. See “– Flow of Funds.”
The facilities comprising the Wastewater Enterprise have not been pledged or mortgaged and do not otherwise secure payment of the Bonds.

Pursuant to Section 5451 of the California Government Code, the pledge of, lien on and security interest in Net Revenues and certain other funds granted by the Indenture is valid and binding in accordance with the terms thereof from the time of issuance of the 2026A Bonds; the Net Revenues and such other funds will be immediately subject to such pledge; and such pledge will constitute a lien and security interest which will immediately attach to such Net Revenues and other funds and will be effective, binding and enforceable against the SFPUC, its successors, purchasers of the Net Revenues, creditors, and all others asserting rights therein to the extent set forth and in accordance with the terms of the Indenture irrespective of whether those parties have notice of such pledge and without the need for any physical delivery, recordation, filing or other further act. Such pledge, lien and security interest are not subject to the provisions of Article 9 of the California Uniform Commercial Code.

For definitions of capitalized terms used herein and not otherwise defined, see “ APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – THE INDENTURE – DEFINITIONS; EQUAL SECURITY: CERTIFICATES AND OPINIONS.”
Limited Obligation . THE SFPUC IS NOT OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF

ANY , OR INTEREST ON THE BONDS EXCEPT FROM NET REVENUES OF THE WASTEWATER ENTERPRISE. THE SFPUC HAS NO TAXING POWER. THE GENERAL FUND OF THE CITY IS NOT

LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY , OR INTEREST ON THE BONDS,

AND NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY , OR INTEREST ON THE BONDS. THE BONDS ARE NOT

SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE, LIEN, OR ENCUMBRANCE UPON,

ANY OF THE PROPERTY OF THE CITY OR OF THE SFPUC OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT NET REVENUES OF THE WASTEWATER ENTERPRISE.

9 Wastewater Enterprise. The Indenture defines “ Enterprise” (referred to in this Official Statement as the “Wastewater Enterprise”) as the whole and each and every part of the municipal sanitary waste and stormwater collection, treatment and disposal system and auxiliary or related facilities of the SFPUC, including all of the presently existing system of the SFPUC for the collection, treatment and disposal of sanitary waste and stormwater and all future additions, betterments, and extensions to the system or any part thereof.

Net Revenues. The Indenture defines “Net Revenues” as all Revenues, less all Operation and Maintenance Costs of the Wastewater Enterprise.

The Indenture defines “Revenues” as all gross revenues of the Wastewater Enterprise, including all charges received for and all other income and receipts derived by the SFPUC from the operation of the Wastewater Enterprise, or arising from the Wastewater Enterprise, including connection and installation charges, but excluding:
(a) any money received by or for the account of the SFPUC from the levy or collection of taxes; (b) moneys received from the State of California and the United States of America and required to be deposited in restricted funds;
(c) refundable deposits made to establish credit;
(d) advances and contributions made to the SFPUC to be applied to construction; (e) moneys received constituting casualty insurance proceeds with respect to all or any part of the Wastewater Enterprise (which shall be received and disposed of pursuant to the Indenture) and moneys received constituting other insurance proceeds;
(f) moneys received from the sale or disposition of all or any part of the Wastewater Enterprise (which shall be received and disposed of pursuant to the Indenture); (g) moneys received upon the taking by or under the threat of eminent domain of all or any part of the Wastewater Enterprise (which moneys shall be received and disposed of pursuant to the Indenture);
(h) proceeds from Bonds issued by the SFPUC or proceeds from loans or other indebtedness obtained by the SFPUC; and
(i) moneys or securities received by the SFPUC as gifts or grants the use of which is restricted by the donor or grantor.

The term “Revenues” also includes (i) all interest or other income (excluding profits or losses from the sale or disposition of Permitted Investments or other securities owned by or on behalf of the SFPUC) derived from the deposit or investment of any moneys in any fund or account established under the Indenture (excluding any Rebate Fund and any escrow fund pledged for the payment of defeased bonds) or in any fund or account of the Wastewater Enterprise and legally available to pay Debt Service, and (ii) any other moneys, proceeds and other amounts that the SFPUC determines should be “Revenues” under the Indenture.

The Indenture defines “Operation and Maintenance Costs of the Enterprise ” (referred to in this Official Statement as the “ Operation and Maintenance Costs of the Wastewater Enterprise ”) as the reasonable and necessary costs of operating and maintaining the Wastewater Enterprise, calculated on the basis of generally accepted accounting principles, including (among other things) salaries and wages, fees for services, costs of materials, supplies and fuel, reasonable expenses of management, legal fees, accounti ng fees, repairs and other expenses necessary to maintain and preserve the Wastewater Enterprise in good repair and working order, and reasonable amounts for administration, overhead, insurance, taxes (if any), and the payment of pension charges and proportionate payments to such compensation and other insurance or outside reserve funds as the SFPUC may

10 establish or the Board of Supervisors may require with respect to employees of the SFPUC, as provided in the Charter.

However, the term “ Operation and Maintenance Costs of the Wastewater Enterprise” excludes in all cases (a) depreciation and obsolescence charges or reserves therefor, (b) amortization of intangibles or other bookkeeping entries of a similar nature, (c) costs of capital additions, replacements, betterments, extensions or improvements to the Wastewater Enterprise, which under generally accepted accounting principles are chargeable to a capital account or to a reserve for depreciation, (d) charges for the payment of principal of and interest on any revenue bonds or other indebtedness issued before or after the date of the Indenture for Wastewater Enterprise purposes and (e) such costs as are scheduled to be paid by the SFPUC from moneys other than Revenues, such moneys to be clearly available for such purpose.

Flow of Funds
The Indenture provides that all Revenues must be paid into the Revenue Fund, which must be maintained in the City treasury. Moneys in the Revenue Fund, including earnings thereon, are required by the Indenture to be applied for the following purposes and only in the following order of priority:
(a) payment of Operation and Maintenance Costs of the Wastewater Enterprise; (b) payment of Bonds, Parity Loans, Policy Costs and amounts due as reimbursement under any Letter of Credit Agreement, as provided in the Indenture; and (c) any other lawful purpose of the SFPUC.

Net Revenues deposited in the Revenue Fund, as described in (b) above, will be applied to pay interest and principal on the Bonds (which include Parity Loans) and to make deposits to the Bond Reserve Fund if the amounts therein are less than the Required Reserve. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
The Indenture defines “ Refundable Credits ” as (a) with respect to a Series of Bonds issued as Build America Bonds under Section 54AA of Internal Revenue Code of 1986 (the “ Code”), the amounts which are payable by the federal government under Section 6431 of the Code, which the SFPUC has elected to receive under Section 54AA(g)(1) of the Code, and (b) with respect to a Series of Bonds issued as Build America Bonds under any other provision of the Code that creates a substantially similar direct- pay subsidy program, the amounts which are payable by the federal government under the applicable provisions of the Code, which the SFPUC has elected to receive under the applicable provisions of the Code.

The Indenture defines “Build America Bonds” as any bonds or other obligations issued as Build America Bonds under Section 54AA of the Code, or under any other provision of the Code that creates a substantially similar direct-pay subsidy program.

The Indenture provides that all of the Refundable Credits received by the SFPUC shall be deposited immediately upon receipt in the Interest Fund, and such Refundable Credits are irrevocably pledged to the punctual payment of the interest on the Bonds issued as Build America Bonds, and the Refundable Credits shall not be used for any other purpose while any of the Bonds issued as Build America Bonds remain Outstanding. The 2010B Bonds are the only outstanding Build America Bonds of the Wastewater Enterprise, and are expected to be refunded in whole or in part by the 2026B Bonds. See “INTRODUCTION – Concurrent Financing.” Rate Covenants
Sufficiency of Revenues . The SFPUC has covenanted in the Indenture that it will, to the fullest extent permitted by law, establish, fix and prescribe prior to the commencement of each Fiscal Year, rates, fees and charges in connection with the sanitary waste and stormwater collection, treatment and disposal services and facilities

11 furnished by the Wastewater Enterprise so as to yield Revenues at least sufficient, after making reasonable allowances for contingencies and error in the estimates, to pay the following amounts:
(a) the interest on and principal of the Bonds (which include Parity Loans) as they become due and payable (but not including any interest for which moneys have been deposited in the Interest Fund from the proceeds of any Series of Bonds or from any other source); (b) all other payments required for compliance with the terms of the Indenture and of any Supplemental Indenture providing for the issuance of Additional Bonds pursuant to the Indenture; (c) all other payments to meet any other obligations of the SFPUC which are charges, liens or encumbrances upon, or payable from, Revenues; and
(d) all current Operation and Maintenance Costs of the Wastewater Enterprise (but not including such Operation and Maintenance Costs of the Wastewater Enterprise as are scheduled to be paid by the SFPUC from moneys other than Revenues, such moneys to be clearly available for such purpose).

Debt Service Coverage. In addition to the requirements set forth under “ – Sufficiency of Revenues ” above, the Indenture provides that the SFPUC will, to the fullest extent permitted by law, establish, fix, and prescribe, prior to the commencement of each Fiscal Year, rates, fees and charges in connection with the sanitary waste and stormwater collection, treatment and disposal services and facilities furnished by the Wastewater Enterprise, which are reasonably expected to be at least sufficient to yield during such Fiscal Year Net Revenues (together with any fund balances of the SFPUC which are available for payment of Debt Service, but excluding the Bond Reserve Fund), equal to 1.25 times the Annual Debt Service payable in such Fiscal Year.

The SFPUC may make adjustments from time to time in such rates, fees and charges and may make such classification thereof as it deems necessary, but is obligated not to reduce such rates, fees and charges below those in effect unless the Revenues resulting after such reduced rates are put into effect will at all times be sufficient to meet the requirements described in this section, “Rate Covenants.” The failure to yield the amount of Revenues as described under “ – Sufficiency of Revenues ” above, or the failure of Net Revenues to equal 1.25 times Annual Debt Service as set forth in the first paragraph under this “ – Debt Service Coverage” subsection at the end of a Fiscal Year, will not constitute a default or an Event of Default under the Indenture so long as the SFPUC has complied with its obligations described under “ – Sufficiency of Revenues” above and the first paragraph under this “ – Debt Service Coverage” subsection at the commencement of the succeeding Fiscal Year.
“Annual Debt Service ” is defined in the Indenture as the sum of principal and interest on all Outstanding Bonds (including Parity Loans) as computed for the twelve -month period ending June 30 to which reference is made, and calculated by the SFPUC using the following assumptions:
(a) in determining the principal amount due for such twelve -month period ending June 30, payment will (unless a different subsection of this definition applies for purposes of determining principal maturities or amortization) be assumed to be made in accordance with the amortization schedule established for such debt, including any Minimum Sinking Fund Account Payments or any scheduled redemption or payment of Bonds on the basis of Accreted Value, and for such purpose, the redemption payment or payment of Accreted Value will be deemed a principal payment and interest that is compounded and paid as Accreted Value will be deemed due on the scheduled redemption or Payment Date of such Capital Appreciation Bond, but excluding Excluded Principal.
(b) if any Outstanding Bonds constitute Variable Rate Indebtedness, the interest rate will, as of the date of calculation, be: (i) the greater of (a) the average SIFMA rate over the past 3 years times 150% or (b) 4 percent or (ii) if, designated in writing by the SFPUC in the Supplemental Indenture authorizing such Bonds (which the SFPUC must certify, in the case of obligations interest on

12 which is not excluded from gross income for federal income tax purposes under the Code), a fixed rate of interest reasonably determined by the SFPUC for obligations with similar duration, which interest rate has been certified by a Qualified Financial Advisor as reasonable concurrent with the execution and delivery of such Supplemental Indenture.
(c) if Defeasance Obligations have been deposited with and are held by the Trustee or another fiduciary to be used to pay principal and/or interest on specified Bonds, or any amounts have been deposited in the Interest Fund from the proceeds of any Series of Bonds or from any other source to pay interest on such Bonds, then the principal and/or interest to be paid from such Defeasance Obligations or from the earnings thereon, or from such amounts in the Interest Fund, shall be disregarded and not included in calculating Annual Debt Service. (d) in determining the amount of interest coming due during any twelve -month period ending June 30 on any Series of Bonds that are issued as Build America Bonds or obligations issued under any future program similar to Build America Bonds, amounts equal to the Refundable Credits the SFPUC is scheduled to receive during each twelve- month period ending June 30 will be deducted from such interest.
“Excluded Principal ” means each payment of principal of Bonds with a remaining term, on the date of calculation, of not greater than 60 months that the SFPUC intends to pay from the proceeds of Bonds or Parity Loans, other bonds, notes or other obligations of the SFPUC or moneys other than Net Re venues.

The SFPUC has determined that principal of the 2024A Bonds qualif ies as Excluded Principal under the Indenture. As a result of this determination, the principal of the 2024A Bonds will be excluded from the calculation of Annual Debt Service for purposes of the rate covenant described above and the requirements for issuing Additional Bonds under the Indenture. See “ – Debt Service Coverage,” “ – Additional Series of Bonds – Indenture Requirements,” and “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Pursuant to federal sequestration legislation passed by Congress in 2011 and 2013, federal subsidy payments for direct -pay bonds, including Build America Bonds, have been reduced (by formula) from the original funding subsidy level of 35% of interest costs. The current sequestration reduction rate of the federal subsidy payment for Build America Bonds is 5.7% (or a net subsidy level of 33.005% of interest costs on Build America Bonds), which rate will remain in effect through September 30, 2031, unless changed by legislation. Refundable Credits sought by the SFPUC for its Build America Bonds have been and are expected to be reduced by this percentage. This reduction has increased, and will continue to increase, the SFPUC’s net interest cost. In Fiscal Years 2023-24 and 2024- 25, the SFPUC received approximately $3.4 million and $1.6 million, respectively, in Refundable Credits for the Wastewater Enterprise, representing approximately 0.8% and 0.3%, respectively, of total revenues in such years. Additionally, Congress may take action to terminate, extend, or otherwise modify reductions in federal subsidy payments due to sequestration at any time. The SFPUC can give no assurance regarding the level of future federal subsidy payments or any changes in the sequestration rate, if any, in the future . The 2010B Bonds (as defined in Appendix A hereto) are the only outstanding Bonds of the Wastewater Enterprise for which the SFPUC receives federal subsidy payments, and are expected to be refunded in whole or in part by the 2026B Bonds.

See “INTRODUCTION – Concurrent Financing.”
No Reserve Account for 2026A Bonds
The Indenture requires that the Bond Reserve Fund be established with the Trustee and funded in an amount equal to the “ Required Reserve,” if any, applicable to each series of Bonds. If the Required Reserve for a Series of Bonds is greater than zero, the Indenture requires the establishment of a bond reserve account (each, a “Reserve Account”) within the Bond Reserve Fund for such Series of Bonds, and requires the deposit in that bond reserve account of an amount equal to the Required Reserve for the related Series of Bonds.

The Nineteenth Supplemental Indenture does not require the establishment of a Reserve Account for the respective 2026A Bonds. The Reserve Account established for the 2010B Bonds do es not secure the 2026A Bonds, and will be closed if the 2010B Bonds are refunded in whole by the 2026B Bonds . No Reserve Account has been established for any other series of Outstanding Bonds. See “APPENDIX A – THE PUBLIC

13 UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Outstanding Parity Revenue Bonds.”
Additional Series of Bonds
The Charter and the Indenture authorize the issuance of Additional Bonds payable from Net Revenues on a parity with Outstanding Bonds and the 2026A Bonds, upon satisfaction of the conditions set forth therein.

The SFPUC expects to issue Additional Bonds, which may include Bonds evidencing obligations to repay the WIFIA Lender in connection with additional WIFIA loans, to finance the costs of additional improvements included in the Sewer System Improvement Program (the “SSIP ”), and other portions of the Wastewater Enterprise’s capital program. See “RISK FACTORS – Costs of Capital Program Projects; Timely Completion of Capital Program Projects” and “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM.”
Charter Requirements. Under the Charter, the SFPUC may issue revenue bonds (including Additional Bonds) relating to the Wastewater Enterprise without voter approval in the following circumstances, among others:
(a) to issue revenue bonds (including Additional Bonds) approved by an affirmative vote of two- thirds of the members of the Board of Supervisors for the purpose of reconstructing, replacing, expanding, repairing or improving the Wastewater Enterprise or for any other lawful purpose of the Wastewater Enterprise, including the refunding of existing obligations; (b) to issue bonds (including Additional Bonds) approved by an affirmative vote of three -fourths of the members of the Board of Supervisors if the bonds are to finance buildings, fixtures or equipment which are deemed necessary by the Board of Supervisors to comply with an order of a duly constituted state or federal authority having jurisdiction over the Wastewater Enterprise; and (c) to issue refunding bonds which are expected to result in net debt service savings to the City on a present value basis, calculated as described in the SFPUC ’s Debt Management Policies and Procedures.

The Charter also generally authorizes the SFPUC to issue revenue bonds upon the approval of a majority of the voters voting on the proposition at a general or special election.

Notwithstanding any other provision of the Charter or of any ordinance of the City, the Board of Supervisors may, in connection with the issuance of additional bonds as described under paragraph (a) above, take any and all actions necessary to authorize, issue and repay such bonds, including, but not limited to, modifying schedules of rates and charges to provide for the payment and retirement of such bonds, subject to the following conditions:
(a) Certification by an independent engineer retained by the SFPUC that:
(1) the projects to be financed by the additional bonds, including the prioritization, cost estimates and scheduling, meet utility standards; and
(2) that estimated net revenue after payment of operating and maintenance expenses will be sufficient to meet debt service coverage and other indenture or resolution requirements, including debt service on the bonds to be issued, and estimated repair and replacement costs.

14 (b) Certification by the City Planning Department that facilities under the jurisdiction of the SFPUC funded with such bonds will comply with applicable requirements of the California Environmental Quality Act (“CEQA”).

Indenture Requirements. The Indenture provides that Additional Bonds secured on a parity with the Bonds may be issued for any lawful purpose if no Event of Default has occurred and is continuing under the Indenture or any Supplemental Indenture and no event has occurred which, but for the passage of time or the giving of notice, would constitute an Event of Default under the Indenture or any Supplemental Indenture. Prior to the issuance of such Additional Bonds, the SFPUC is required to file with the Trustee, among other documents, the following:
(a) a Certificate of the SFPUC setting forth for each of the next three Fiscal Years estimates of (A) Revenues, (B) Operation and Maintenance Costs of the Enterprise and (C) Net Revenues; and (b) a Certificate of the SFPUC demonstrating that (1) the ratio of (A) Net Revenues for the most recent Fiscal Year for which audited financial statements are available, or any consecutive twelve calendar month period during the eighteen calendar month period prior to the issuance of such additional Series of Bonds, to (B) Annual Debt Service for the current Fiscal Year, calculated as of the date of sale of, and including such additional Series of Bonds, will not be less than 1.25:1; or (2) the ratio of (A) Net Revenues projected by the SFPUC for each of the next three Fiscal Years as determined in the Indenture, and including in such projections amounts projected to be received from any adopted rate increases and fund balances of the SFPUC which are projected to be available for the payment of Debt Service (but excluding the Bond Reserve Fund), to (B) Annual Debt Service in each of such three Fiscal Years, calculated as of the date of sale of and including such additional Series of Bonds, will not be less than 1.25:1 in each of such Fiscal Years.

See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – THE INDENTURE – DEFINITIONS; EQUAL SECURITY: CERTIFICATES AND OPINIONS” and “– ISSUANCE OF ADDITIONAL SERIES OF BONDS.”
The Indenture provides the SFPUC with flexibility as to the nature and terms of any Additional Bonds issued with a lien and charge on Net Revenues on a parity with the Outstanding Bonds. Such Additional Bonds may:
mature over any period of time; bear interest at a fixed, variable or zero rate; be in any denominations; be in any form (including registered, coupon or book- entry); include or exclude redemption provisions; be subject to optional or mandatory tender for purchase; be sold at such price or prices; be further secured by any separate and additional security; and otherwise include such additional terms and provisions as the SFPUC may determine, consistent with the Indenture and applicable provisions of the Charter.

Additional Parity Loans
Pursuant to the Charter, the SFPUC can incur indebtedness, including additional State and federal loans, without voter approval, but subject to Board of Supervisors ’ approval. In addition, the Indenture permits the SFPUC to enter into Parity Loans or loans on a subordinated lien basis relative to the Bonds, as determined by the SFPUC.

Under the Indenture, the SFPUC may only enter into additional Parity Loans if no Event of Default has occurred and is continuing under the Indenture or any Supplemental Indenture (and no event has occurred which, but for the passage of time or the giving of notice, would constitute an Event of Default under the Indenture or any Supplemental Indenture).

In addition, in connection with the execution and delivery of such Parity Loans, the SFPUC is required to deliver a Certificate to the Trustee setting forth, for each of the next three Fiscal Years after the delivery of the Parity Loans:
(a) the Revenues and Operation and Maintenance Costs of the Wastewater Enterprise and Net Revenues; and

15 (b) the Annual Debt Service assuming delivery of the Parity Loans; demonstrating that the estimated Net Revenues (together with any fund balances of the SFPUC which are available for Debt Service, but excluding the Bond Reserve Fund), in each of such three Fiscal Years is at least equal to 1.25 times the Annual Debt Service.

Pursuant to the SRF loan program (the “ SRF Loan Program ”), the SFPUC has entered into nine SRF loans that fund certain capital projects of the Wastewater Enterprise with a maximum principal amount authorized to be disbursed thereunder of approximately $570.5 million. The SFPUC plans to apply for additional SRF loans over the next several years to obtain long -term financing for a portion of the SSIP. However, the SFPUC can give no assurance that it will receive additional SRF loans. The nine SRF loans constitute “Parity Loans” under the Indenture. The SFPUC may also enter into additional WIFIA loans constituting “Parity Loans.” See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Refunding Bonds
City Charter Requirements. The Charter allows refunding bonds to be issued without voter approval if such refunding results in net debt service savings on a present value basis, calculated as provided by ordinance. The Charter also allows refunding bonds to be issued without voter approval and without satisfying such net debt service savings requirement when approved by a vote of two-thirds of the members of the Board of Supervisors.

Indenture Requirements . The Indenture provides that Additional Bonds may be issued to refund any Bonds without meeting the test for the issuance of Additional Bonds described above, if the SFPUC delivers to the Trustee (among other documents) a certificate of a Qualified Financial Advisor to the effect that after giving effect to the application of the proceeds of the additional Series of Bonds, either (i) Annual Debt Service will not be increased in any Fiscal Year (excluding Debt Service on the Outstanding Bonds to be refunded) in an amount in excess of 5% or (ii) the Average Annual Debt Service for the Bonds of such additional Series will be equal to or less than the Average Annual Debt Service on the Bonds to be refunded (during the period from the issuance of the additional Series to the last maturity date of the Outstanding Bonds to be refunded).

For purposes of calculating the Average Annual Debt Service under the Indenture, if any of the Outstanding Series of Bonds constitute Balloon Indebtedness or if Bonds then proposed to be issued would constitute Balloon Indebtedness, then, for purposes of determining Average Annual Debt Service, such Bonds the principal of which the Commission has not specified as Excluded Principal will be amortized for a period specified by the Commission (but no longer than forty (40) years from the date of the issuance of the Bonds to which such Balloon Indebtedness relates) on a substantially level debt service basis or other amortization basis designated by the Commission, calculated based on a fixed rate equal to the rate at which the Commission could borrow for such period, as certified by a Qualified Financial Advisor.
“Balloon Indebtedness” means a Series of Bonds 25% or more of the principal of which matures on the same date and is not required by the documents governing such Bonds to be amortized by payment or redemption prior to such date. The 2026A Bonds maturing on October 1, 20___ * in the principal amount of $__________ *
constitute Balloon Indebtedness under the Indenture but have not been specified as Excluded Principal . However, the principal of the 2024A Bonds has been designated as Excluded Principal. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
Subordinate Obligations; Obligations Not Payable from Revenues The Indenture permits the SFPUC to authorize and issue bonds, notes, warrants, certificates or other obligations or evidences of indebtedness, the principal of or interest on which would be payable either (i) from Net Revenues after and subordinate to the payment from Net Revenues of the principal of and interest on the Bonds, or

* Preliminary, subject to change.

16 (ii) from moneys which are not Revenues. The SFPUC may issue bonds or incur other indebtedness secured by a pledge of Net Revenues on a basis subordinate to the pledge thereof securing the Bonds without limitation.

Investments
The Indenture provides that moneys in all funds and accounts held by the Trustee under the Indenture shall be invested upon receipt in Permitted Investments as directed by the SFPUC and all funds and accounts held by the City Treasurer (the “City Treasurer”) shall be invested in Legal Investments. “Legal Investments ” means any bonds, notes, certificates of indebtedness, bills, acceptances or other securities in which the City Treasurer may legally invest the SFPUC’s funds. For information regarding the investment of moneys held in the various funds and accounts of the SFPUC, see “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Investment of SFPUC Funds.”

DEBT SERVICE REQUIREMENTS
Set forth in the following table are debt service requirements for the Outstanding Bonds and the 2026A Bonds assuming no early redemptions.
(Remainder of Page Intentionally Left Blank)

17 DEBT SERVICE REQUIREMENTS ON
OUTSTANDING BONDS AND 2026A BONDS
Fiscal Year
(ending
June 30)
Outstanding
Parity Revenue Bonds(1)(2)(3)
Parity
Loans(4) 2026A Bonds Interest(5)
Total Bond
Debt Service
Total Debt Service
including Parity Loans(6)
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
2061
2062
TOTAL(6)

(1) Comprised of debt service relating to the outstanding 2010B Bonds, 2013B Bonds, 2016A Bonds, 2016B Bonds, 2018A Bonds, 2018B Bonds, 2021A Bonds, 2021B Bonds, 2022B Bonds, BDFP WIF IA Bond (relating to three draws on the BDFP WIFIA Loan as of the date of this Official Statement), STPI WIFIA Bond (relating to two draws on the STPI WIFIA Loan as of the date of this Official Statement), Project 1 WIFIA Bond (relating to one draw on the Project 1 WIFIA Loan as of the date of this Official Statement), 2023A Bonds, 2023B Bonds, 2023C Bonds, 2024A Bonds, 2024B Bonds, 2024C Bonds, and 2024D Bonds. Assumes 2023C Bonds bear inte rest at a rate of 4% per annum after the Initial Term Rate Period (as defined in the Fifteenth Supplemental Indenture). Does not include debt service relating to any Parity Loans, subordinate Commercial Paper Notes or Revolving Notes. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Outstanding Parity Revenue Bonds,” “ – Parity Loans,” “ – Water Infrastructure Finance and Innovation Act Loans” and “– Subordinate Debt and Interim Funding Program.” Does not reflect the issuance of the 2026B Bonds. See “INTRODUCTION – Concurrent Financing.” (2) Calculation of interest due on outstanding parity revenue bonds shown without an offset for Refundable Credits . (3) Net of capitalized interest payments.
(4) Includes SRF loans for Lake Merced Green Infrastructure Project, Southeast Treatment Plant Primary/Secondary Clarifier Upgrade Project , Southeast Treatment Plant 521/522 and Disinfection Upgrade Project and North Point Facility Outfall Rehabilitation Project for which payment schedules have been established. See “– Parity Loans.” Does not include debt service relating to Parity Loans for which a payment schedule has not been established. (5) Does not include principal on 2026A Bonds. See “PLAN OF FINANCE.” (6) Totals may not add due to independent rounding.

18 RISK FACTORS
This section provides a general overview of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in evaluating an investment in the 2026A Bonds. This section is not meant to be a comprehensive or definitive discussion of all of the risks associated with an investment in the 2026A Bonds. The order in which this information is presented does not necessarily reflect the relative importance of various risks or the probability of their occurrence.

Potential investors in the 2026A Bonds are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the risk factors discussed below, among others, could lead to a decrease in the market price and/or in the marketability of the 2026A Bonds or adversely affect the ability of the SFPUC to make timely payments of principal of or interest on the 2026A Bonds. There can be no assurance that other risk factors not discussed herein will not become material in the future and the SFPUC has not undertaken to update investors about the emergence of the risk factors in the future.

General
The ability of the SFPUC to comply with its covenants under the Indenture and to generate Net Revenues sufficient to pay principal of and interest on the Bonds may be adversely affected by actions and events outside of the control of the SFPUC and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or persons obligated to pay fees and charges. Among other matters, general and local economic conditions and changes in law and government regulations could adversely affect the amount of Net Revenues realized by the SFPUC or significantly raise the cost of operating the Wastewater Enterprise.

In addition, the realization of future Net Revenues is subject to, among other things, the capabilities of management of the SFPUC, the ability of the SFPUC to provide service to its retail and wholesale customers, the ability of the SFPUC to establish, maintain and collect charges from its customers and the ability of the SFPUC to establish, fix and prescribe rates and charges sufficient to pay for Operation and Maintenance Costs of the Wastewater Enterprise, the Bonds and other obligations payable from Net Revenues. See “ APPENDIX A – THE

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES” and “– FINANCIAL OPERATIONS.”
Bond Payment Risks
Limited Obligation. If the SFPUC defaults on its obligations to make debt service payments on the Bonds, the Trustee has the right under the Indenture to accelerate the total unpaid principal amount of the Bonds. However, in the event of a default and such acceleration, there can be no assurance that the SFPUC, and correspondingly the Trustee, will have sufficient moneys available for payment of the Bonds.

The SFPUC is not obligated to pay the principal of, premium, if any, or interest on the Bonds except from Net Revenues. The SFPUC has no taxing power. The General Fund of the City is not liable for the payment of the principal of, premium, if any, or interest on the Bonds, and neither the credit nor the taxing power of the City is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or of the SFPUC or any of its income or receipts, except Net Revenues of the Wastewater Enterprise. See “SECURITY FOR THE BONDS.”
No Bond Reserve Account . No Reserve Account has been established for the 2026A Bonds. The Reserve Accounts established with respect to other Series of Bonds do not secure the 2026A Bonds. See “SECURITY FOR THE BONDS – No Reserve Account for 2026A Bonds.”
Limitations on Remedies . The remedies available to the owners of the Bonds upon the occurrence of an event of default under the Indenture in many respects depend upon judicial actions which are themselves often

19 subject to discretion and delay and could prove both expensive and time consuming to obtain. In addition to the limitations on remedies contained in the Indenture, the rights and obligations under the Bonds and the Indenture may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against charter cities and counties in California.

The opinion to be delivered by Bond Counsel, concurrently with the issuance of the 2026A Bonds, that the 2026A Bonds constitute valid and binding, limited obligations of the SFPUC, and the Indenture constitutes a valid and binding obligation of the SFPUC, will also be subject to such limitations. The various other legal opinions to be delivered concurrently with the issuance of the 2026A Bonds will be similarly qualified. See “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.”
If the SFPUC fails to comply with its covenants under the Indenture or to pay principal of or interest on the Bonds, there can be no assurance that the available legal remedies will be adequate to protect the interests of the holders of the Bonds.

Risks Related to Wastewater Enterprise Facilities and Operations The operation of the Wastewater Enterprise, and the physical condition of the Wastewater Enterprise facilities, are subject to a number of risk factors that could adversely affect the reliability of the SFPUC to provide sewage and stormwater collection and treatment services, or that could increase the operating expenses of the Wastewater Enterprise. Prolonged damage to the Wastewater Enterprise facilities could interrupt the ability of the SFPUC to realize Net Revenues sufficient to pay principal of and interest on the Bonds, or require the SFPUC to increase expenditures for repairs significantly enough to adversely impact the SFPUC’s ability to pay the principal of or interest on the Bonds. These factors could include, among others, the following:

Aging Facilities. Certain Wastewater Enterprise facilities are near the end of their useful life. Aging assets may result in decreased reliability due to potential sewer line breakage and unplanned facility outages and place a greater maintenance burden on Wastewater Enterprise operations. See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – Combined Sewage and Stormwater System.” Aging facilities, if left unaddressed, could potentially result in increasing system failures, sinkholes in the street, reduced system reliability, regulatory violations and possibly risks to public health and safety and the environment.

The SFPUC uses a risk -based approach to improve collection system facilities . The capital program is intended to help increase system reliability through equipment and facility improvement including, among other things, increasing sewer inspections and condition assessments in order to prioritize areas of pipeline improvements more effectively. The number of targeted replacement pipe miles will vary in the future based on a number of factors, such as shifting focus towards asset renewal and extending service life through an application of various techniques (including but not limited to trenchless spot lining, limited spot dig- up repairs, whole asset lining, and other industry best practices), considering the affordability and deliverability of full sewer replacement projects and of the Wastewater Enterprise’s entire capital program. See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – Combined Sewage and Stormwater System – Sewer Lines.” In addition to the collection system, other types of facilities, such as treatment plants, pump stations, force mains, transport/storage boxes, and outfalls also face potential reliability issues due to age. See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program.” Aging facilities are also among the allegations in the SFPUC’s pending litigation filed by the USEPA and the Regional Water Quality Control Board. See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – REGULATORY MATTERS – Federal and State Clean Water Act Permits.”
Limited Redundancy. Many critical Wastewater Enterprise facilities must remain constantly operational to collect and treat sewage and stormwater flows and meet relevant regulatory requirements. See “APPENDIX A –

20 THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – REGULATORY MATTERS.” Certain of these Wastewater Enterprise facilities and systems are aging and have limited redundancy. See “ – Aging Facilities.” In addition, the Oceanside Treatment Plant and the other facilities in the Westside Watersheds are not interconnected with the Southeast Treatment Plant, the North Point Facility or the other facilities in the Bayside Watersheds (each as defined in Appendix A hereto). See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – Wastewater Treatment.” This limited redundancy in facilities and systems constrains the SFPUC’s ability to take components of the system out of service for maintenance and repairs, or to provide backup treatment and other facilities in the event of an unplanned outage. For example, work at the Southeast Treatment Plant is being performed while the plant is operating, requiring coordination of facility and systems shutdowns with construction plans. During dry weather, however, the collection system does have excess storage capacity due to the transport/storage structures which can provide up to 200 million gallons worth of capacity and help facilitate treatment flexibility when needed. The SFPUC’s capital program is adding some redundancy where feasible, including power supply redundancy for the treatment facilities and pump stations , and rehabilitation and addition of redundant pumps at some major pump stations.

Seismic Hazards . The San Francisco Bay Area, consisting of the nine counties contiguous to the Bay:

Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma Counties (the “Bay Area”) is in a seismically active region. The San Andreas Fault lies immediately west of San Francisco, and the Hayward Fault is approximately 15 miles to the east of San Francisco. A third major fault, the Calaveras Fault, is a branch of the Hayward Fault and lies east of the Hayward Fault.

During the past 150 years, the Bay Area has experienced several major and numerous minor earthquakes.

The largest was the 1906 San Francisco earthquake along the San Andreas Fault with an estimated magnitude of 8.2 on the Richter scale. The 1868 Hayward earthquake along the Hayward Fault had an estimated magnitude of between 6.8 and 7.0 on the Richter scale. The 1989 Loma Prieta earthquake along the San Andreas Fault had an estimated magnitude of 6.9 on the Richter scale. The most recent significant earthquake was the 2014 South Napa earthquake on the West Napa Fault, the northern extension of the Calaveras Fault, which had a magnitude of 6.0 on the Richter scale and an epicenter near the city of Napa, approximately 50 miles north of San Francisco. According to United States Geological Survey findings, a significant earthquake along these or other faults is probable during the repayment period of the Bonds. A significant earthquake that impacts San Francisco could adversely affect the ability of Wastewater Enterprise customers to pay for service and the capital and operating expenses of the Wastewater Enterprise.

Older facilities may have an increased risk of failure in the event of an earthquake. The capital program includes recently completed, planned and proposed improvements to such older facilities for the purpose of improving seismic reliability.

With certain minor exceptions, the SFPUC does not maintain commercial earthquake insurance coverage for the facilities. See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Risk Management and Insurance.”
Natural and Man -Made Disasters. Natural disasters such as earthquakes, landslides and fires, and man - made disasters or accidents, could interrupt operation of the Wastewater Enterprise, resulting in liability claims against the Wastewater Enterprise, or otherwise adversely impacting the ability of the Wastewater Enterprise to provide services and/or collect Revenues. See also “ – Risks Related to Financial Operations – Decrease in Water Sales Volumes.”
Casualty Losses . The SFPUC’s risk management program includes both self -insured and insured coverages; however, the program does not provide coverage for every conceivable risk of loss. Damage attributable to seismic events and environmental pollution are excluded. In situations where the SFPUC has not purchased commercial coverage, the Wastewater Enterprise has a “self -retention” program that it administers and retains budgeted resources internally to provide coverage for loss liabilities. See also “ APPENDIX A – THE PUBLIC

UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER

21 ENTERPRISE – FINANCIAL OPERATIONS – Risk Management and Insurance.” The SFPUC is not required to either insure against or self -insure against every potential risk of loss, and there is a risk that damage or destruction of property and equipment comprising the Wastewater Enterprise could occur for which no insurance or self - insurance funds will be available. There can be no assurance that insurance providers will pay claims under any policies promptly, or at all, should a claim be made under such policies in connection with property loss or damage.

It is possible that an insurance provider will refuse to pay a claim, especially if it is substantial, and force the SFPUC to sue to collect on or settle the insurance claim. Further, there can be no assurances that any insurance proceeds will be sufficient to rebuild or replace any damaged property.

Insurance Coverage. The SFPUC believes it maintains a comprehensive risk management program. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Risk Management and Insurance.” However, like other utilities, the SFPUC is susceptible to fluctuations in the insurance market. Any adverse impacts to the insurance market relating to wildfires or other natural disasters could lead to higher costs or prohibitively expensive coverage, or limited or unavailable coverage for certain types of risk, which may have an adverse effect on the SFPUC’s financial condition.

Climate Change . The City and the SFPUC have taken actions aimed at mitigating climate risk. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – Climate Change.” The effect of climate change on future storms, sea level rise, and rising tides, however, may be significant.

Projected levels for sea level rise and rising tides are expected to result in a backflow (or inflow) of San Francisco Bay water into the sewer system at the lowest weir elevation and increased infiltration due to higher groundwater in coastal areas , and may adversely impact the viability of the gravity- based sewer lines. Climate change is also expected to lead to more powerful storms that may exceed the capacity of the SFPUC’s combined sewer system and cause damage to the Wastewater Enterprise’s facilities. The costs of remedying any such damage could be substantial. Further, flooding damage could expose the SFPUC to litigation and other legal risks, which could cause the SFPUC to incur significant costs related to such legal claims or proceedings. See also “ APPENDIX A – THE

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – System Capacity” and “– Climate Change.”
In San Francisco, during severe storm events, properties in low -lying areas with structures built on or near land that was originally channels or bays may experience surface flooding or backups through their building’s internal plumbing fixtures. In the last 10 years, severe rainstorms caused flooding in certain low -lying areas and resulted in some property damage in 2017, 2021, the end of 2022 and the beginning of 2023. The storm events at the end of 2022 and the beginning of 2023 have given rise to over 100 claims and seven individual lawsuits with private property-owner plaintiffs. The SFPUC answered two lawsuits covering a majority of the plaintiffs on December 19, 2023. The SFPUC is vigorously defending all of these lawsuits. At this time, the SFPUC cannot estimate the costs associated with defending and/or resolving the flooding plaintiffs’ allegations . See “APPENDIX A – THE PUBLIC

UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – REGULATORY MATTERS – Federal and State Clean Water Act Permits.” Additionally, climate change may cause more frequent and severe drought conditions, resulting in decreases in water sales volumes . See “RISK FACTORS – Risks Relating to Financial Operations – Decrease in Water Sales Volumes.”
Safety and Security . The occurrence of military conflicts and terrorist activities , including the targeting of utility infrastructure, may adversely impact the operations of the SFPUC, including the Wastewater Enterprise, and/or the finances of the SFPUC. The SFPUC continually plans and prepares for emergency situations. However, there can be no assurance that any existing or additional safety and security measures will prove adequate in the event that military conflicts or terrorist activities are directed against the assets of the Wastewater Enterprise or that costs of security measures will not be greater than presently anticipated.

Cybersecurity. Cybersecurity breaches could damage the SFPUC’s information security systems and cause disruption to the SFPUC’s operations and the provision of SFPUC services. The costs of remedying any such

22 damage or protecting against future attacks could be substantial. Further, cybersecurity breaches could expose the SFPUC to litigation and other legal risks, which could cause the SFPUC to incur significant costs related to such legal claims or proceedings. For more information regarding the SFPUC’s cybersecurity measures, see “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE WASTEWATER ENTERPRISE – Cybersecurity.” Statutory and Regulatory Compliance . The operation of the Wastewater Enterprise is subject to a variety of federal and State statutory and regulatory requirements concerning matters such as asset management, water quality, discharge requirements and biosolids management. Significant fines and penalties, as well as orders requiring capital improvement plans and projects, could result should the SFPUC fail to comply with applicable laws, regulations, permits, and orders . Claims could also be made by private parties. Changes in the scope and standards for public agency wastewater systems such as the Wastewater Enterprise, including changes requiring standards higher than those currently required for compliance, may also lead to new or revised permit requirements or administrative orders issued by federal or State regulators. Such regulatory actions could also require significant capital expenditures to achieve statutory and regulatory compliance, which may impact the SFPUC’s capital improvement plans, projects and priorities for the Wastewater Enterprise. C ompliance with increased regulatory requirements or enforcement orders could impose substantial additional operating expenses on the Wastewater Enterprise. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – REGULATORY MATTERS.” Labor Actions . A work stoppage or other labor action could limit the SFPUC’s ability to operate the Wastewater Enterprise and adversely impact Revenues. See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – THE PUBLIC UTILITIES COMMISSION – Employee Relations – San Francisco.” Construction Related Risks
General. Construction projects in the Wastewater Enterprise’s capital program are subject to ordinary construction risks and delays applicable to projects of their kind, including but not limited to (i) inclement weather affecting contractor performance and timeliness of completion, which could affect the costs and availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors; (ii) contractor claims or nonperformance; (iii) failure of contractors to execute within contract price; (iv) work stoppages or slowdowns; (v) failure of contractors to meet schedule terms; (vi) supply chain issues; (vii) errors or omissions in contract documents requiring change orders; (viii) the occurrence of a major seismic event; (x) delays in obtaining necessary permits; or (x i) unanticipated project site conditions, including the discovery of hazardous materials on the site , historic or culturally significant artifacts, or other issues regarding compliance with applicable environmental standards, and other natural hazards or seismic events encountered during construction. In addition, given the limited redundancy of certain Wastewater Enterprise facilities and systems, such systems must remain operational during construction, which could affect construction schedules or budgets. See “ – Risks Related to Wastewater Enterprise Facilities and Operations.”
In addition, the SFPUC expects numerous other large construction projects to be scheduled in the region simultaneously, which could potentially limit contractor resources available to the SFPUC during bidding or construction phases. Further, the number of available bidders for highly specialized work (e.g., tunneling in an urban environment) is limited. The SFPUC conducts regular contractor outreach and expects to continue to work closely with potential contractors to attempt to mitigate such impacts.

Furthermore, much of the construction work for the Wastewater Enterprise’s capital program is occurring at a single physical location, the Southeast Treatment Plant. The phasing staging, materials and/or equipment laydown areas, parking, truck routes, security, and operating needs are being clearly defined for the plant and each individual project by the SFPUC, with consideration of multiple project interfaces. The Southeast Treatment Plant will remain in operation while these projects are being implemented. Currently logistics planning is identifying on and off site parking, construction laydown and staging areas, truck routing for regular operations and construction and the overall facility and equipment shut -down schedule required to maintain permit compliance and complete capital program projects.

23 Increased construction costs or delays for any reason in connection with the Wastewater Enterprise’s capital program could impact the Wastewater Enterprise’s financial condition in general and the implementation of its capital programs in particular.

See also “– Risks Relating to Financial Operations – Cost of Capital Program Projects; Timely Completion of Capital Program Projects.”
Land Acquisition. Certain of the Wastewater Enterprise’s capital projects will require the SFPUC to acquire land in and around its facilities in San Francisco. For example, the Southeast Treatment Plant is located in a densely urban environment with industrial and residential buildings – as such, securing space around the Southeast Treatment Plant will be critical. A right-of-way manager has been hired to manage land issues because many parcels require long lead times to gain site control. Property is challenging to acquire or lease in the Bay Area generally and in San Francisco in particular. Real estate prices in San Francisco and throughout the Bay Area can be volatile and have in general been increasing during recent years. The approved project budgets currently include estimated costs related to future land purchases required for the expansion of the Southeast Treatment Plant and potential land leases for construction staging areas. At present, the SFPUC cannot predict the final cost of such acquisitions and leases; but it is possible that such costs may exceed budgeted amounts.

Risks Relating to Financial Operations
Limitations on Rate Setting and Challenge to Established Rates. The generation of Revenues sufficient to satisfy the requirements of the Indenture and to pay the principal of and interest on the Bonds will require the SFPUC to raise wastewater rates payable by its customers. The increase of wastewater rates is subject to various substantive and procedural requirements and limitations. See “ APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS.”
On December 12, 2023, the City was served with a purported class action lawsuit challenging the compliance of the rates charged by the Wastewater Enterprise with the requirements of Proposition 218. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – State Law Limitations – Proposition 218” and “– Proposition 218 Litigation.” Decrease in Water Sales Volumes . Under the SFPUC’s current rate structure, customers’ sewer service charges are comprised of a fixed monthly service charge, a variable sanitary sewer component and a stormwater component based on property size and/or parcel characteristics. The variable sanitary sewer component is based on the assumed percentage of metered water usage discharged into the sewer system, or “flow factor.” As a result, water deliveries at lower levels would result in lower Revenues of the Wastewater Enterprise. Reduced water deliveries could result from, among other circumstances, changes in the local economy, reduced water supply, drought response actions, conservation measures or damage to storage, transportation, treatment or delivery systems of the SFPUC’s Water Enterprise. See “– Risks Related to Wastewater Enterprise Facilities and Operation s – Seismic Hazards,” “– Natural and Man- Made Disasters ” and “– Climate Change ,” and “APPENDIX A – THE PUBLIC

UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Wastewater Enterprise Rates and Charges – Current Wastewater Rates and Charges.”
Increased Operating and Maintenance Expenses . There can be no assurance that the Operating and Maintenance Expenses of the SFPUC, such as wages and salaries, pension and other benefits, and purchased power costs, will not increase, perhaps substantially. See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Operating and Maintenance Expenses.”
WIFIA Loan Agreements . Disbursements under the WIFIA Loan Agreements are subject to various conditions. See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Water Infrastructure Finance and Innovation Act Loans – Conditions to Disbursements under WIFIA

24 Loan Agreements.” If the SFPUC is unable to make draws under the WIFIA Loan Agreements to finance eligible costs of the Biosolids Digester Facilities Project, the Southeast Treatment Plant Improvements Project or the Project 1 Projects, as applicable, the SFPUC may need to issue additional notes, revenue bonds or other revenue secured obligations to pay for such project costs. There can be no assurance that the SFPUC will be able to issue such obligations or that the issuance of such obligations will not result in higher borrowing costs. See “ APPENDIX A –

THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Water Infrastructure Finance and Innovation Act Loans.”
Interim Funding Program Facilities
Commercial Paper Notes . The bank credit facilities supporting the Commercial Paper Notes are subject to early termination upon the occurrence of certain events, including the failure of the SFPUC to make certain payments, the occurrence of certain bankruptcy or insolvency- related events, the reduction below specified levels or the withdrawal or suspension of ratings on certain obligations of the SFPUC payable from Net Revenues or certain other specified events of default. Upon the occurrence of such termination, one or more of the following would likely occur: (a) the SFPUC would be prohibited from issuing additional notes supported by such credit facilities; (b) any outstanding reimbursement obligation of the SFPUC to the bank providing such facility for draws made for the payment of principal of or interest on Commercial Paper Notes could bear interest at rates higher than the rates borne by the Commercial Paper Notes; and (c) any such outstanding reimbursement obligation of the SFPUC could be accelerated and become immediately due and payable. The Commercial Paper Notes and any reimbursement obligations are payable from Net Revenues on a basis subordinate to the Bonds.

Revolving Notes. The commitment of the bank to make advances under the U.S. Bank Credit Facility (as defined in Appendix A hereto) (the repayment obligation of the SFPUC for which are evidenced by the Revolving Notes (as defined in Appendix A hereto) ) may be terminated by the bank upon the occurrence of certain events, including the failure of the SFPUC to make certain payments, the occurrence of certain bankruptcy or insolvency- related events, the reduction below specified levels or the withdrawal or suspension of ratings on certain obligations of the SFPUC payable from Net Revenue s or certain other specified events of default. Upon such an event of default, (a) the outstanding repayment obligation of the SFPUC evidenced by the Revolving Notes would bear interest at substantially increased interest rates and (b) the bank could declare all amounts outstanding under the Revolving Notes to be immediately due and payable. The Revolving Notes and any payment obligations thereunder are payable from Net Revenues on a basis subordinate to the Bonds.

See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES – Subordinate Debt and Interim Funding Program.”
Excluded Principal and Balloon Indebtedness . The SFPUC may treat debt service on certain Bonds as “Excluded Principal” or “Balloon Indebtedness.” See “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage.” If the SFPUC is unable to pay the principal of such Bonds from the proceeds of additional notes, revenue bonds or other obligations, Net Revenues may not be sufficient to pay debt service on the 2026A Bonds.

Cost of Capital Program Projects; Timely Completion of Capital Program Projects . The completion of various capital program projects could be delayed and the overall cost of such projects could increase for a variety of reasons, including, but not limited to, actions by State or federal regulatory agencies, voter initiatives, legal challenges on environmental or other grounds, prolonged contractor disputes, changes in price of commodities or labor, unanticipated geologic, soil, hydrologic or hydraulic conditions, the occurrence of an earthquake or other natural disaster, or the occurrence of a worldwide health concern such as the COVID -19 pandemic. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – WASTEWATER ENTERPRISE CAPITAL PROGRAM.”
The SFPUC intends to finance the continued development and implementation of capital program projects using proceeds of certain Outstanding Bonds (including draws under the existing WIFIA Loan Agreements) and

25 draws under the existing SRF loan documents, as well as through the issuance of Additional Bonds and Parity Loans (such as additional SRF loans or WIFIA loans). If capital program projects are completed at the cost and on the schedule presently under consideration by the SFPUC, the cost of such projects will require a significant planned increase in the amount of debt payable from Revenues, which will result in significant planned rate increases.

Correspondingly, debt service coverage for the Bonds will also be significantly lower than it is currently. Were capital program projects delayed or the cost of capital program projects to increase without an offsetting reduction in the program scope, the SFPUC would be required either to incur more debt payable from Revenues or to cash fund those costs from Revenues. Either option would likely increase rates payable by SFPUC customers to levels higher than presently anticipated by the SFPUC, and could result in lower debt service coverage ratios than presently anticipated by the SFPUC. See “APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM” and “ — OBLIGATIONS PAYABLE FROM NET REVENUES – Water Infrastructure Finance and Innovation Act Loans.” Over the next several years the SFPUC expects to issue Additional Bonds and Parity Loans to fund development and implementation of Wastewater Enterprise capital projects. The issuance by the SFPUC of such debt is subject to various approval requirements. See “ APPENDIX A – THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – OBLIGATIONS PAYABLE FROM NET REVENUES.”
The ability of the SFPUC to issue Additional Bonds and Parity Loans to finance the development and implementation of capital program projects may also be adversely affected by any adverse change in the financial position of the SFPUC or by general market conditions. There can be no assurance that the SFPUC will be able to issue Additional Bonds or Parity Loans in an aggregate amount sufficient to finance all of the costs of completing the capital program projects.

Inverse Condemnation. Under the doctrine of inverse condemnation (a legal concept that entitles property owners to just compensation if their private property is damaged by a public use), California courts have imposed liability on public agencies in legal actions brought by private property holders for damages caused by such public agencies’ infrastructure. In City of Oroville v. Superior Court of Butte County , 7 Cal. 5th 1091 (2019), however, the California Supreme Court held that damage to private property must be substantially caused by an inherent risk presented by the deliberate design, construction or maintenance of the public improvement. Thus, if the inherent risks associated with the SFPUC’s facilities, including wastewater and stormwater collection facilities (other than flood control projects), as deliberately designed, constructed or maintained, are determined to be the substantial cause of damage to private property from flooding, sewage back- up or otherwise, and the doctrine of inverse condemnation applies, the SFPUC could be liable for direct and indirect property damage to private parties and such liability, in the aggregate, could be substantial. In addition to such claims for property damage, the SFPUC could also be liable for punitive damages and other damages under other theories of liability, including if the SFPUC were found to have acted unreasonably or to have been negligent, which liability, in the aggregate, could be substantial.

Bankruptcy Risk
The SFPUC, being an enterprise department of the City, likely cannot itself file for bankruptcy. While an involuntary bankruptcy petition cannot be filed against the City, the City is only authorized to file for bankruptcy under certain circumstances. Should the City file for bankruptcy, there could be adverse effects on the holders of the 2026A Bonds.

To the extent that Revenues are “special revenues” under the United States Bankruptcy Code (the “Bankruptcy Code”), the Revenues collected after the date of the bankruptcy filing should be subject to the lien of the Indenture. If any or all of the Revenues are determined not to be “special revenues,” then any such amounts collected after the commencement of the bankruptcy case will likely not be subject to the lien of the Indenture. “Special revenues” are defined to include revenues derived from the ownership or operation of projects or systems that are primarily used to provide utility services. No a ssurance can be given that a court would hold that any or all Revenues are special revenues. In a case arising from the insolvency proceedings of Puerto Rico, the United States Court of Appeals for the First Circuit concluded that while a debtor has the right to voluntarily apply special revenues to the payment of debt service during the pendency of a bankruptcy case, the debtor is not obligated to do

26 so, even though the special revenues are subject to the lien of the bond documents. The holders of the 2026A Bonds may not be able to assert a claim against any property of the City other than the Net Revenues, and if any or all of the Revenues are no longer subject to the lien of the Indenture, then there may be limited, if any, funds from which the holders of the 2026A Bonds are entitled to be paid.

The Bankruptcy Code provides that “special revenues” can be applied to necessary operating expenses of the project or system, before they are applied to other obligations. This rule applies regardless of the provisions of the transaction documents. It is not clear precisely which expenses would constitute necessary operating expenses, and any definition in the transaction documents may not be applicable.

If the City is in bankruptcy, the parties (including the Trustee and the holders of the 2026A Bonds) may be prohibited from taking any action to collect any amount from the City or to enforce any obligation of the City, unless the permission of the bankruptcy court is obtained. These restrictions may also prevent the Trustee from making payments to the holders of the 2026A Bonds from funds in the Trustee’s possession. The rate covenants (see “SECURITY FOR THE BONDS – Rate Covenants”) may not be enforceable in bankruptcy by the Trustee or the holders of the 2026A Bonds.

Revenues are deposited with and held by the City Treasurer and may be commingled with other City funds.

See “SECURITY FOR THE BONDS – Flow of Funds.” If the City is in bankruptcy, the City may not be required to turn over to the Trustee any Revenues that are in its possession at the time of the bankruptcy filing or come into its possession after the bankruptcy filing. In addition, if the City has possession of Revenues (whether collected before or after commencement of the bankruptcy) and if the City does not voluntarily turn over such Revenues to the Trustee, it is not entirely clear what procedures the Trustee and the holders of the 2026A Bonds would have to follow to attempt to obtain possession of such Revenues, how much time it would take for such procedures to be completed, or whether such procedures would ultimately be successful. The United States Court of Appeals for the First Circuit, in another case involving the insolvency proceedings of Puerto Rico, concluded that a bankruptcy court does not have the power to order a debtor such as the City to comply with state law.

The City may be able to borrow additional money that is secured by a lien on any of its property (including the Revenues), which lien could have priority over the lien of the Indenture, or to cause some of the Revenues to be released to it, free and clear of the lien of the Indenture, in each case as long as the bankruptcy court determines that the rights of the Trustee and the holders of the 2026A Bonds will be adequately protected.

If the City is in bankruptcy, it may be able, without the consent and over the objection of the Trustee and the holders of the 2026A Bonds, to alter the priority, interest rate, principal amount, payment terms, collateral, maturity dates, payment sources, covenants (including tax -related covenants and the rate covenant), and other terms or provisions of the Indenture and the 2026A Bonds, as long as the bankruptcy court determines that the alterations are fair and equitable.

There may be delays in payments on the 2026A Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the City that could result in delays or reductions in payments on the 2026A Bonds, or result in losses to the holders of the 2026A Bonds. Regardless of any specific adverse determinations in a City bankruptcy proceeding, the fact of a City bankruptcy proceeding could have an adverse effect on the liquidity and value of the 2026A Bonds.

The SFPUC invests Revenues in the City’s Pooled Investment Fund. See “ APPENDIX A – THE PUBLIC

UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – FINANCIAL OPERATIONS – Investment of SFPUC Funds.” In the event of a bankruptcy of the City, there may be delays or reductions in payments on the 2026A Bonds.

Other Risks
Federal Policy Risks . Federal policies involving taxation, appropriations, borrowing (including the debt ceiling), trade (including tariffs), immigration, climate change, clean energy and other topics can shift, sometimes dramatically, from one presidential administration or Congress to another. From time to time, such shifts can result

27 in reductions to the level of federal funding for a variety of policy priorities, including transportation, housing, healthcare, social services and other federally funded programs. Recently, several such policy shifts, including delays in or cancellation of grants , loans, and other appropriations, have been proposed or promulgated through presidential executive orders and other official and unofficial actions at the federal level. The SFPUC cannot predict the outcome of such proposals and other actions, nor the potential impacts of any future such changes in federal policy. However, such changes could in the future have adverse effects on revenues, operation and maintenance costs or capital funding requirements.

The SFPUC depends on the work of various federal agencies to conduct its operations. For example, the SFPUC relies, in part, on the National Oceanic and Atmospheric Administration (“ NOAA”), which includes the National Weather Service, for information regarding daily weather forecasts, severe storm warnings, climate monitoring, and long- term climate projections. The SFPUC also relies on the USEPA for regulatory compliance guidance, water quality standards and testing protocols, infrastructure funding through various federal funding programs, and support during environmental emergencies. In addition, the SFPUC relies on the National Park Service to manage Yosemite National Park, where the Hetch Hetchy Reservoir and substantial portions of the SFPUC’s Regional Water System infrastructure are located, including watershed protection, facility maintenance access, and security. Recently, the federal government has begun conducting large- scale layoffs across federal agencies, including but not limited to layoffs at NOAA, the USEPA and the National Park Service. The SFPUC cannot predict the potential impacts of such layoffs; however, such actions could have adverse effects on the SFPUC’s operations.

Federal Legislation . Legislation is periodically introduced in the U.S. Congress that could affect the finances or operations of the SFPUC. Examples of federal legislative proposals that could have an adverse effect on the SFPUC if they were to be introduced and become law include, but are not limited to limitations on the amount or availability of tax-exempt financing under Section 103 of the Code or elimination of the exclusion of interest on tax- exempt bonds from gross income for all or some taxpayers. Legislative proposals to eliminate or limit the benefit of tax-exempt interest on bonds such as the 2026A Bonds have been made in the past, may currently be under consideration, and may be made again in the future. If adopted, any such proposal could alter the federal tax treatment described under the heading “TAX MATTERS” or could adversely affect the market value or marketability of the 2026A Bonds. The SFPUC cannot predict whether any such legislation will be introduced or enacted in the current or future sessions of the U.S. Congress.

Economic, Political, Social and Environmental Conditions . Changes in economic, political, social, or environmental conditions on a local, State, federal, and/or international level may adversely affect investment risk generally. Such conditional changes may include (but are not limited to) fluctuations in business production, consumer prices, fuel prices, or financial markets, unemployment rates, availability of skilled labor, technological advancements, shortages or surpluses in natural resources or energy supplies, changes in law, social unrest, fluctuations in the crime rate, political conflict, acts of war or terrorism, environmental damage, and natural disasters.

Pandemics; COVID-19 Pandemic. A pandemic, epidemic or outbreak of an infectious disease can have significant adverse health and financial impacts on global and local economies. For example, the COVID -19 pandemic significantly impacted the City and resulted in prolonged stay- at-home orders that impacted each of the SFPUC’s enterprises, including the Wastewater Enterprise. In addition to certain direct impacts on the operations and finances of the Wastewater Enterprise, COVID -19 had significant and varied impacts on general economic activity at the local, national and global levels, including supply chain and labor market disruptions. Such disruptions, among other effects, resulted in increases in materials, labor, transportation and other costs across a wide number of sectors, as well as delays in delivery of projects and equipment. The Wastewater Enterprise experienced, and may in the future experience, increases in certain costs, such as for bulk chemical supplies, and delays in the delivery of equipment as a result of COVID -19’s disruption of supply chains. Additionally, such disruptions may result in schedule delays for the Wastewater Enterprise’s capital projects or increased costs for such projects.

Initiative, Referendum and Charter Amendments and Future Legislation . Under the State Constitution, California voters have the ability to initiate legislation and require a public vote on legislation passed by the State Legislature through the powers of initiative and referendum, respectively. The SFPUC is unable to predict whether

28 any such initiatives might be submitted to or approved by the voters, the nature of such initiatives, or their potential impact on the SFPUC or the Wastewater Enterprise. See “APPENDIX A – THE PUBLIC UTILITIES

COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS.”
Under the Charter, San Francisco voters can restrict or revise the powers of the SFPUC through the approval of a Charter amendment or other initiative. For example, in June 1998 the San Francisco electorate approved Proposition H which, subject to certain exceptions, including a limited exception to raise rates to pay debt service on voter-approved debt, froze the SFPUC’s water and sewer rates through July 1, 2006. The SFPUC can give no assurance that the electorate will not seek in the future to freeze or limit rate increases. See “APPENDIX A –

THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – Charter Limitations.”
In addition, the SFPUC is subject to various laws, rules and regulations adopted by the local, State and federal governments and their agencies. The SFPUC is unable to predict the adoption or amendment of any such laws, rules or regulations, or their effect on the operations or financial condition of the SFPUC.

Loss of Tax Exemption/Risk of Tax Audit of Municipal Issuers . As discussed under “TAX MATTERS,” interest on the 2026A Bonds could fail to be excluded from the gross income of the owners thereof for purposes of federal income taxation retroactive to the date of the issuance of the 2026A Bonds as a result of future acts or omissions of the SFPUC in violation of its covenants to comply with requirements of the Code. Should such an event of taxability occur, the 2026A Bonds are not subject to redemption or any increase in interest rate and will remain outstanding until maturity.

The Internal Revenue Service (the “IRS ”) has an expanded program for the auditing of tax- exempt obligations, including both random and targeted audits. It is possible that the 2026A Bonds could be selected for audit by the IRS. It is also possible that the market value of the 2026A Bonds would be affected as a result of such an audit of the 2026A Bonds (or by an audit of similar securities).

Change in Tax Law . As discussed under “TAX MATTERS,” current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2026A Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest.

Failure to Maintain Credit Ratings . Certain rating agencies have assigned ratings to the 2026A Bonds.

The ratings issued reflect only the views of such rating agencies. Any explanation of the significance of these ratings should be obtained from the respective rating agencies. See “RATINGS.” There is no assurance current ratings will continue for any given period or that such ratings will not be revised downward or withdrawn entirely by the rating agencies if, in the respective judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings could be expected to have an adverse effect on the market price or the marketing of the 2026A Bonds. The SFPUC undertakes no obligation to maintain its current credit ratings on the 2026A Bonds or to oppose any such downward revision, suspension or withdrawal.

Secondary Market. There can be no guarantee that there will be a secondary market for the 2026A Bonds or, if a secondary market exists, that the 2026A Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Uncertainties of Projections, Forecasts and Assumptions. Certain information contained in this Official Statement is based upon assumptions and projections. Projections and assumptions are inherently subject to significant uncertainties. Inevitably, some assumptions will not be realized and unanticipated events and circumstances may occur and actual results are likely to differ, perhaps materially, from those projected.

29 Accordingly, such projections are not necessarily indicative of future performance, and the SFPUC assumes no responsibility for the accuracy of such projections. See “FORWARD-LOOKING STATEMENTS.” The discussion in this section, “RISK FACTORS,” is not meant to be a comprehensive or definitive list of the risks associated with an investment in the 2026A Bonds. There may be other risks inherent in ownership of the 2026A Bonds in addition to those described in this section. Investors are advised to read the entire Official Statement in order to obtain information necessary to make an investment in the 2026A Bonds.

Access to Capital Markets
The SFPUC expects that the source of repayment of the principal of the 2026A Bonds will be the proceeds of Take-Out Obligations to be issued by the SFPUC on or prior to the maturity date of the 2026A Bonds. It is possible that the occurrence of an unforeseen circumstance could prevent or delay the SFPUC’s ability to access the capital markets and issue Take- Out Obligations. Such market disruptions may occur in connection with an economic downturn. Discrete and short -term market disruptions are rare, but have occurred in the past as a result of a variety of factors and events, such as the COVID -19 pandemic, terrorist attacks, natural disasters or the failure or dissolution of, or other economic trouble being experienced by, an entity of systemic importance to the financial industry or the economy in general. No assurance can be given that the SFPUC will be able to issue Take -Out Obligations or that the SFPUC will have sufficient funds on hand to pay the principal of the 2026A Bonds on their maturity date. See “PLAN OF FINANCE.”

CERTAIN LEGAL MATTERS
Certain legal matters incident to the authorization, sale and delivery of the 2026A Bonds are subject to the approval of Norton Rose Fulbright US LLP, San Francisco, California, Bond Counsel to the SFPUC. Certain legal matters are being passed upon for the SFPUC by the City Attorney and by Orrick, Herrington & Sutcliffe LLP , San Francisco, California (“Disclosure Counsel ”). Certain legal matters are being passed upon for the Underwriters by Hawkins Delafield & Wood LLP, San Francisco, California. Bond Counsel and Disclosure Counsel will receive compensation that is contingent upon the sale and delivery of the 2026A Bonds.

The form of approving opinion of Bond Counsel is set forth in Appendix D , and will be available at the time of delivery of the 2026A Bonds. Bond Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

Orrick, Herrington & Sutcliffe LLP has served as Disclosure Counsel to the SFPUC and in such capacity has advised the SFPUC with respect to the requirements of applicable securities laws and participated with responsible SFPUC officials and staff in conferences and meetings where information contained in this Official Statement was reviewed for accuracy and completeness. Disclosure Counsel is not responsible for the accuracy or completeness of the information presented in this Official Statement and has not undertaken to independently verify any of such information. Rather, the SFPUC is solely responsible for the accuracy and completeness of the information contained in this Official Statement. Upon the issuance of the 2026A Bonds, Orrick, Herrington & Sutcliffe LLP will deliver a letter to the SFPUC concerning certain matters with respect to this Official Statement.

No purchaser or holder of the 2026A Bonds, or other person or party other than the SFPUC, will be entitled to rely on such letter or on the fact that Orrick, Herrington & Sutcliffe LLP has acted as Disclosure Counsel to the SFPUC.

TAX MATTERS
General. The issuance and delivery of the 2026A Bonds is subject to the delivery of an opinion of Bond Counsel that under existing State of California law, interest on the 2026A Bonds is exempt from personal income taxes imposed by the State of California.

Below is a general summary of the United States federal income tax consequences of the purchase and ownership of the 2026A Bond s. The discussion below is based upon the Code and applicable Treasury Regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly with retroactive effect) or possibly a differing interpretation. No assurance can be given that future changes in the law will not alter the statements herein. The discussion below does not purport to deal with United States federal income tax

30 consequences applicable to all categories of investors. Further, the discussion below does not purport to cover all aspects of United States federal income taxation that may be relevant to a particular investor in the 2026A Bonds in light of the investor’s particular personal investment circumstances or to certain types of investors subject to special treatment under United States federal income tax laws (including insurance companies, tax -exempt organizations, financial institutions, broker -dealers and persons that have hedged the risk of owning the 2026A Bonds). Such discussion is therefore limited to certain issues relating to initial investors that will hold the 2026A Bonds as “capital assets” within the meaning of Section 1221 of the Code, and that acquire such 2026A Bonds for investment and not as a dealer or for resale. Except as specifically discussed below, the discussion below addresses the United States federal income tax consequences applicable only to beneficial owners of the 2026A Bonds that are “United States persons” within the meaning of Section 7701(a)(30) of the Code (“United States persons”) and does not address any consequence to persons other than United States persons. Prospective investors should note that no rulings have been or will be sought from the IRS with respect to any of the U.S. federal income tax consequences discussed herein, and no assurance can be given that the IRS will not take contrary positions. A form of Bond Counsel’s anticipated opinion is included as Appendix D.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS IN DETERMINING

THE FEDERAL, STATE, LOCAL, FOREIGN AND ANY OTHER TAX CONSEQUENCES TO THEM RELATING TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE 2026A BONDS.

Payments of Stated Interest on the 2026A Bonds. The stated interest paid on the 2026A Bonds will be included in the gross income, as defined in Section 61 of the Code, of the beneficial owners of the 2026A Bonds, and will be subject to U.S. federal income taxation when received or accrued, depending on the tax accounting method used by the beneficial owners thereof.

Original Issue Discount. If a substantial amount of the 2026A Bonds of any stated maturity is purchased at original issuance for a purchase price (the “Issue Price”) that is less than their face amount by more than one quarter of one percent times the number of complete years to maturity, the 2026A Bonds of such maturity will be treated as being issued with “original issue discount.” The amount of the original issue discount will equal the excess of the principal amount payable on such 2026A Bonds at maturity over the Issue Price of such 2026A Bonds, and the amount of the original issue discount on the 2026A Bonds will be amortized over the life of the 2026A Bonds using the “constant yield method” provided in the Treasury Regulations. As the original issue discount accrues under the constant yield method, the beneficial owners of the 2026A Bonds, regardless of their regular method of accounting, will be required to include such accrued amount in their gross income as interest. This can result in taxable income to the beneficial owners of the 2026A Bonds that exceeds actual cash distributions to the beneficial owners in a taxable year.

The amount of the original issue discount that accrues on the 2026A Bonds each taxable year will be reported annually to the IRS and to the beneficial owners. The portion of the original issue discount included in each beneficial owner’s gross income while the beneficial owner holds the 2026A Bonds will increase the adjusted tax basis of the 2026A Bonds in the hands of such beneficial owner.

Premium. If a beneficial owner purchases a 2026A Bond for an amount that is greater than its stated redemption price at maturity, such beneficial owner will be considered to have purchased the 2026A Bond with “amortizable bond premium” equal in amount to such excess. A beneficial owner may elect to amortize such premium using a constant yield method over the remaining term of the 2026A Bond and may offset interest otherwise required to be included in respect of the 2026A Bond during any taxable year by the amortized amount of such premium for the taxable year. Bond premium on a 2026A Bond held by a beneficial owner who does not make such an election will decrease the amount of gain or increase the amount of loss otherwise recognized on the sale, exchange, redemption or retirement of a 2026A Bond. However, if the 2026A Bond may be optionally redeemed after the beneficial owner acquires it at a price in excess of its stated redemption price at maturity, special rules would apply under the Treasury Regulations which could result in a deferral of the amortization of some bond premium until later in the term of the 2026A Bond. Any election to amortize bond premium applies to all taxable debt instruments held by the beneficial owner on or after the first day of the first taxable year to which such election applies, and may be revoked only with the consent of the IRS.

31 Medicare Contribution Tax. Pursuant to Section 1411 of the Code, as enacted by the Health Care and Education Reconciliation Act of 2010, an additional tax is imposed on individuals beginning January 1, 2013. The additional tax is 3.8% of the lesser of (i) net investment income (defined as gross income from interest, dividends, net gain from disposition of property not used in a trade or business and certain other listed items of gross income), or (ii) the excess of “modified adjusted gross income” of the individual over $200,000 for unmarried individuals ($250,000 for married couples filing a joint return and a surviving spouse). Holders of the 2026A Bonds should consult their tax advisors concerning this additional tax, as it may apply to interest earned with respect to the 2026A Bonds as well as gain on the sale of a 2026A Bond.

Disposition of Bonds and Market Discount . A beneficial owner of 2026A Bonds will generally recognize gain or loss on the redemption, sale or exchange of 2026A Bonds equal to the difference between the redemption or sales price (exclusive of the amount paid for accrued interest) and the beneficial owner’s adjusted tax basis in the 2026A Bonds. Generally, the beneficial owner’s adjusted tax basis in the 2026A Bonds will be the beneficial owner’s initial cost, increased by the original issue discount previously included in the beneficial owner’s income to the date of disposition. Any gain or loss generally will be capital gain or loss and will be long- term or short -term, depending on the beneficial owner’s holding period for the 2026A Bonds.

Under current law, a purchaser of 2026A Bonds who did not purchase the 2026A Bonds in the initial public offering (a “ subsequent purchaser ”) generally will be required, on the disposition (or earlier partial principal payment) of the 2026A Bonds, to recognize as ordinary income a portion of the gain, if any, to the extent of the accrued “market discount.” In general, market discount is the amount by which the price paid for the 2026A Bonds by a subsequent purchaser is less than the sum of Issue Price and the amount of original issue discount previously accrued on the 2026A Bonds. The Code also limits the deductibility of interest incurred by a subsequent purchaser on funds borrowed to acquire 2026A Bonds with market discount. As an alternative to the inclusion of market discount in income upon disposition, a subsequent purchaser may elect to include market discount in income currently as it accrues on all market discount instruments acquired by the subsequent purchaser in that taxable year or thereafter, in which case the interest deferral rule will not apply. The re- characterization of gain as ordinary income on a subsequent disposition of 2026A Bonds could have a material effect on the market value of the 2026A Bonds.

Legal Defeasance. If the Commission elects to defease the 2026A Bonds by depositing in escrow sufficient cash and/or obligations to pay when due outstanding 2026A Bonds (a “legal defeasance”), under current tax law, a beneficial owner of 2026A Bonds may be deemed to have sold or exchanged its 2026A Bonds. In the event of such a legal defeasance, a beneficial owner of 2026A Bonds generally would recognize gain or loss in the manner described above. Ownership of the 2026A Bonds after a deemed sale or exchange as a result of a legal defeasance may have tax consequences different from those described above, and each beneficial owner should consult its own tax advisor regarding the consequences to such beneficial owner of a legal defeasance of the 2026A Bonds.

Backup Withholding. Under Section 3406 of the Code, a beneficial owner of the 2026A Bonds that is a United States person may, under certain circumstances, be subject to “backup withholding” on payments of current or accrued interest on the 2026A Bonds or with respect to proceeds received from the disposition of the 2026A Bonds. This withholding applies if such beneficial owner of 2026A Bonds: (i) fails to furnish to the payor such beneficial owner’s social security number or other taxpayer identification number (“ TIN”); (ii) furnishes the payor an incorrect TIN; (iii) fails to properly report interest, dividends or other “reportable payments” as defined in the Code; or (iv) under certain circumstances, fails to provide the payor with a certified statement, signed under penalty of perjury, that the TIN provided to the payor is correct and that such beneficial owner is not subject to backup withholding.

Backup withholding will not apply to beneficial owners that are corporations or that fall within certain categories and (if and when required) demonstrate that fact. Beneficial owners of the 2026A Bonds should consult their own tax advisors regarding their qualification for exemption from backup withholding and the procedures for obtaining such exemption. The backup withholding tax is not an additional tax, and taxpayers may use amounts withheld as a credit against their federal income tax liability or may claim a refund as long as they timely provide certain information to the Service.

32 Withholding on Payments to Nonresident Alien Individuals and Foreign Corporations . Under Sections 1441 and 1442 of the Code, nonresident alien individuals and foreign corporations are generally subject to withholding at the rate of 30% on periodic income items arising from sources within the United States, provided that such income is not “effectively connected” with the conduct of a United States trade or business, within the meaning of Section 864 of the Code. Where interest on the 2026A Bonds received by nonresident aliens and foreign corporations is not treated as effectively connected income, such interest will be subject to 30% withholding, or any lower rate specified in an income tax treaty, unless such income is treated as “portfolio interest” within the meaning of Sections 871 and 881 of the Code. Interest will be treated as portfolio interest under such sections if: (i) the beneficial owner provides a statement to the payor certifying, under penalties of perjury, that such beneficial owner is not a United States person, and provides the name and address of such beneficial owner; (ii) such interest is treated as not effectively connected with the beneficial owner’s United States trade or business; (iii) interest payments are not made to a person within a foreign country that the IRS has included on a list of countries having provisions inadequate to prevent United States tax evasion; (iv) interest payable on the 2026A Bonds is not deemed contingent interest within the meaning of the portfolio debt provision; (v) such beneficial owner is not a controlled foreign corporation, within the meaning of Section 957 of the Code; and (vi) such beneficial owner is not a bank receiving interest with respect to the 2026A Bonds pursuant to a loan agreement entered into in the ordinary course of the bank’s trade or business.

Assuming payments with respect to the 2026A Bonds are treated as portfolio interest within the meaning of Sections 871 and 881 of the Code, no backup withholding under Section 1441 and 1442 of the Code and no backup withholding under Section 3406 of the Code will be required with respect to beneficial owners or intermediaries that have furnished Form W -8BEN, Form W -8BEN-E, Form W -8EXP or Form W -8IMY , as applicable, provided the payor does not have actual knowledge or reason to know that such person is a United States person.

Foreign Account Tax Compliance Act . Sections 1471 through 1474 of the Code impose a 30% withholding tax on certain types of payments made to a foreign financial institution, unless the foreign financial institution enters into an agreement with the U.S. Treasury to, among other things, undertake to identify accounts held by certain United States persons or U.S. -owned entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose actions prevent the foreign financial institution from complying with these and other reporting requirements, or unless the foreign financial institution is otherwise exempt from those requirements. In addition, the Foreign Account Tax Compliance Act (“ FATCA”) imposes a 30% withholding tax on the same types of payments to a non- financial foreign entity unless the entity certifies that it does not have any substantial U.S. owners or the entity furnishes identifying information regarding each substantial United States owner. Failure to comply with the additional certification, information reporting and other specified requirements imposed under FATCA could result in the 30% withholding tax being imposed on payments of the interest on and principal of the 2026A Bonds and sales proceeds of 2026A Bonds held by or through a foreign entity.

In general, withholding under FATCA currently applies to payments of U.S. source interest (including OID) and will apply to “foreign passthru payments” but no earlier than two years after the date of publication of final regulations defining the term “foreign passthru payment.” Prospective investors should consult their own tax advisors regarding FATCA and its effect on them.

Reporting of Interest Payments. Subject to certain exceptions, interest payments made to beneficial owners of the 2026A Bonds will be reported to the IRS. Such information will be filed each year with the IRS on Form 1099-INT (or other appropriate reporting form), which will reflect the name, address and TIN of the beneficial owner. A copy of Form 1099 will be sent to each beneficial owner of a 2026A Bond for U.S. federal income tax purposes.

Proposed Form of Opinion. The proposed form of opinion of Bond Counsel regarding the 2026A Bonds is attached in APPENDIX D.

The preceding discussion of certain United States federal income tax consequences is for general information only and is not tax advice. Accordingly, each investor should consult with its own tax advisor as to particular tax consequences to it of purchasing, owning and disposing of the 2026A Bonds, including the applicability and effect of any state, local or foreign tax law, and of any proposed change in applicable law.

33 LITIGATION
The SFPUC is not aware of any litigation, pending or threatened, questioning the political existence of the City or the SFPUC or contesting the SFPUC’s power to fix wastewater rates and charges, or in any way questioning or affecting:
(i) the proceedings under which the 2026A Bonds are to be issued; (ii) the validity of any provision of the 2026A Bonds or the Indenture; (iii) the pledge of Net Revenues by the SFPUC under the Indenture; or (iv) the titles to office of the present members of the Board of Supervisors and the Commission.

There are several suits and claims pending against the City and the SFPUC impacting the Wastewater Enterprise, which may include personal injury, wrongful death and other suits and claims against which the City may self-insure. The aggregate amount of the self -insured liabilities of the City and the SFPUC which may result from such suits and claims if determined adversely to the City or the SFPUC will not, in the opinion of the City Attorney, materially impair the ability of the SFPUC to pay principal of or interest on the 2026A Bonds as they become due. Other than as disclosed elsewhere in this Official Statement, there is no litigation pending, with service of process having been accomplished, against the City or the SFPUC which if determined adversely to the City or the SFPUC would, in the opinion of the City Attorney, materially impair the ability of the SFPUC to pay principal of and interest on the 2026A Bonds as they become due. See also “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operation s – Natural and Man- Made Disasters” and “APPENDIX A – THE PUBLIC

UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND THE WASTEWATER ENTERPRISE – REGULATORY MATTERS – Federal and State Clean Water Act Permits” and “— CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – State Law Limitations – Proposition 218 Litigation.”

RATINGS
Moody’s Investors Service ( “Moody’s”) has assigned a long -term municipal bond rating of “ ___” to the 2026A Bonds. S&P Global Ratings, a division of Standard & Poor ’s Financial Services LLC ( “S&P”), has assigned a long-term municipal bond rating of “___” to the 2026A Bonds.

The ratings assigned by Moody’ s and S&P express only the views of the respective rating agencies. The explanation of the significance of these ratings, and any outlook associated with these ratings, may be obtained from Moody’s and S&P, respectively. Each rating agency generally bases its rating on its own investigations, studies, and assumptions. The SFPUC has provided certain additional information and materials to the rating agencies (some of which does not appear in this Official Statement).

A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2026A Bonds. The SFPUC undertakes no responsibility to maintain its current ratings on the 2026A Bonds or to oppose any such downward revision, suspension or withdrawal.

UNDERWRITING
The 2026A Bonds are being purchased by Morgan Stanley & Co. LLC , on behalf of itself , RBC Capital Markets LLC , Cabrera Capital Markets LLC , and Wells Fargo Bank, National Association (collectively, the “Underwriters”).

34 The Underwriters have agreed to purchase from the SFPUC the 2026A Bonds at a purchase price of $__________ (consisting of $ __________ aggregate principal amount of the 2026A Bonds, [less/plus] an original issue [discount/premium] of $__________, less an underwriters’ discount of $__________) . Under the bond purchase contract to be entered into in connection with the purchase of the 2026A Bonds, the Underwriter s will be obligated to purchase all of the 2026A Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions to be satisfied by the SFPUC.

The Underwriters have certified the reoffering prices with respect to the 2026A Bonds set forth on the inside cover page of this Official Statement. The SFPUC takes no responsibility for the accuracy of these prices. The Underwriters may offer and sell the 2026A Bonds to certain dealers and others at prices lower than the offering prices stated on the inside cover page. The offering prices may be changed from time to time by the Underwriters .

The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the SFPUC for which they received or will receive customary fees.

In the ordinary course of their various business activities, the Underwriter s and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the SFPUC.

Morgan Stanley & Co. LLC, one of the Underwriters of the 2026A Bonds, has entered into a retail distribution arrangement with its affiliate Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its selling efforts with respect to the 2026A Bonds.

RBC Capital Markets, LLC, one of the Underwriters of the 2026A Bonds, has entered into a distribution arrangement with its affiliate RBC Securities, Inc. (RBC Securities) (formerly known as City National Securities, Inc). As part of this arrangement, RBCCM may distribute municipal securities to investors through the financial advisor network of RBC Securities. As part of this arrangement, RBCCM may compensate RBC Securities for its selling efforts with respect to the 2026A Bonds.

FINANCIAL STATEMENTS
Attached as Appendix B are the audited financial statements of the Wastewater Enterprise for Fiscal Years 2024-25 and 2023-24, prepared by the SFPUC. The audited financial statements for Fiscal Years 2024 -25 and 2023- 24 were audited by Macias Gini & O’Connell LLP, independent certified public accountants. These audited financial statements are included for convenience.

The audited financial statements of the SFPUC are public documents and the SFPUC has not requested nor did the SFPUC obtain permission from the auditors to include the audited financial statements as an Appendix to this Official Statement. Accordingly, the auditors have made no representation in connection with inclusion of the audited financial statements herein that there has been no material change in the financial condition of the SFPUC since the most recent audit was concluded. The auditors have not been engaged to perform and have not performed, since the date of the report included herein, any procedures on the financial statements addressed in that report. The auditors also have not performed any procedures relating to this Official Statement.

CONTINUING DISCLOSURE
The SFPUC will covenant for the benefit of the Owners and Beneficial Owners of the 2026A Bonds, under a continuing disclosure certificate dated as of the date of delivery (the “ Disclosure Certificate”), to provide certain

35 financial information and operating data regarding the Wastewater Enterprise (the “Annual Report”) not later than March 31 following the end of its Fiscal Year (presently June 30), beginning on March 31, 2027 , with the report for Fiscal Year 2025-26, and to promptly provide notices of the occurrence of certain enumerated events set forth in the Disclosure Certificate (“Listed Events”).

The SFPUC will agree to file the Annual Report and any notice of Listed Events as described in the Disclosure Certificate. The specific nature of the information to be contained in the Annual Report or the notices of Listed Events is set forth in the Disclosure Certificate. These covenants have been made to assist the Underwriters in complying with the Rule. The form of the Disclosure Certificate is attached to this Official Statement as APPENDIX E.

In 2017, the SFPUC and U.S. Bank National Association ( “U.S. Bank ”) entered into revolving credit agreements providing for the extension of credit to the SFPUC in the amount of $100,000,000 for the Water Enterprise and $75,000,000 for the Wastewater Enterprise. The SFPUC has not drawn on either credit facility and has no outstanding obligations thereunder. On January 7, 2022, the SFPUC and U.S. Bank entered into amendments to such credit facilities extending the respective commitment expiration dates to July 18, 2024. The SFPUC filed listed event notices regarding such extensions on February 3, 2022.

CO-MUNICIPAL ADVISORS
Montague DeRose and Associates, LLC, Walnut Creek, California, and Backstrom McCarley Berry & Co., LLC, San Francisco, California (the “ Co-Municipal Advisors”), are acting as co -municipal advisors to the SFPUC with respect to the 2026A Bonds. The Co-Municipal Advisors have assisted the SFPUC in the preparation of this Official Statement and in other matters relating to the planning, structuring, execution and delivery of the 2026A Bonds. The Co-Municipal Advisors have not independently verified any of the data contained herein or conducted a detailed investigation of the affairs of the SFPUC to determine the accuracy or completeness of this Official Statement. Because of its limited participation, the Co-Municipal Advisors assume no responsibility for the accuracy or completeness of any of the information contained herein. The Co-Municipal Advisors will not purchase or make a market in any of the 2026A Bonds.

The compensation to be received by the Co- Municipal Advisors from the SFPUC for services provided in connection with the planning, structuring, execution and delivery of the 2026A Bonds is contingent upon the sale and delivery of the 2026A Bonds.

INDEPENDENT PRICING CONSULTANT
PFM Financial Advisors LLC , San Francisco, California, is acting as an independent pricing consultant to the SFPUC with respect to the 2026A Bonds (the “Pricing Consultant”). As required by the SFPUC’s Debt Policies (as defined in Appendix A hereto) , the Pricing Consultant will monitor the pricing process and provide an independent pricing report to the SFPUC certifying whether the pricing results were fair and reasonable to the SFPUC in light of prevailing market conditions. The Pricing Consultant has not independently verified any of the data contained herein or conducted a detailed investigation of the affairs of the SFPUC to determine the accuracy or completeness of this Official Statement. Because of its limited participation, the Pricing Consultant assumes no responsibility for the accuracy or completeness of any of the information contained herein. The Pricing Consultant will not purchase or make a market in any of the 2026A Bonds.

The compensation to be received by the Pricing Consultant from the SFPUC for services provided in connection with the planning, structuring, execution and delivery of the 2026A Bonds is contingent upon the sale and delivery of the 2026A Bonds.

MISCELLANEOUS
References made in this Official Statement to certain documents and reports are brief summaries thereof that do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof.

36 The appendices to this Official Statement are integral parts of this Official Statement. Investors must read the entire Official Statement, including the appendices, to obtain information essential to making an informed investment decision.
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37 APPROV AL AND EXECUTION
This Official Statement has been duly approved, executed and delivered by the SFPUC.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

By:

General Manager

APPENDIX A

THE PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO AND

THE WASTEWATER ENTERPRISE

Table of Contents

INTRODUCTION .......................................................... A-1

SFPUC WASTEWATER ENTERPRISE AND MAJOR
FACILITIES ........................................................ A-1 THE PUBLIC UTILITIES COMMISSION ................... A-3 General ....................................................................... A-3 Organization, Purposes and Powers ........................... A-3 Commission Members ............................................... A-4 Management ............................................................... A-5 Employee Relations ................................................... A-6 Employee Benefit Plans ............................................. A-9 THE WASTEWA TER ENTERPRISE ........................... A-12 Background and History .......................................... A-12 Service Area ............................................................. A-12 Customer Base ......................................................... A-13 Combined Sewage and Stormwater System ............. A-14 Wastewater Treatment .............................................. A-16 System Capacity ....................................................... A-19 Current System Demands ......................................... A-19 Projected Future Demand ......................................... A-20 Cybersecurity ........................................................... A-20 Climate Change ........................................................ A-21 Climate Action Plan ................................................. A-24 The SFPUC’s Environmental Commitment ............. A-25 REGULATORY MATTERS ......................................... A-25 History and Background .......................................... A-25 Federal and State Clean Water Act Permits .............. A-25 Combined Sewer Overflow Control Policy .............. A-27 Stormwater Regulations ........................................... A-27 Regulatory Trends .................................................... A-27 Other Regulatory Agencies with Jurisdiction Over the
Wastewater Enterprise ................................... A-29 Other Laws Affecting the Wastewater Enterprise ..... A-30 WASTEWATER ENTERPRISE CAPITAL PROGRAMA-30
Capital and Financial Planning Process ................... A-30 Sewer System Improvement Program ...................... A-30 Treasure Island Capital Improvements ..................... A-34 Wastewater Facilities and Infrastructure .................. A-35 Renewal and Replacement ....................................... A-35 Environmental Planning Considerations .................. A-36

FINANCING PLAN FOR WASTEWATER
ENTERPRISE CAPITAL PROGRAM ............. A-36
Long Term Financing of Capital Program ............... A-36 Interim Funding Program Facilities ......................... A-37 Sources and Uses of Funding the Capital Program .. A-37 Revenue Bond Oversight Committee; Audit of Bond
Expenditures ................................................. A-39 OBLIGATIONS PAYABLE FROM NET REVENUES A-40
Authority for Issuance of Revenue Bonds and Other
Obligations Payable from Net Revenues ...... A-40
Outstanding Parity Revenue Bonds ......................... A-41 Additional Bonds ..................................................... A-42 Parity Loans ............................................................. A-42 Water Infrastructure Finance and Innovation Act
Loans ............................................................ A-44 Subordinate Debt and Interim Funding Program ..... A-46 Other Subordinate Obligations Payable from Net
Revenues ...................................................... A-47 Contingent Payment Obligations ............................. A-48 FINANCIAL OPERATIONS ....................................... A-48 General .................................................................... A-48 Wastewater Enterprise Rate Setting ......................... A-48 Wastewater Enterprise Rates and Charges ............... A-50 Revenues ................................................................. A-58 Recent Factors Impacting Wastewater Revenues ..... A-62 Operating and Maintenance Expenses ..................... A-63 Financial Management Policies ............................... A-64 Risk Management and Insurance ............................. A-65 Investment of SFPUC Funds ................................... A-66 HISTORICAL OPERATING RESULTS...................... A-67 Summary of Historical Operating Results and Debt
Service Coverage .......................................... A-67 PROJECTED OPERATING RESULTS ....................... A-70 Assumptions Used in Projections ............................ A-71

CONSTITUTIONAL, STATUTORY AND CHARTER
LIMITATIONS .................................................. A-73 State Law Limitations .............................................. A-73 Initiative and Referendum ....................................... A-76 Charter Limitations .................................................. A-76 Future Charter Amendments .................................... A-76 THE CITY AND COUNTY OF SAN FRANCISCO ... A-76

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INTRODUCTION
This Appendix A to the Official Statement contains information concerning the Public Utilities Commission of the City and County of San Francisco (the “ SFPUC”). Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. Capitalized terms used but not otherwise defined in this Appendix A shall have the meaning given in the forepart of this Official Statement.

SFPUC WASTEWATER ENTERPRISE AND MAJOR FACILITIES

Figure 1-1 – SFPUC Wastewater Enterprise and Major Facilities (Not to Scale) The SFPUC Wastewater Enterprise operates and maintains the City’s combined sewer system, which collects and treats both sewage and stormwater. The map in Figure 1 -1 shows the location of key facilities (as described below) owned by the City and under the jurisdiction of the SFPUC and the urban watershed boundaries which encompass the major drainage areas of San Francisco.

The system consists of approximately 1,000 miles of main sewer lines that collect sanitary sewage from homes and businesses and stormwater runoff; large transport/storage structures; more than 30 pump stations that transport sewage and stormwater; and two all -weather treatment facilities and one wet -weather treatment facility that discharge treated flows into the San Francisco Bay and Pacific Ocean. San Francisco has eight distinct urban watersheds: five on the Bayside (North Shore; Channel; Islais; Sunnyda le; and Yosemite) and three on the Westside (Richmond; Sunset; and Lake Merced). The all -weather treatment facilities and wet -weather treatment facility treat sewage and stormwater based on whether the collection point is located on the Bayside or the Westside. The

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Oceanside Water Pollution Control Plant is not connected to the Bayside treatment systems, and the Southeast Water Pollution Control Plant and North Point Wet Weather Facility are not connected to the Westside treatment system.

See “THE WASTEWATER ENTERPRISE.”
The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or of the SFPUC or any of its income or receipts, except the Net Revenues of the Wastewater Enterprise. See “SECURITY FOR THE BONDS” in the forepart of this Official Statement.

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THE PUBLIC UTILITIES COMMISSION
General
The SFPUC is a department of the City responsible for the maintenance, operation and development of three utility enterprises: the Wastewater Enterprise, the Water Enterprise and the Power Enterprise (which is a component of Hetch Hetchy Water and Power). The SFPUC’s enterprises are operated and managed as separate financial entities with separate enterprise funds.
• The Wastewater Enterprise provides wastewater and stormwater collection, treatment and disposal services for San Francisco.
• The Water Enterprise provides drinking water to retail customers in San Francisco, to certain retail customers outside San Francisco and to wholesale customers in three other Bay Area counties (the “Water Enterprise”).
• Hetch Hetchy Water and Power operates dams (including O’Shaughnessy Dam), reservoirs (including Hetch Hetchy Reservoir), hydroelectric generation and transmission facilities and water transmission facilities from Hetch Hetchy Valley to the connection with the Water Enterprise (collectively, the “Hetch Hetchy Project ”). In addition, Hetch Hetchy Water and Power provides hydroelectric, solar and other power for municipal and public infrastructure, services and facilities (the “ Power Enterprise”). CleanPowerSF, managed by the Power Enterprise, is a Community Choice Aggregation program (“CleanPowerSF”).

The revenues of the Water Enterprise, the Power Enterprise and CleanPowerSF are not available for payment of the principal of, premium, if any, or interest on the Bonds. See “SECURITY FOR THE BONDS – Pledge of Net Revenues” in the forepart of this Official Statement.

Organization, Purposes and Powers
Wastewater Enterprise . The Wastewater Enterprise’s collection and treatment system consists of a combined sewer collection system conveying sewage and stormwater flows within San Francisco to two all-weather treatment facilities and one wet -weather treatment facility located within San Francisco. Treated effluent flows are then discharged through mostly deep- water outfalls into the San Francisco Bay and the Pacific Ocean. The Wastewater Enterprise also currently provides sewage treatment service on Treasure Island pursuant to contract. See “THE WASTEWATER ENTERPRISE.”
Water Enterprise. The SFPUC serves as the retail water supplier for San Francisco and is responsible for water deliveries to residents and institutions within San Francisco city limits, as well as to a number of retail accounts outside of San Francisco city limits. In addition, the SFPUC sells water to 27 wholesale customer entities in San Mateo, Alameda and Santa Clara counties under its Water Supply Agreement and/or related individual contractual agreements, as applicable. On average, approximately 70% of the SFPUC’s water supply is delivered to the wholesale customers and approximately 30% of the SFPUC’s water supply is delivered to retail customers.

The revenues of the Water Enterprise are not “Revenues” under the Indenture and do not secure the payment of the principal of, premium, if any, or interest on the Bonds. See “SECURITY FOR THE BONDS - Pledge of Net Revenues” in the forepart of this Official Statement.

Hetch Hetchy – Water and Power Operations . Hetch Hetchy Water and Power operates the dams (among them O’Shaughnessy Dam being the largest), reservoirs (among them Hetch Hetchy Reservoir being the largest), hydroelectric generation and transmission facilities and water transmission facilities from Hetch Hetchy Valley to the connection with the Water Enterprise, which provides water for distribution through the Water Enterprise and hydroelectric, solar and other power for municipal and public infrastructure, services and facilities of San Francisco.

The Power Enterprise was created in 2005 as a separate system within Hetch Hetchy Water and Power. The Power Enterprise provides electric power to meet the municipal requirements of the City, including power to operate

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municipal streetcars and electric buses, street and traffic lights, municipal buildings and other City facilities, including the San Francisco International Airport (“ SFO”). Additionally, the Power Enterprise may provide power to the Modesto Irrigation District and Turlock Irrigation District, located in the central valley of California, to certain commercial customers consistent with prescribed contractual obligations and federal law and to certain retail customers in San Francisco. CleanPowerSF, managed by the Power Enterprise, is a Community Choice Aggregation program, pursuant to which the SFPUC pools the electricity demands of CleanPowerSF customers, including certain of San Francisco’s residents and businesses, for the purpose of buying electricity on behalf of such customers.

CleanPowerSF provides San Francisco with clean energy alternatives at competitive rates.

In September 2019, in connection with the bankruptcy of Pacific Gas & Electric Company (“ PG&E”) and PG&E Corporation, the City submitted a non -binding indication of interest to purchase substantially all of PG&E’s electric distribution and transmission assets needed to provide retail electric service to all electricity customers within the geographic boundaries of San Francisco. The City subsequently submitted an additional non- binding indication of interest to PG&E in September 2020. PG&E has not indicated a willingness to sell any such assets. In July 2021, the City submitted a petition to the California Public Utilities Commission (“ CPUC”) for a formal determination of the fair market value of PG&E’s assets the City is interested in acquiring. In April 2023, the City filed direct testimony of four expert witnesses with the CPUC regarding the specific assets under consideration for acquisition and the value of such assets. In April 2026, the City filed updated testimony including an asset value of $3.4 billion, supported by a final detailed accounting of such assets, and the CPUC has given PG&E until October 2026 to respond with its own appraisal. The City remains interested in acquiring these assets from PG&E; however, a transaction has not been consummated, and neither the SFPUC nor the City are able to predict whether a transaction will be consummated or what the terms of any such transaction would be, if consummated.

The revenues of the Power Enterprise and the revenues of CleanPowerSF are not “Revenues” under the Indenture and do not secure the payment of the principal of, premium, if any, or interest on the Bonds. See “SECURITY FOR THE BONDS – Pledge of Net Revenues” in the forepart of this Official Statement.

Commission Members
Under the Charter, the SFPUC is given exclusive charge of the operation and management of all water, wastewater and energy supplies and utilities owned or maintained by the City, as well as the real, personal and financial assets under the SFPUC’s jurisdiction. The SFPUC is governed by the Commission.

The Commission consists of five members appointed by the Mayor, subject to confirmation by a majority of the Board of Supervisors. Seat 1 is designated for a member with experience in environmental policy and an understanding of environmental justice issues. Seat 2 is designated for a member with experience in ratepayer or consumer advocacy. Seat 3 is designated for a member with experience in project finance. Seat 4 is designated for a member with expertise in water systems, power systems, or public utility management. Seat 5 is designated for an at-large member. Members are appointed for four -year terms and are eligible for reappointment. Members may be suspended by the Mayor and may be removed by a three -fourths vote of the Board of Supervisors for official misconduct.
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The current members of the Commission and their appointment dates and expiration dates of their current terms are set forth below:

Name and Title Seat Appointment Date Term Expires
Joshua Arce, President 2 October 16, 2024 August 1, 2026(1) Stephen E. Leveroni, Vice President 3 October 20, 2024 August 1, 2028 Avni Jamdar 1 October 22, 2024 August 1, 2028
Kate H. Stacy 4 October 18, 2022 August 1, 2026(1)
Meghan Thurlow 5 May 23, 2025 August 1, 2028
_______________
(1) Pursuant to Section 4.101.5 of the Charter, the tenure of a member of the Commission will terminate no later than 60 days after the expiration of the member’s term, unless the member is reappointed. Mayor Lurie has announced he is nominating Commissioner Arce and Commissioner Stacy for re -appointment.

Management
Management of the SFPUC is led by the General Manager. The General Manager is appointed by the Mayor from candidates submitted by the Commission. Once appointed by the Mayor, the General Manager serves at the pleasure of the Commission. As allowed by the Charter, the General Manager serves under an individual employment contract.

Brief biographies of the General Manager and principal members of the senior management of the SFPUC are set forth below.

Dennis J. Herrera . Dennis J. Herrera commenced serving as the General Manager of the SFPUC on November 1, 2021. Prior to his appointment, Mr. Herrera had been re -elected in November 2019 to a four -year term as City Attorney for the City and County of San Francisco. Mr. Herrera was first elected City Attorney in December 2001. Before becoming City Attorney, Mr. Herrera had been a partner in a private law firm and had served in the Clinton Administration as Chief of Staff of the United States Maritime Administration. He also served as president of the San Francisco Police Commission and was a member of the San Francisco Public Transportation Commission. Mr. Herrera earned a B.A. from Villanova University and a J.D. from George Washington School of Law.

Ronald P. Flynn . Ronald P. Flynn is the Deputy General Manager and Chief Operating Officer of the SFPUC. Appointed to this role in 2022, Mr. Flynn works with the General Manager on all policy and strategic initiatives, oversees the SFPUC’s daily operations, including business services (finance, accounting, audits, customer services, information technology), external affairs (communications, legislative, community benefits, equity), and human resources. Prior to this position, Mr. Flynn served for almost 16 years in the San Francisco City Attorney’s Office under Dennis Herrera. For the last seven years, he was the Chief Deputy City Attorney, where he oversaw the City’s litigation teams and worked closely with departments and agencies, including the SFPUC, on procurement, financial, and litigation matters. He worked on Hetch Hetchy litigation, PG&E’s bankruptcy, and other SFPUC-related issues. Mr. Flynn previously served as Team Leader of the Construction and Public Contracting Team in the City Attorney’s Office, working on many SFPUC projects, including the Water System Improvement Program. Mr. Flynn earned a B.Sc. from California Polytechnic State University, San Luis Obispo, an Ed.M. from Harvard University, and a J.D. from University of California, Berkeley School of Law.

Nancy L. Hom. Nancy L. Hom is the Chief Financial Officer and Assistant General Manager for Business Services, providing direction and oversight for the Financial Services, Audit, Loans and Grants, Information Technology Services, Customer Services, and Strategy Innovation and Change bureaus. She has led several important bureaus of Business Services, including serving as the Assurance and Internal Control Director for 10 years; and more recently as the SFPUC’s Co -Deputy Chief Financial Officer. Ms. Hom has nearly 20 years of experience leading financial and governance teams in public agencies and has extensive knowledge of the City’s financial and accounting guidelines and systems, capital improvement projects and regulatory affairs. Prior to joining the SFPUC, she served as the Chief Financial Officer for the Department of Child Support Services and as a leader in the Office of the Controller’s Budget and Analysis division. Ms. Hom earned a B.S. in Business

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Administration from San Francisco State University, concentrating in Finance, Internal Audit, and Project Management. She also maintains two professional certifications from the Institute of Internal Auditors as a Certified Internal Auditor and Certified Risk Management Assurance professional.

Joel Prather. Joel Prather is the Assistant General Manager of the Wastewater Enterprise. His professional background includes more than a decade at the SFPUC Wastewater Enterprise, and over 20 years with the City. He started with San Francisco Public Works in the Bureau of Street and Sewer Repair and came to the SFPUC in 2011 as a Maintenance Planner. Prior to his appointment in his current role, he held the position of Maintenance Manager, where he managed the day to day maintenance systems and practices for the wastewater treatment facilities. He earned a B.A. in urban studies from San Francisco State University.

Jennifer S. Hopkins . Jennifer S. Hopkins is the Assistant General Manager and Chief Administrative Officer (“CAO”) for the Professional Services Bureau. The Professional Services Bureau is comprised of the Office of the CAO, Communications, Real Estate Services, Fleet Operations, Human Resources, Information Technology Services, Community Benefits and Facilities. For over 25 years, Jennifer has provided strategic leadership and direction to diverse teams like Professional Services, with the responsibility of creating a seamless support experience for those she served.

Some of her accomplishments include delivering quality technical solutions, building client partnerships, creating high performance teams, launching new “Startup Divisions”, establishing formal vendor/contract management practices, developing community programs, investing in employee engagement, and leading organizational change and transformation projects. Jennifer joined the SFPUC in 2022 serving as the Department’s first Chief Information Officer.

Prior to the SFPUC, Jennifer was an Executive Leader in Contra Costa County, the City of Fairfield, UC Berkeley, and the City of Kansas City Missouri.

Jennifer holds a B.S. in Computer Science Information Systems from Jackson State University, a M.S. in Management from Baker University; she is a recognized Credentialed California County Technology Executive and completed the UC Berkeley Leadership Program Certification (MOR Associates).

Steven R. Ritchie. Steven Ritchie is the Assistant General Manager of the Water Enterprise, responsible for overseeing water system operations and planning from the Hetch Hetchy Project through the Regional Water System to the City Distribution Division. He is also responsible for the management of the SFPUC’s lands and natural resources. Mr. Ritchie was the Manager of Planning at the SFPUC from 1995 to 1998. Prior to his current assignment, he managed the South Bay Salt Pond Restoration Project, a multi -agency effort to restore 15,100 acres of valuable habitat in South San Francisco Bay, while providing for flood risk management and public access. In addition, Mr. Ritchie has worked at management positions at the San Francisco Bay Regional Water Quality Control Board (1987-1995), the CalFed Bay Delta Program (1998- 2000), and URS consultants (2000- 2004). He has a B.S. and M.S. in Civil Engineering from Stanford University.

Stephen D. Robinson. Stephen Robinson is the Assistant General Manager for Infrastructure, where he is responsible for capital programs and project implementation for SFPUC facilities, including the Water Capital Improvement Plan, the Wastewater Capital Improvement Plan (which includes the Sewer System Improvement Program), and the Hetchy Capital Improvement Program. Previously, he was the Director of the Wastewater Enterprise Capital Program for SFPUC’s Infrastructure Division. He is a Professional Civil Engineer and a UK Chartered Civil Engineer with over two decades of planning, design, construction, and management experience in the water/wastewater sector. Prior to joining SFPUC, Mr. Robinson worked with MWH/Stantec as a consultant and served in the British Army as a Royal Engineer Captain. Mr. Robinson has a master’s degree in Civil Engineering and Management from the Queens University of Belfast, Northern Ireland.

Employee Relations
San Francisco. The City’s original budget for fiscal years 2025 -26 and 2026- 27 included approximately 39,377 and 39,355, respectively, full -time and part -time budgeted City positions. City workers are represented by 36 different labor unions. The largest unions in the City include the International Federation of Professional and Technical Engineers (“IFPTE”), Local 21, which represents many Wastewater Enterprise employees.

Wages, hours and working conditions of City employees, including employees of the SFPUC, are determined by collective bargaining pursuant to State law (the Meyers -Milias-Brown Act, California Government

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Code Sections 3500-3511) and the San Francisco Charter. San Francisco is unusual among California’s cities and counties in that nearly all of its employees, including managerial and executive -level employees, are represented by labor organizations.

Further, the San Francisco Charter requires binding arbitration to resolve negotiations in the event of an impasse. If an impasse occurs, the parties are required to convene a tripartite arbitration panel, chaired by an impartial third -party arbitrator, which sets the disputed terms of the new agreement. The award of the arbitration panel is final and binding. This process applies to almost all City employees. Since 1976, no City employees have participated in a union -authorized strike, which is prohibited under the Charter. On July 24, 2023, the California Public Employment Relations Board (“ PERB”) ruled in favor of the Service Employees International Union (“SEIU”), Local 1021 and IFPTE, Local 21, concluding that Charter section A8.346 and certain portions of section A8.409 prohibiting strikes by City employees are invalid, affirming a proposed decision of an administrative law judge that such Charter provisions violate the Meyers -Milias-Brown Act. The City has filed a notice of appeal to the California Court of Appeal with respect to the PERB decision. The City can give no assurance whether the appeal will be successful. See “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Labor Actions” in the forepart of this Official Statement.

The City’s employee selection procedures are established and maintained through a civil service system. In general, selection procedures and other merit system issues, with the exception of discipline, are not subject to arbitration. Disciplinary actions are generally subject to grievance arbitration, with the exception of sworn police officers and fire fighters.

In 2024, the City negotiated three -year agreements (for Fiscal Years 2024 -25 through 2026 -27) with 27 labor unions, including various labor unions that represent Wastewater Enterprise employees. The parties agreed to the following: a 1.5% wage increase effective July 1, 2024; a 1.5% wage increase effective January 4, 2025; a 1% wage increase effective June 30, 2025, at close of business, and a 1% wage increase effective July 1, 2025, for a total compounded increase of 2.01% effective July 1, 2025; a 1.5% wage increase effective January 3, 2026; a 2% wage increase effective June 30, 2026, at close of business; a 2% wage increase effective January 2, 2027; and a

2.5% wage increase effective June 30, 2027, at close of business. These increases have no off ramps (potential deferrals triggered by the budget). The total compounded increase over three years is 13.75%. All City employees shall earn no less than $25 per hour as of July 1, 2024 (which affects SEIU, Local 1021, and Laborers, Local 261).

SFPUC. The SFPUC currently employs approximately 2,534 of the City’s workers, of which approximately 17.2% work for the Wastewater Enterprise. The Charter governs the SFPUC’s employment policies and authorizes the San Francisco Civil Service Commission to establish rules and procedures to implement those policies.

Over the next five years, approximately 37.6% of the SFPUC workforce agency- wide, including approximately 45.4% of the Wastewater Enterprise workforce, will be eligible for retirement. A new generation of jobs will require workers with specialized training, skills and experience. The SFPUC’s 2020 Strategic Sustainability Plan includes an “effective workforce” goal, which focuses on several workforce development and sustainability initiatives. The SFPUC provides career opportunities and training to San Francisco residents and partners with unions, the City and other stakeholders to support apprenticeships and pre -apprentice training programs in the skilled trades to help maintain a skilled and reliable workforce for the SFPUC’s operations and infrastructure development. In addition, the SFPUC provides high school, college and graduate student internship programs that span a variety of fields including engineering, water and wastewater management, finance, communications, human resources and information technology. The SFPUC also provides ethics training, diversity training, management training, environmental management system training, as well as fraud prevention and awareness training.

The following table summarizes the number of SFPUC and Wastewater Enterprise employees covered by a memorandum of understanding (similar to a collective bargaining agreement), each of which will expire on June 30, 2027.
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TABLE 1

SFPUC AND WASTEWATER ENTERPRISE

EMPLOYEES COVERED BY

MEMORANDA OF UNDERSTANDING
Employee Bargaining Unit
SFPUC
Full-Time
Equivalent
Employment(1)
Wastewater
Enterprise
Full-Time
Equivalent
Employment
(1)
International Association of Machinists, Lodge 1414 54 4 Carpenters, Local 22 21 3
Hod Carriers, Local 36 2 2
International Brotherhood of Electrical Workers, Local 6 136 22 Laborers, Local 261 173 49
Municipal Executives Association 231 26
Operating Engineers, Local 3 23 2
Plumbers, Local 38 238 35
International Federation of Professional and Technical Engineers, Local 21 1,196 197 Service Employees International Union, Local 1021 377 42 San Francisco City Workers United 14 5
Stationary Engineers, Local 39 290 183
Teamsters, Local 853 36 12
Transport Workers Union Local 250-A, Automotive Service Workers 6 1 Unrepresented Employees(2) 1 0
Total 2,798 583

(1) Represents budgeted numbers as of July 1, 2025. Actual full -time equivalent employment totals will differ from the number of positions budgeted by the SFPUC for a variety of reasons, including certain requirements in the respective memoranda of understanding (similar to collective bargaining agreements). See “FINANCIAL OPERATIONS – General – City Budget Process.”
(2) Not covered by a memorandum of understanding (similar to a collective bargaining agreement).

Source: SFPUC.

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Employee Benefit Plans
Retirement System Plan Description . The San Francisco City and County Employees’ Retirement System (the “Retirement System” or “SFERS”) is charged with administering a defined -benefit pension plan (the “ Plan”) that covers substantially all City employees, including SFPUC employees, and certain other employees. The Retirement System was initially established by approval of San Francisco voters on November 2, 1920, and the State Legislature on January 12, 1921, and is currently codified in the Charter. The Charter provisions governing the Retirement System may be revised only by a Charter amendment, which requires an affirmative public vote at a duly called election. The Retirement System is administered by the Retirement Board (the “ Retirement Board ”). The Plan provides basic service retirement, disability and death benefits based on specified percentages of final average salary and provides cost-of-living adjustments after retirement. The Plan also provides pension continuation benefits to qualified survivors.

Funding Practices . Employer and employee (member) contributions are mandated by the Charter.

Sponsoring employers, including the SFPUC, are required to contribute 100% of the actuarially determined contribution approved by the Retirement Board. The Charter specifies that employer contributions consist of the normal cost (the present value of the benefits that SFERS expects to become payable in the future attributable to a current year’s employment) plus an amortization of the unfunded liability over a period not to exceed 20 years. The Retirement Board sets the funding policy subject to the Charter requirements.

The Retirement Board adopts the economic and demographic assumptions used in the annual valuations.

Demographic assumptions such as retirement, termination and disability rates are based upon periodic demographic studies performed by a consulting actuarial firm approximately every five years. Economic assumptions are reviewed each year by the Retirement Board after receiving an economic experience analysis from the consulting actuarial firm.

The Retirement Board adopted the demographic assumptions for the 2020- 2021 actuarial valuations at its December 9, 2020 Retirement Board meeting based on the experience study dated August 12, 2020. At its September 10, 2025 meeting, the Retirement Board updated the demographic assumptions beginning with the July 1, 2025 actuarial valuation based on the experience study, dated September 2025. The current discount rate of 7.20% was adopted at the November 10, 2021 Retirement Board meeting, effective for the July 1, 2021 actuarial valuation.

The Retirement Board most recently voted to maintain the discount rate, price inflation, and wage inflation assumptions (for the July 1, 2025 actuarial valuation) at its November 12, 2025 meeting.

While employee contribution rates are mandated by the Charter, sources of payment of employee contributions may be the subject of collective bargaining agreements with each union or bargaining unit. Since July 1, 2011, substantially all employee groups have agreed through collective bargaining for employees to contribute all employee contributions through pre-tax payroll deductions.

The following table shows total Retirement System liabilities, assets and percent funded for the last five completed actuarial valuations, as well as total contributions for the last five Fiscal Years ending June 30, 2025.

Total contributions for Fiscal Year 2024-25 were $1,127,318,000.

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TABLE 2

CITY AND COUNTY OF SAN FRANCISCO
EMPLOYEES’ RETIREMENT SYSTEM
FISCAL YEARS 2020-21 THROUGH 2024-25
(IN THOUSANDS)
As of
July
1st
Actuarial
Liability
Market
Value of
Assets
Actuarial
Value of
Assets
Market
Percent
Funded
Actuarial
Percent
Funded
Employee
and
Employer
Contribution
in Prior
Fiscal Year
Employer
Contribution
Rates in Prior
Fiscal Year(1)
2021 $31,905,275 $35,673,834 $30,043,222 111.8% 94.2% $1,245,957 26.90% 2022 33,591,565 32,798,524 32,275,474 97.6 96.1 1,191,934 24.41 2023 35,351,967 33,688,428 34,137,005 95.3 96.6 1,086,567 21.35 2024 37,314,504 35,417,666 36,038,298 94.9 96.6 1,100,130 18.24 2025 39,446,082 37,450,095 38,185,053 94.9 96.8 1,127,318 16.91

(1) Employer contribution rates are shown prior to employer/employee cost -sharing provisions of 2011 Proposition C. Employer contribution rates for fiscal years 2024-25 and 2025-26 are 16.91% and 16.53%, respectively.

Source: SFERS’ audited year -end financial statements and required supplemental information. SFERS’ annual Actuarial Valuation Report dated July 1st.

Note: Information above reflects entire Retirement System, which covers substantially all City employees, including SFPUC employees, and certain other employees.

The City’s net pension liability for its proportionate share of the net pension liability of the Plan and net pension liability of the Replacement Benefits Plan, a qualified excess benefit plan that covers some Wastewater Enterprise employees were approximately $3.8 billion for Fiscal Year 2024 -25. The amount allocable to the Wastewater Enterprise, as of June 30, 2025, was approximately $74.3 million.

The SFPUC is required to contribute at an actuarially determined rate and allocates the applicable portions of such contribution to the separate enterprises, including the Wastewater Enterprise. For Fiscal Years 2019 -20 through 2023- 24, the SFPUC’s employee contribution rates varied from 7.5% to 12.0% as a percentage of gross covered salary. For Fiscal Years 2019 -20 through 2023-24, the Wastewater Enterprise has paid 100% of its required contributions. The contributions by the Wastewater Enterprise required for Fiscal Years 2019 -20 through 2023- 24 are summarized in the following table:

TABLE 3

WASTEWATER ENTERPRISE RETIREMENT SYSTEM CONTRIBUTION
FISCAL YEARS 2019-20 THROUGH 2023-24
(IN THOUSANDS)
Fiscal Year
(Measurement
Period)
Employer
Contribution
Rates
Wastewater
Enterprise
Contribution
2019-20 25.2% $14,352
2020-21 26.9 16,083
2021-22 24.4 14,543
2022-23 21.4 12,383
2023-24 18.2 12,402

(1) Employer contribution rate for fiscal year 2024 -25 was 16.9%. The Wastewater Enterprise contribution for fiscal year 2024 -25 is expected to be approximately $_____, but will not expected to be finalized until December 2026.

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Source: Compiled from SFERS Actuarial Valuation report as of July 1, 2025, and SFPUC’ s audited financial statements for Fiscal Years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25.

Plan Financial Reports and Funded Status. 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 their website at https://mysfers.org/about -sfers/publications/. The website is provided for convenience only and the report is not incorporated by reference into this Official Statement and should not be relied upon in making an investment in the 2026A Bonds.

Health Care Benefits. The SFPUC participates in the City’s agent multiple employer defined benefit plan, which operates as a cost -sharing multiple employer defined benefit plan (the “ OPEB Plan ”). The OPEB Plan is maintained by the City and is administered through the City’s Health Service System and provides postemployment medical, dental and vision insurance benefits to eligible employees, retired employees, and surviving spouses.

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 other post -employment benefit plan.

As prescribed under Governmental Accounting Standards Board (“ GASB”) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions, net OPEB liability, deferred outflows/inflows of resources related to OPEB, and OPEB expense are actuarially determined on a citywide basis.

Net OPEB liability is measured as the portion of the present value of projected benefit payments to be provided to current active and inactive employees attributed to those employees’ past service, less the amount of the Retiree Healthcare Trust Fund investments measured at fair value. As of March 31, 2026, the fair value of the investments in the Retiree Healthcare Trust Fund was approximately $_____.

The following table shows the City’s reported net OPEB liabilities and the Wastewater Enterprise’s proportionate share of such net OPEB liabilities for Fiscal Years 2022-23 through 2024-25:

TABLE 4

ANNUAL OPEB OBLIGATION
FOR FISCAL YEARS 2022-23 TO 2024-25
(IN THOUSANDS)
Fiscal Year
City’s Reported
Net OPEB
Liabilities
Wastewater
Enterprise’s
Proportionate
Share of City’s Net
OPEB liabilities
City’s
Contribution
Amount
Wastewater
Enterprise’s
Proportionate
Share of City’s
Contribution
Amount
2022-23 $3,746,270 $49,035 $260,649 $3,412
2023-24 3,924,832 49,260 278,701 3,498
2024-25 3,921,799 50,552 300,932 3,879

Source: SFPUC.

The City issues a publicly available financial report on a City -wide level that includes the complete note disclosures and required supplementary information related to the City’s post -retirement health care obligations. The report may be obtained on the Controller’s website at https://www.sf.gov/departments/controllers -office. The website is provided for convenience only and the report is not incorporated by reference into this Official Statement and should not be relied upon in making an investment in the 2026A Bonds .

Voter Approved Changes to the Retirement Plan . SFERS plan benefits are established under the Charter and approved directly by the voters, rather than through the collective bargaining process. Changes to retirement benefits require a voter-approved Charter amendment. In 2011, voters approved Proposition C which aimed to reduce future pension costs. Proposition C introduced new lower-cost benefit tiers for all members hired on and after January 7, 2012 and also restricted the payment of any new supplemental COLAs to when SFERS is fully funded.

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Since 2011, the fully funded requirement for Supplemental COLAs has been removed from all members hired before January 7, 2012. First, the October 2015 Superior Court judgement removed the fully funded requirement for pre-Proposition C members retired on and after November 6, 1996. Then in November 2022, voters approved Proposition A which removed the fully funded requirement for retirees who commenced benefits prior to November 6, 1996. However, for this older group of retirees only, the amount of supplemental COLA is capped at $200 per month for retirees with annual pensions exceeding $50,000 when SFERS is not fully funded. The Proposition C fully funded restriction remains in effect for retirees hired on and after January 7, 2012. In addition, for these post - 2011 hires, the supplemental COLA is temporary and reverts to zero in any year in which no supplemental COLA is paid.

THE WASTEWATER ENTERPRISE
Background and History
Initial development of the City’s combined wastewater system dates back to the second half of the 19th century. In accordance with common engineering practice of that period, the combined system collected both sewage and stormwater runoff and transported them to multiple discharge points on the shoreline of San Francisco Bay.

The Wastewater Enterprise provides sewage and stormwater collection, treatment and disposal services through the operation of a combined sewage and stormwater system. The Wastewater Enterprise provides such sanitary wastewater and stormwater services across eight distinct urban watersheds, with the Southeast Treatment Plant providing all -weather wastewater treatment and the North Point Facility providing wet -weather treatment, serving the North Shore, Channel, Islais, Sunnydale, and Yosemite urban watersheds with effluent outfalls to the San Francisco Bay (the “Bayside Watersheds ”), and the Oceanside Treatment Plant providing all -weather wastewater treatment serving the Richmond, Sunset, and Lake Merced urban watersheds with an effluent outfall to the Pacific Ocean (the “Westside Watersheds ”). The facilities referenced here are more fully described below in this Appendix A.

The combined sewage and stormwater system handles an average of approximately 40 billion gallons per year of combined wastewater and stormwater. Approximately 34 billion gallons per year receive full secondary treatment, 4.5 billion gallons per year receive primary or decant treatment and are discharged to deep -water outfalls, and 1.5 billion gallons per year receive the equivalent to wet -weather primary treatment and are discharged through nearshore outfalls.

In several small areas of San Francisco representing less than 3% of the City’s total sewer mileage, wastewater and stormwater are initially collected and conveyed in separate storm and sanitary sewers, which connect to the combined sewage and stormwater system. These separate storm and sanitary sewers are generally located in redevelopment areas within San Francisco that are subject to the City’s stormwater management ordinance (the “Stormwater Management Ordinance”). These redevelopment projects are also required to include green infrastructure to manage and treat stormwater. Green infrastructure includes tools such as rain gardens, green roofs and permeable pavement that slow and clean stormwater prior to discharge into the aquifer, receiving waters or sewers in adjacent areas.

The operations of the Wastewater Enterprise are highly regulated. For more information, see “REGULATORY MATTERS.”
Service Area
General. The service area of the Wastewater Enterprise encompasses approximately 29,773 acres and includes residents of San Francisco and of northern San Mateo County through arrangements with three municipal sewer service providers: North San Mateo County Sanitation District, the Bayshore Sanitary District and the City of Brisbane (collectively, the “ Municipal Customers ”). The SFPUC also currently provides wastewater treatment service on Treasure Island and Yerba Buena Island pursuant to contract, and is in the process of expanding its service area to include Treasure Island and Yerba Buena Island. See “– Wastewater Treatment – Contract Services,”

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“WASTEWATER ENTERPRISE CAPITAL PROGRAM – Treasure Island Capital Improvements” and “FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM.” The Wastewater Enterprise serves residential, commercial and industrial users, making up a daytime “population equivalent” of approximately 991,225 in 2024. The United States Census Bureau estimates of the total daytime and nighttime populations of the City from calendar years 2020 to 2024 (most recent data available) are reflected in the table below.

TABLE 5

CITY AND COUNTY OF SAN FRANCISCO POPULATION
CALENDAR YEARS 2020 TO 2024
2020 2021 2022 2023 2024
Daytime(1) 1,109,742 940,211 942,433 987,724 991,225
Nighttime 874,784 815,201 808,437 808,988 827,526

(1) Daytime population generally reflects the resident population adjusted for workers commuting into and out of San Francisco, based on Census Bureau estimates.

Source: United States Census Bureau, American Community Survey 1-Year Survey for calendar years 2021,2022, 2023, and 2024; 5-year Survey for calendar year 2020.

Recent Economic Developments . As shown in “Table 5 – City and County of San Francisco Population – Calendar Years 2020 to 2024,” San Francisco has experienced an overall decline in both daytime and nighttime (resident) population since calendar year 2020, although both measures increased in 2023 and 2024. This is due to, among other factors, widespread business closures, worker migration out of San Francisco as a result of remote work policies, a general decline in tourism, and unemployment concentrated recently in the technology- heavy information, professional and business services sectors, which can be attributed in some part to the COVID -19 pandemic. As of June 2026, remote work in San Francisco has persisted, with weekly office attendance at approximately __% of pre -pandemic levels. Despite the general decline in population since calendar year 2020, the number of active sewer accounts has increased, as described under “ – Customer Base” and shown in “Table 6 – Summary of Active Sewer Accounts by User Type – Fiscal Years 2020-21 to 2024-25.” See also “THE CITY AND COUNTY OF SAN FRANCISCO” and “FINANCIAL OPERATIONS – Recent Factors Impacting Wastewater Revenues.”
Customer Base
As of June 30, 2025, the SFPUC has 181,682 active retail wastewater accounts. Of these, approximately 82% are residential accounts, with the remainder being commercial, industrial, or municipal. Major non -residential customer categories include retail, offices, restaurants, and services, which together account for approximately 18% of all customer accounts. The remaining accounts are primarily accounts associated with fire suppression water accounts. As shown in “Table 6 – Summary of Active Sewer Accounts by User Type – Fiscal Years 2020 -21 to 2024-25” below, the total number of customer accounts (excluding unmetered properties) has increased by a total of approximately 1.9% since Fiscal Year 2020- 21, and non-residential accounts (excluding unmetered properties) have grown by a total of approximately 6.0% during that time period.

In addition to its retail customers, the SFPUC provides wholesale sewage treatment services to municipal customers located in northern San Mateo County, and operates wastewater treatment facilities on Treasure Island and Yerba Buena Island. See “– Wastewater Treatment – Contract Services.” The following table sets forth a five -year history of the number of customer accounts served by the Wastewater Enterprise, grouped by user type.

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TABLE 6

SUMMARY OF ACTIVE SEWER ACCOUNTS BY USER TYPE
FISCAL YEARS 2020-21 TO 2024-25
User Type 2020-21 2021-22 2022-23 2023-24 2024-25
Multi-Family Residential(1) 36,528 36,595 36,603 36,660 36,679 Single-Family Residential 111,398 111,786 111,995 112,795 112,993 Subtotal Residential 147,926 148,381 148,598 149,455 149,672

Commercial(1) 24,941 25,278 25,564 26,002 26,438
Municipal Customers 1,182 1,208 1,218 1,233 1,251
Unmetered Properties(2) 300 297 294 404 4,317
Suburban(3) 7 7 6 4 4
Total 174,356 175,171 175,680 177,098 181,682

(1) Includes Presidio Trust Wastewater Accounts, which consist of one multi -family residential, one mixed -use (residential and commercial), and three commercial customer accounts. (2) Represents properties that are not subject to the sanitary sewer component of the sewer service charge. Increase in Fiscal Year 2024-25 reflects the opening of new customer accounts in connection with the implementation of the stormwater component of the sewer service charge. See “FINANCIAL OPERATIONS – Wastewater Enterprise Rates and Charges.”
(3) In addition to the four current suburban customers, service is provided to North San Mateo County Sanitation District, Bayshore Sanitary District and the City of Brisbane.

Source: SFPUC.

Separate rate schedules apply to single- family residential, multi- family residential, and non- residential customers. See “FINANCIAL OPERATIONS – Wastewater Enterprise Rates and Charges.” Combined Sewage and Stormwater System
On average, over three quarters of San Francisco’s annual rainfall occurs between November and March.

Depending on the duration, intensity and storm pattern, combined flows of sewage and stormwater can exceed the collection and treatment system hydraulic capacity, resulting in combined sewer discharges. The SFPUC’s permits explicitly authorize combined sewer discharges from the system’s 34 active, nearshore combined sewer discharge outfalls when a storm exceeds the system’s capacity. To reduce the number and volume of combined sewer discharges during wet-weather events, the system relies on a series of large underground transport/storage structures (box sewers and tunnels) around the perimeter of San Francisco to intercept, temporarily store and transport the mixture of storm runoff and sewage to treatment facilities. When the storage capacity of the sewers, the transport/storage structures and the wet weather capacity of their associated treatment facilities are exceeded during large storms, combined sewage is discharged through one or more combined sewer discharge outfalls (and receives the equivalent of wet weather primary treatment). The Westside treatment system has seven combined sewer discharge outfalls to the Pacific Ocean, and the Bayside treatment system has 27 combined sewer discharge outfalls to San Francisco Bay. The primary purpose of this system is to maximize treatment and discharge after treatment at the wastewater treatment plants and minimize the incidence and volume of discharge from the combined sewer outfalls.

Sewer Lines . The Wastewater Enterprise’s collection and transport system includes approximately 1,000 miles of main sewer lines, of which approximately 800 miles is made up of collecting sewers of 36 inches or less in diameter. See “Table 7 – Sewer System by Pipe Length in Miles and Age,” which summarizes these assets by age. The SFPUC’s capital program includes replacing specific sewer sections that have been prioritized for replacement using an asset management approach that considers the current conditio n of the section in question and applicable likelihood and consequence of failure. Sewers are generally inspected through closed- circuit television cameras, coded according to the National Association of Sewer Service Companies Pipeline Assessment Certification Program, where the likelihood of failure is calculated on a condition scoring algorithm that takes into account the severity and quantity of defects identified in each inspection. The number of targeted replacement pipe

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miles will vary in the future based on a number of factors, such as shifting focus towards asset renewal and extending service life through an application of various techniques (including but not limited to trenchless spot lining, limited spot dig-up repairs, whole asset lining, and other industry best practices), considering the affordability and deliverability of full sewer replacement projects and of the Wastewater Enterprise’s entire capital program.

TABLE 7

SEWER SYSTEM BY PIPE LENGTH IN MILES AND AGE
Year Built
Gravity Pipe
≤ 36” Diameter All Other Pipe(1) Total Pipe Percent of Total 1860 – 1900 46 27 72 7%
1901 – 1940 275 64 339 32%
1941 – 1980 156 84 240 23%
1981 – present 311 65 376 36%
Unknown 19 1 20 2%
Total(2) 806 241 1,047 100%

(1) Includes gravity pipe greater than 36” in diameter, tunnels, force mains, transport/storage, effluent outfall and overflow discharge.
(2) Totals may not add due to independent rounding.

Source: SFPUC, Wastewater Enterprise.

Transport/Storage Structures. In addition to sewer lines, the Wastewater Enterprise maintains 24 miles of underground transport/storage structures that are located around the perimeter of San Francisco to intercept, temporarily store and transport the mix of stormwater runoff and sewage to treatment facilities. These structures, which operate in both dry and wet weather, were built between 1979 and 1997. The largest of these structures, the Westside transport structure, is approximately two miles long, 45 feet deep and 25 feet wide. The transport/storage structures were designed with sufficient storage to reduce combined sewer discharges and protect beneficial uses of receiving waters for the San Francisco Bay and Pacific Ocean. The transport/storage and collection system provides approximately 200 million gallons worth of storage, or approximately 1.5 to three days of dry weather storage depending on the specific storage box sections and related upstream service area.

The SFPUC believes that the performance of the transport/storage structures and treatment facilities complies with the requirements of the national Combined Sewer Overflow Control Policy, as implemented by discharge permits issued by the EPA and the San Francisco Bay Regional Water Quality Control Board (the “Regional Water Quality Control Board ”). See “REGULATORY MATTERS – Combined Sewer Overflow Control Policy.” By providing both storage volume and detention time, the transport/storage structures allow for delayed treatment of combined sewage and stormwater flows at the treatment plants at the conclusion of a wet - weather event. They also provide a “buffer” for dry weather flows in the event of an unplanned outage.

Pump Stations . The Wastewater Enterprise has 32 pump stations, which include nine major all -weather pump stations, seven major wet-weather pump stations and 16 minor pump stations.

Outfalls and Nearshore Discharge Structures. The Wastewater Enterprise has three offshore outfalls that discharge to deep waters – Southeast Outfall, Northpoint Outfall, and Southwest Ocean Outfall. In addition to these outfalls, 34 active combined sewer discharge structures, or nearshore outfalls, serve as relief points of the combined sewer system. These structures operate infrequently, and only during large storm events. Discharges through these permitted facilities receive the equivalent of wet weather primary treatment.

Urban Watershed Management . The SFPUC, through its combined sewer operations, assists stormwater drainage and is working to improve system performance. The SFPUC’s stormwater program is designed to engage community members, improve watershed function, enhance the environmental quality of San Francisco’s neighborhoods, and protect the water quality of the San Francisco Bay and Pacific Ocean. To achieve these goals, the SFPUC has undertaken a multi -pronged approach consisting of policies, programs, and projec ts that increase the implementation of green infrastructure. The SFPUC implements the Stormwater Management Ordinance, which

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requires new and redevelopment projects in San Francisco to install and maintain green infrastructure to manage stormwater runoff. The SFPUC manages grant programs to fund the construction of green infrastructure at various scales on all land uses, from small residential parcels to the City’s largest parcels. The SFPUC also develops and implements green infrastructure capital projects designed to manage stormwater and deliver co -benefits such as traffic calming and urban greening to the ratepayers.

Wastewater Treatment
Wastewater Treatment Plants . The Wastewater Enterprise operates three major wastewater treatment facilities (in addition to the transport/storage structures that provide partial treatment by removing solids and floatables from combined sewer discharges), two serving the Bayside Watersheds and one serving the Westside Watersheds:
• Southeast Water Pollution Control Plant (the “Southeast Treatment Plant”), which treats dry and wet weather flows collected from the Bayside Watersheds (18,597 acres, or 63% of the total city service area) as well as the Municipal Customers;
• North Point Wet Weather Facility (the “ North Point Facility ”), which treats a portion of wet - weather flows collected from the north Bayside Watersheds; and • Oceanside Water Pollution Control Plant (the “ Oceanside Treatment Plant ”), which treats dry and wet weather flows collected from the Westside Watersheds (11,176 acres, or 37% of the total city service area) and minor flows from northern San Mateo County.

The Oceanside Treatment Plant and related collection facilities in the Westside Watersheds are not interconnected with the Southeast Treatment Plant or the North Point Facility and related collection facilities in the Bayside Watersheds.

Southeast Treatment Plant . The Southeast Treatment Plant is an all- weather secondary wastewater treatment plant serving the sewage and stormwater treatment needs for nearly two -thirds of San Francisco in the Bayside Watersheds, which consists of 18,597 acres including the Marina, Downtown, South of Market Area, Mission, Hunters Point, and Visitacion Valley neighborhoods, plus 1.65 million gallons per day (“ mgd”) from the Municipal Customers. Land uses in the Bayside Watersheds are a mixture of residential, commercial, light industrial and heavy industrial. The Southeast Treatment Plant, as the only Bayside all -weather facility, is a critical component of the system that must meet high availability requirements. The Bayside Watersheds wastewater and stormwater flow is collected by the combined sewer system and conveyed to the Southeast Treatment Plant via gravity sewers, tunnels, transport/storage structures, pump stations and force mains.

The Southeast Treatment Plant provides preliminary, primary and secondary treatment using a high- purity- oxygen activated sludge process prior to effluent disinfection. Sludge treatment consists of gravity- belt thickening, anaerobic digestion, chemical conditioning and dewatering. The Southeast Treatment Plant’s treated effluent is discharged during dry weather into the San Francisco Bay through a deep -water outfall near Pier 80. During wet weather, treated effluent is discharged through the Pier 80 outfall and through an additional outfall at the shoreline of Islais Channel.

The Southeast Treatment Plant was planned and designed in the 1940s and commenced operations in 1951 as a primary treatment facility. To meet the mandates of the federal Clean Water Act, the Southeast Treatment Plant was expanded in the early 1980s to provide secondary treatment of all Bayside Watersheds’ dry- weather flows with a daily average design capacity of approximately 85 mgd and peak- hour design flow of 142 mgd. In 1996, the Southeast Treatment Plant’s wet weather capacity was increased to 250 mgd, with 150 mgd receiving secondary treatment prior to disinfection and discharge. During wet weather, additional wet -weather facilities are operated at the Southeast Treatment Plant to provide primary treatment and disinfection to the remaining 100 mgd of combined sewage flow.

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The Southeast Treatment Plant operates every day of the year in both wet weather and dry weather conditions. Many replacement projects are underway to ensure reliability requirements are met, including seismic upgrades. At the start of SSIP, the program management consultant conducted a full condition assessment of the Southeast Treatment Plant and the highest priority needs were identified for both the liquid treatment and solids treatment facilities. The assessment considered current maintenance records, remaining life and compliance with levels of service. Projects were identified for all of the major treatment processes, and for various support, monitoring and control systems. Maintenance and repair projects, including repairs to digester roofs and existing biosolids treatment and storage equipment, have been undertaken to bolster some of the facilities considered to be the most vulnerable so that they function until the new facilities are completed. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program.” Because the Southeast Treatment Plant is not interconnected with the other treatment plants, it cannot be shut down during construction of such projects as there would be no substitute wastewater treatment option. Instead, the Southeast Treatment Plant will remain in service during construction. See “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Aging Facilities” and “– Limited Redundancy” in the forepart of this Official Statement.

North Point Wet- Weather Facility . The North Point Facility is a wet- weather primary wastewater treatment plant serving the northeast quadrant of the Bayside Watersheds, an area comprised of predominantly commercial and residential land uses. The North Point Facility was originally constructed in 1951 as an all -weather primary treatment facility, but did not incorporate digesters, so sludge was pumped to the digesters at the newly constructed Southeast Treatment Plant for treatment. In response to the mandates of the federal Clean Water Act, the North Point Facility was converted into a strictly wet- weather treatment facility in 1983, providing up to 150 mgd of primary treatment.

The North Point Facility provides preliminary, primary and disinfection treatment. Effluent from the North Point Facility is discharged into the San Francisco Bay through a deep water outfall system at Piers 33 and 35. At the conclusion of each wet -weather event, grit and solids are flushed out of the sedimentation tanks and directed to the Channel Pump Station, which pumps them to the Southeast Treatment Plant for treatment.

Oceanside Treatment Plant . Constructed in 1993, the Oceanside Treatment Plant is an all -weather secondary wastewater treatment plant that provides the wastewater treatment and stormwater treatment needs for the Westside Watersheds and San Mateo County flows that drain to the Westside Watersheds. Land uses in the Westside Watersheds are primarily residential.

The Oceanside Treatment Plant’s dry weather capacity is up to 43 mgd of secondary treatment. The Oceanside Treatment Plant’s wet -weather capacity is up to 65 mgd of primary and 43 mgd of secondary treatment using the high-purity-oxygen activated sludge process. Sludge treatment consists of thickening, anaerobic digestion, chemical conditioning and dewatering. Up to 195 mgd of plant effluent and decanted wet weather flow from the westside transport storage boxes can be discharged through the Southwest Ocean Outfall, which ends approximately four miles offshore in the Pacific Ocean.

Emergency Operations. The SFPUC believes that it maintains up -to-date contingency plans in the event of an unplanned outage or failure of a treatment facility, process unit, pump station, sewer pipeline or other infrastructure element. The wastewater collection and treatment system is designed with some redundancy and flexibility in order to facilitate responses to emergency events, though the Westside Watersheds and Bayside Watersheds are not interconnected.

If an unplanned shutdown of critical treatment facilities were to occur, the transport/storage structures and collection system pipes provide approximately 200 million gallons of storage (providing approximately 1.5 to three days of dry weather storage in some portions of the system, depending on the inflow). The wastewater treatment facilities and major pump stations are also built with some redundancy, and in some instances may continue operation with select equipment outages. Critical infrastructure elements with higher failure risk or for which adequate redundancy is not available have been identified as capital project needs to increase system flexibility and the ability to respond to unplanned events. See “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations” in the forepart of this Official Statement.

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Biosolids Management . The Southeast Treatment Plant and the Oceanside Treatment Plant produce approximately 58,000 wet tons of biosolids per year. Biosolids are highly treated, anaerobically digested wastewater solids that are rich in plant nutrients and utilized as fertilizer. The SFPUC’s biosolids are transported to Sacramento, San Benito, and Merced Counties and used as a fertilizer, transported to Lystek, a facility which processes biosolids into a liquid fertilizer, and transported to a facility in Merced where they are processed into biosolids compost .

The Wastewater Enterprise coordinates the transportation, use, testing, and reporting for biosolids in accordance with applicable regulations. The SFPUC plans to implement treatment and technology improvements at the Southeast Treatment Plant which will produce “Class A” biosolids as part of a major capital upgrade of the plant. The Biosolids Digester Facilities Project (the “ Biosolids Digester Facilities Project ”) will replace existing infrastructure, produce a high quality biosolids product, ensure system reliability and reduce negative impacts to the neighborhood with respect to aesthetics and odors. For more information about the Biosolids Digester Facilities Project, see “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Treatment Facilities – Biosolids Digester Facilities Project.” See also “REGULATORY MATTERS.”
Contract Services. The Wastewater Enterprise operates wastewater treatment facilities on Treasure Island and Yerba Buena Island, both located in the San Francisco Bay, pursuant to an agreement with the Treasure Island Development Authority (“ TIDA”). TIDA is a non -profit public benefit agency created by the Board of Supervisors in 1997 vested with the rights to administer municipal services to Treasure Island and Yerba Buena Island during interim reuse of the property. Such contractual wastewater treatment service is provided at a wastewater treatment plant currently owned by TIDA and operated by the SFPUC on Treasure Island. The wastewater system serving Treasure Island and Yerba Buena Island currently relies on pumping to convey sewage to the treatment plant on Treasure Island for treatment and discharge. The treatment plant is designed to provide secondary treatment of an average of 2.0 mgd and can provide secondary treatment of up to 4.4 mgd during wet weather. The wastewater collection system consists of 10 miles of sewers and several wastewater pump stations, while the stormwater collection system includes several stormwater pump stations and several stormwater outfalls. On behalf of TIDA, the SFPUC currently operates and maintains 16 pump stations. These existing facilities are not owned by the SFPUC and are not interconnected with the Wastewater Enterprise’s combined sewer system in San Francisco. The SFPUC is not currently the wastewater utility provider on Treasure Island and Yerba Buena Island, but rather an independent contractor of TIDA.

The SFPUC will not acquire TIDA’s existing facilities; rather, the SFPUC expects to replace the wastewater facilities on Treasure Island and Yerba Buena Island with new, SFPUC -owned facilities and that the existing facilities currently owned by TIDA (which are beyond their useful life and insufficient to address the expected scale of development on Treasure Island and Yerba Buena Island) will be decommissioned and demolished as part of the area’s redevelopment plans. The Treasure Island Water Resource Recovery Facility is being constructed by the SFPUC as part of ongoing redevelopment activities on Treasure Island and is anticipated to be completed in late 2026. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Treasure Island Capital Improvements – Treasure Island Water Resource Recovery Facility.” The SFPUC anticipates that certain new facilities built or being built by developers as part of the project, including new collection system facilities, will be transferred to the SFPUC and integrated into the Wastewater Enterprise’s overall system assets, beginning with four pump stations that were transferred to the SFPUC in 2025.

Following completion of the Treasure Island Water Resource Recovery Facility and related asset transfers, the SFPUC plans to provide wastewater treatment service and impose rates and charges directly on customers on Treasure Island and Yerba Buena Island. Payments the SFPUC receives from such customers would constitute Revenues, as and to the extent provided under the Indenture. The SFPUC is expected to become responsible for operation and maintenance of the new collection and treatment facilities, and such costs would constitute Operation and Maintenance Costs of the Wastewater Enterprise, as and to the extent provided under the Indenture. Finally, the SFPUC would be responsible for the future repair and replacement of all facilities transferred to it, including the new collection and treatment facilities. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Treasure Island Capital Improvements,” “FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM,” and “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “– Projected Future Demand.”

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System Capacity
When the three treatment facilities and other elements of the collection system are fully operational, the Wastewater Enterprise can provide up to 575 mgd of combined wastewater and stormwater treatment. This includes 272 mgd of primary treatment and 193 mgd of secondary treatment at the three treatment facilities, as well as 110 mgd of equivalent-to-primary treatment through storage/transport boxes.

As shown in the table below, the Southeast Treatment Plant is permitted to discharge dry weather flow of

85.4 mgd and peak wet weather flow of 250.0 mgd. The Oceanside Treatment Plant is permitted to discharge dry weather flow of 43.0 mgd and peak wet weather flow of 65.0 mgd. The North Point Facility is permitted to discharge peak-wet weather flow of 150.0 mgd.

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TREATMENT PLANT MAXIMUM CAPACITY
(MILLION GALLONS PER DAY)
Plant
Permitted Dry
Weather Peak Wet Weather
Southeast Treatment Plant 85.4 250.0
Oceanside Treatment Plant 43.0 65.0
North Point Facility -- 150.0
Total 128.4 465.0

Source: SFPUC, Wastewater Enterprise.

The three treatment plants each discharge through separate deep -water outfalls. At the Southeast Treatment Plant, during peak wet -weather events, secondary treated effluent also can be discharged through a shallow water outfall to Islais channel. The combined sewer system is designed to handle wet -weather events and its permits explicitly authorize combined sewer discharges from the system’s 34 active combined sewer discharge outfalls when a storm exceeds the capacity of the system. See “– Combined Sewage and Stormwater System.” The combined sewer and stormwater system has the capacity to divert, manage, and treat a large volume of wastewater and stormwater. Some extreme storms can exceed the capacity of the system. Building infrastructure large enough to prevent flooding in extremely large storms is not feasible. Flooding did occur in some areas of San Francisco during the extreme storms that occurred in late December 2022 and early January 2023. Such storms did not have a significant impact on the operation of the Wastewater System, but did cause some damage, including damage to motors and sludge pumps at the Southeast Treatment Plant, pumps and equipment at the North Shore Pump Station, compressors, instruments at the Westside Pump Station and instruments within the Westside transport structure and an inlet gate at the Channel Pump Station and created sinkholes at various locations throughout San Francisco. The final costs of repairs are not known presently, but the SFPUC currently expects damages to be at least $4.1 million. The City has applied for federal and State disaster relief funding, and the Federal Emergency Management Agency has obligated approximately $1 million in public assistance to repair damage to the wastewater system that resulted from the winter storms in 2022 and 2023. The SFPUC anticipates it will be able to pay such costs from reserves, revenues of the Wastewater Enterprise, and/or proceeds of existing Wastewater Enterprise bonds. The City has applied for federal and State disaster relief funding, and the SFPUC plans to seek reimbursement for qualified expenses. See also “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Natural and Man-Made Disasters” in the forepart of this Official Statement.

Current System Demands
Wastewater Enterprise facilities collected, treated and discharged an average of approximately 58.6 mgd of sanitary wastewater during dry-weather periods between calendar years 2021 to 2025.

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TABLE 9

AVERAGE DRY WEATHER TREATMENT
CALENDAR YEARS 2021 TO 2025
(MILLION GALLONS PER DAY)
Plant 2021 2022 2023 2024 2025
Southeast Treatment Plant 48.1 42.7 44.2 45.0 44.1
Oceanside Treatment Plant 12.6 10.9 10.4 9.1 10.8
Total 60.7 53.6 54.6 54.1 54.9

Source: SFPUC, Wastewater Enterprise.

Projected Future Demand
The 2027 Financial Plan (as defined below) projects that in-City wastewater flows will reach a relative high in Fiscal Year 2025 -26, as water usage recovers from its all -time low during Fiscal Year 2021 -22 caused by the combined effects of the pandemic and recent drought. Starting in Fiscal Year 2026- 27, SFPUC’s financial planning models use a conservative forecast of water usage that shows a slight decrease in usage over time despite an assumed account growth of approximately 0.3% annually. See “ – Service Area” and “– Customer Base.” This differential is attributable to decreases in average per capita water usage due to ongoing conservation initiatives, including plumbing codes which apply to all new development, as well as the impact of price elasticity on demands caused by large rate increases.

This growth includes the SFPUC’s planned expansion of its service area to include Treasure Island and Yerba Buena Island. In connection with such expansion, the SFPUC is constructing the Treasure Island Water Resource Recovery Facility, a new facility that will provide reliable service for Treasure Island and Yerba Buena Island residents and meet the recycled water demands of future redevelopment on Treasure Island and Yerba Buena Island. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Treasure Island Capital Improvements.” The Board of Supervisors and former Mayor Breed approved the City’ s housing plan for the next eight years (2022-2030) on February 1, 2023 (the “Housing Element 2022 Update”). The Housing Element 2022 Update targets the creation of 82,000 units by 2031. To maintain a more conservative revenue outlook, t he 2027 Financial Plan used a forecast based on the prior Housing Element 2020 Update to forecast account growth. In addition to the Treasure Island Water Resource Recovery Facility, th is growth may require dry-weather treatment capacity expansion at Wastewater Enterprise’s treatment plants over the next 10-20 years.

Because the SFPUC maintains a combined sewer system, there may be other factors in the future, including environmental changes and regulatory developments, that could require expanded collection or treatment capacity.

See “REGULATORY MATTERS.”
Cybersecurity
City Measures. The City, like many other large public and private entities, relies on a large and complex technology environment to conduct its operations, and faces multiple cybersecurity threats including, but not limited to, hacking, viruses, malware and other attacks on its computing and other digital networks and systems.

Cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City’s systems tec hnology for the purposes of misappropriating assets or information or causing operational disruption and damage. To mitigate the risk of business operations impact and/or damage from cybersecurity incidents or cyber -attacks, the City invests in multiple forms of cybersecurity and operational safeguards. In 2016, the City adopted a City- wide Cybersecurity Policy (the “ City Cyber Policy ”) to support, maintain, and secure critical infrastructure and data systems. The objectives of the City Cyber Policy include protecting critical infrastructure and information, managing risk, improving cyber security event detection and remediation, and facilitating cyber awareness across all City departments. The City’s Department of Technology has established a cybersecurity team to work across all City departments, including the SFPUC, to implement the City Cyber Policy. The City Cyber Policy is reviewed periodically. The City has also appointed a City Chief

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Information Security Officer (the “ CCISO”), who is directly responsible for understanding the business and related cybersecurity needs of the City’s departments, including the SFPUC. The CCISO is responsible for identifying, evaluating, responding, and reporting on information security risks in a manner that meets compliance and regulatory requirements, and aligns with and supports the risk posture of the City.] SFPUC Measures. Federal agencies have recently reported that critical infrastructure sectors, such as wastewater and water, may be specific targets of cybersecurity threat actors. The occurrence of military conflicts or terrorist activities, including cyber terrorism, could adversely impact the Wastewater Enterprise’s operations and finances. For example, cyberattacks directed at wastewater sector operations could damage wastewater transmission, treatment, distribution or storage assets, causing operational malfunctions and outages, and resulting in costly recovery and remediation efforts. In January 2024, the SFPUC’s system was targeted by an advanced threat actor.

The SFPUC’s prompt execution of its cybersecurity incident response plan, as further described below, successfully contained the incident without any significant impact.

The SFPUC abides by the City Cyber Policy and maintains its own cybersecurity and disaster recovery program (the “ SFPUC Cybersecurity Program ”) that is based on the National Institute of Standards and Technology cybersecurity guidance. In addition, control networks for the Wastewater Enterprise and the Water Enterprise adhere to the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency’s (“CISA”) Cross- Sector Cybersecurity Performance Goals, as recommended by the USEPA. Control networks for the Power Enterprise adhere to the North American Electric Reliability Corporation critical infrastructure protection controls. In anticipation of future USEPA regulatory requirements, the SFPUC has completed operational cybersecurity assessments in alignment with CISA’s cross-sector performance objectives.

The SFPUC has also appointed a Chief Information Security Officer (the “ CISO”), who reports to the SFPUC’s Chief Information Officer. The SFPUC’s cybersecurity team also includes dedicated information technology (IT) and operational technology (OT) staff, as well as third- party specialists who perform a variety of cybersecurity functions. Technology vendors undergo thorough security assessments during procurement, and any procured technology is continuously monitored through the SFPUC Cybersecurity Program.

The SFPUC Cybersecurity Program employs industry- standard cybersecurity solutions and multiple technical controls, including: network segmentation of control environments, secure remote access and domain name system (DNS) protocols, modern authentication methods, secure asset disposal procedures, end user controls, and timely removal of system and facility access for departing SFPUC employees. In addition, the SFPUC has implemented industry-leading technology that provides real -time threat monitoring and response capabilities across all corporate and operational environments. These response capabilities include a cybersecurity incident response plan, incident response services, incident responders, and a cybersecurity insurance policy. The SFPUC’s cybersecurity incident response plan is part of the SFPUC’s continuity of operation plan, which describes the SFPUC’s strategy for ensuring continued delivery of essential services during a disruption in normal operations, and part of the City’s Department of Emergency Management Emergency Support Function 18 program, which details the City’s operational response in the event of a cybersecurity incident.

The SFPUC Cybersecurity Program is periodically and independently reviewed for effectiveness, most recently in October 2025. The next review is scheduled for September, 2026. Pursuant to the SFPUC’s policies, the City Services Auditor (the “ CSA”) and independent cybersecurity auditors perform extensive penetration and vulnerability assessment on the SFPUC’s business and control networks. In addition, the City Services Auditor conducts annual cybersecurity maturity assessments. Like many other large public and private entities, the SFPUC is continually identifying aging infrastructure and managing infrastructure lifecycle. Despite these efforts, however, the SFPUC cannot mitigate all cybersecurity risk, and cybersecurity breaches may damage the SFPUC’s information security systems and cause disruption to the SFPUC’s operations and the provision of SFPUC services. See “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Cybersecurity” in the forepart of this Official Statement.

Climate Change
Impact on City of San Francisco. Numerous scientific studies on global climate change show that, among other effects on the global ecosystem, sea levels will rise, extreme temperatures will become more common, and

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extreme weather events will become more frequent as a result of increasing global temperatures attributable to atmospheric pollution.

The 2018 Fourth National Climate Assessment and the 2023 Fifth National Climate Assessment, each published by the United States Global Change Research Program, find that more frequent and intense extreme weather and climate- related events, as well as changes in average climate conditions, are expected to continue to damage infrastructure, ecosystems and social systems. Both reports state that rising temperatures, sea level rise, and changes in extreme events are expected to increasingly disrupt and damage critical infrastructure and property and regional economies and industries that depend on natural resources and favorable climate conditions. Disruptions could include more frequent and longer -lasting power outages, fuel shortages and service disruptions. Both reports state that the continued increase in the frequency and extent of high -tide flooding due to sea level rise threatens coastal public infrastructure. Both reports also state that expected increases in the severity and frequency of heavy precipitation events will affect inland infrastructure, including access to roads, the viability of bridges and the safety of pipelines.

Sea levels will continue to rise in the future due to the increasing temperature of the oceans causing thermal expansion and growing ocean volume from glaciers and ice caps melting into the ocean. Between 1854 and 2016, the sea level rose about nine inches according to the tidal gauge at Fort Point, a location underneath the Golden Gate Bridge. Weather and tidal patterns, including 100- year or more storms and king tides, may exacerbate the effects of climate-related sea level rise. Coastal areas like San Francisco are at risk of substantial flood damage over time, affecting private development and public infrastructure, including roads, utilities, emergency services, schools, and parks. As a result, the City could lose considerable tax revenues and many residents, businesses, and governmental operations along the waterfront could be displaced. The City may elect to mitigate these effects to maintain its current shoreline and protect critical infrastructure at a potentially significant cost.

Adapting to sea level rise is a key component of the City’s policies. The City and its enterprise departments have been preparing for future sea level rise for many years and have issued a number of public reports. For example, in March 2016, the City released a report entitled “Sea Level Rise Action Plan,” identifying geographic zones at risk of sea level rise and providing a framework for adaptation strategies to confront these risks. That study shows an upper range of end- of-century projections for permanent sea level rise, including the effects of temporary flooding due to a 100- year storm, of up to 108 inches above the 2015 average high tide. To implement this plan, the Mayor’s Sea Level Rise Coordinating Committee, co -chaired by the Planning Department and Office of Resilience and Capital Planning, joined The Port of San Francisco (the “Port ”), the SFPUC and other public agencies in moving several initiatives forward. This included a Citywide Sea Level Rise Vulnerability and Consequences Assessment to identify and evaluate sea level rise impacts across the City and in various neighborhoods that was released in February 2020.

In April 2017, the Working Group of the California Ocean Protection Council Science Advisory Team (in collaboration with several state agencies, including the California Natural Resource Agency, the Governor’s Office of Planning and Research, and the California Energy Commission) published a report that was formally adopted in March 2018, entitled “Rising Seas in California: An Update on Sea Level Rise Science” (the “Sea Level Rise Report”) to provide a new synthesis of the state of science regarding sea level rise. The Sea Level Rise Report provides the basis for State guidance to State and local agencies, entitled “State of California Sea- Level Rise Guidance: 2018 Update” (the “ 2018 Update”). The 2018 Update provides guidance for incorporating sea level rise into design, planning, permitting, construction, investment and other decisions. Among many findings, the Sea Level Rise Report indicates that the effects of sea level rise are already being felt in coastal California with more extensive coastal flooding during storms, exacerbated tidal flooding, and increased coastal erosion. In addition, the report notes that the rate of ice sheet loss from Greenland and Antarctic ice sheets poses a particular risk of sea level rise for the California coastline. An update of both the Sea Level Rise Report and the 2018 Update was adopted by the State of California in 2024. This update, contained in a single document entitled “State of California Sea Level Rise Guidance: 2024 Science & Policy Update,” revised findings regarding best available science and updated guidance to State and local agencies, superseding the 2018 Update. Though high- end projections of sea level rise were reduced based on new science, the fundamental findings of the more recent reports as well as the specifics cited above agreed with those of the previous reports.

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In March 2020, a consortium of State and local agencies, led by the Bay Conservation and Development Commission, released a detailed study entitled, “Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study,” on how sea level rise could alter the Bay Area. The study states that a 48- inch increase in the bay’s water level in coming decades could cause more than 100,000 Bay Area jobs to be relocated, nearly 30,000 lower-income residents to be displaced, and 68,000 acres of ecologically valuable shoreline habitat to be lost. The study further argues that without a far -sighted, nine -county response, the region’s economic and transportation systems could be undermined along with the environment. For example, runways at SFO could largely be under water.

The City has already incorporated site specific adaption plans in the conditions of approval for certain large waterfront development projects, such as the Candlestick/Hunters Point Shipyard, Treasure Island, Pier 70 and Mission Rock projects. Also, the City has partnered with the U.S. Army Corps of Engineers to develop a plan to fortify the Port’s seawall from sea level rise. A draft plan estimates the total cost of that project at $13.5 billion; and, subject to U.S. Army Corps of Engineers and Congressional approval, 65% of the cost would be eligible for federal funding. The City is developing a financing strategy to provide the remaining funds, including using funding from the November 2018 approved Proposition A, authorizing the issuance of up to $425 million in general obligation bonds for repair and improvement projects on the seawall.

Portions of the Bay Area, including San Francisco, are built on fill that was placed over saturated silty clay known as “Bay Mud.” Bay Mud is soft and compressible, and the consolidation of the Bay Mud under the weight of the existing fill is ongoing. A report issued in March 2018 by researchers at the University of California, Berkeley (“UC Berkeley ”) and the University of Arizona suggests that flooding risk from climate change could be exacerbated in the Bay Area due to the sinking or settling of the ground surface, known as subsidence. The study claims that the risk of subsidence is more significant for certain parts of San Francisco built on fill.

Projections of the effects of global climate change on San Francisco are complex and depend on many factors that are outside the City’s control. The various scientific studies that forecast climate change and its adverse effects, including sea level rise and flooding risk, are based on assumptions contained in such studies, but actual events may vary materially. Also, the scientific understanding of climate change and its effects continues to evolve.

Accordingly, the City is unable to forecast when sea level rise or other adverse effects of climate change ( e.g., the occurrence and frequency of 100- year storm events and king tides) will occur. In particular, the City cannot predict the timing or precise magnitude of adverse economic effects, including, without limitation, material adverse effects on the business operations or financial condition of the City and the local economy during the term of the 2026A Bonds. While the effects of climate change may be mitigated by the City’s past and future investment in adaptation strategies, the City can give no assurance about the net effects of those strategies and whether the City will take additional adaptive mitigation measures. If necessary, such additional measures could require significant capital resources.

In September 2017, the San Francisco City Attorney filed a lawsuit on behalf of the People of the State of California in San Francisco Superior Court against the five largest investor -owned oil companies seeking to have the companies pay into an abatement fund to help fund infrastructure for climate change adaptation. Following litigation regarding defendants’ removal of the case to federal court, the City’s case was remanded to and coordinated with similar municipal lawsuits and the State of California’s lawsuit in San Francisco Superior Court in 2024. In June 2024, the San Francisco City Attorney filed the current amended complaint seeking abatement funds, damages, and other remedies. The Superior Court has since held that personal jurisdiction is appropriate over non -resident defendants sued in the City’s case and denied an “anti -SLAPP” motion to strike by one of the defendants. While the City believes that the claims in this lawsuit are meritorious, it can give no assurance regarding whether the lawsuit will be successful and obtain the requested relief from the courts, or contributions to the abatement fund from the defendant oil companies.

Impact on SFPUC Wastewater Enterprise . The impacts of climate change that would most affect the Wastewater Enterprise relate to changing rainfall patterns, sea level rise and rising tides, as well as the ability of governmental agencies to effectively address these impacts across jurisdictions. Existing climate change models show varied results in terms of projected rainfall patterns, making proactive, long- term planning difficult. If changes in rainfall patterns do occur, significant changes in rainfall ( e.g., intensity, duration or frequency or certain combinations thereof) could substantially alter the likelihood of flooding.

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Projected levels for sea level rise and rising tides are expected to result in a backflow (or inflow) of San Francisco Bay water into the sewer system at the lowest weir elevation and increased infiltration due to higher groundwater in coastal areas. In response, the Wastewater Enterprise has implemented, through its capital plan, the installation of backflow mitigation measures at some points where tides may backflow into the system. In addition, sea level rise and rising tides have the potential to adversely impact the viability of the gravity -based sewer lines, and the SFPUC is working collaboratively with various other City agencies on long- term solutions focused on city- wide perimeter protection from sea level rise and rising tides.

In 2016, the SFPUC completed a city- wide flood resilience analysis to characterize the impact of storms, develop a risk -based framework to identify and prioritize investments in projects to reduce or mitigate flooding risks, and confirm the City’s standard design storm through a benefit -cost analysis. This study served as the foundation for prioritizing certain capital investments including projects designed to increase the collection system conveyance capacity in low -lying areas ( i.e., the Folsom Stormwater Improvement Project, the Wawona Area Stormwater Improvement Project and the Lower Alemany Area Stormwater Improvement Project). See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Stormwater Management/Flood Resilience.” In 2017, in conjunction with other City departments and industry experts, the SFPUC developed a suite of programmatic strategies for flood resilience intended to reduce flood risk citywide from storms that exceed the capacity of the SFPUC’s collection system. However, the effect of climate change on future storms will be significant, leading to more powerful storms that exceed the capacity of most urban conveyance systems across the United States, including the SFPUC’s system. Planning for these future storms will require strategies and solutions that extend beyond the SFPUC’s system.

The SFPUC has developed a 100- Year Storm Flood Risk Map that shows parcels in San Francisco where deep and contiguous flooding from storm runoff (rather than from inundation from the San Francisco Bay or Pacific Ocean) is highly likely to occur during a 100- year storm. A “100- year storm” means a storm with a 1% chance of occurring in a given year. The SFPUC used computer modeling that simulated flooding occurring Citywide under a 100-year storm to identify such parcels. The purpose of the flood risk map is to inform existing and future property owners about flood risk on their properties and promote resilience. The flood risk map is based on past hydrology patterns and does not reflect recent developments, such as the study on extreme precipitation in the San Francisco region described above, or future projected hydrology patterns.

The City undertook a unique, first of its kind in the nation climate modeling collaboration between a municipality, climate scientists at Lawrence Berkeley National Laboratory (“LBNL”) and climate consultants at Pathways Climate Institute to create a research team that focused on a better understanding of future precipitation events through climate modeling. Using supercomputing resources at LBNL’s scientific computing center, the research team found that the effect of climate change on future storms is predicted to be significant, leading to more powerful events unleashing substantially more water. The City is transitioning toward efforts that would consolidate and coordinate sea level rise adaptation and overall resilience planning so that City departments can maximize efficiency and the co -benefits of investment dollars. City departments are working together through ClimateSF to improve how the City manages, finances and implements climate resilience projects and/or programs. 2024 Grand Jury Report . The civil grand jury examines the conduct of public business of county government. In San Francisco, the function of the civil grand jury is to investigate the operations of various officers, departments and agencies of the government of the City. On June 11, 2024, a civil grand jury comprised of 19 citizen volunteers issued a report entitled “Come Hell or High Water: Flood Management in a Changing Climate.” In the report, the members noted a number of improvements that the City and its various departments might make to improve climate change planning, solution efficacy, and citywide awareness. The members suggest that greater coordination between different city departments is needed, with greater authority created at the citywide -level, specifically to navigate flooding projects and solutions. Greater transparency of the cost of flooding and climate change is recommended in budgeting, and solutions to finance the costs of climate change projects beyond the use of existing debt financing facilities is noted, amongst other recommendations. While the City is not legally required to implement the members’ recommendations, the SFPUC and the City are considering such recommendations, including which and how to incorporate into future climate change and flooding planning efforts.

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Climate Action Plan
In September 2021, the City adopted a set of emissions reduction targets: achieve net -zero greenhouse gas emissions generated by the City by 2040 and reduce emissions associated with consumption of all goods and services in the City (regardless of where emissions originate) 80% by 2050. In December 2021, former Mayor Breed released the City’s Climate Action Plan (the “ Climate Action Plan ”) detailing the actions needed to accomplish these targets, developed through a multi -agency and stakeholder process led by the San Francisco Environment Department (the “ Environment Department ”). The Climate Action Plan is a roadmap of goals, strategies and actions to achieve emission reductions across six sectors: energy supply, building operations, transportation and land use, housing, responsible production and consumption, and healthy ecosystems. Key strategies include, but are not limited to, provision of 100% carbon- free energy, decarbonization of buildings, and increases in the public transit, active transportation, and vehicle electrification networks. In addition to reducing emissions to zero over the next 20 years, the Climate Action Plan strives to ensure all San Franciscans have the skills, knowledge, and resources to meet future interconnected challenges, including climate change. To do so, the proposed strategies aim to leverage community strengths, advance racial and social equity, and provide critical benefits to the entire community. The Climate Action Plan includes sections on funding and investment, monitoring and reporting. The City also maintains a public -facing reporting mechanism to keep stakeholders and residents informed on progress made against performance metrics laid out in the Climate Action Plan. The Environment Department contracted with the University of California, Berkeley, Center for Law, Energy & the Environment (the “ CLEE”) to assess options for funding the equitable implementation of the Climate Action Plan. CLEE released its report entitled “Funding San Francisco Climate Action” in November 2022.

The SFPUC’s Environmental Commitment

REGULATORY MATTERS
The SFPUC believes that the Wastewater Enterprise is in material compliance with the Porter -Cologne Act and the Clean Water Act (each as described below) . This section summarizes the regulatory framework governing the Wastewater Enterprise and its operations.

History and Background
In 1969, the State adopted the Porter -Cologne Water Quality Act (the “ Porter-Cologne Act”), creating the State’s current legal framework for the protection of water quality. This adoption was followed at the federal level by the Water Pollution Control Act Amendments of 1972 (the “ Clean Water Act”). The Clean Water Act provided an aggressive timetable for eliminating pollution of the nation’s waters and established the basic secondary treatment requirement that 85% of pollutants, as defined in administrative regulations, be removed from sanitary wastewater. The Clean Water Act also required the issuance of discharge permits on a nationwide basis and established a federal grant program for construction of publicly owned wastewater facilities, subsequently replaced by the state revolving fund loan program. Although the EPA has ultimate responsibility for administering the Clean Water Act, many functions have been delegated to the State. The administration of the current loan program and enforcement of regulations are a joint undertaking of the State Water Resources Control Board, the Regional Water Quality Control Board, and EPA Region IX.

Federal and State Clean Water Act Permits
Under the Porter -Cologne Act and the Clean Water Act, the Regional Water Quality Control Board administers water pollution control programs. The EPA and the Regional Water Quality Control Board issue discharge permits under Section 402 of the Clean Water Act, which establishes the National Pollutant Discharge Elimination System (“ NPDES”) permit system. These permits, issued for a five -year period subject to extensions, are also wastewater discharge requirements for the purposes of the Porter -Cologne Act and apply to discharges from the SFPUC’s treatment plants and combined sewer discharge facilities.

A small portion of the Wastewater Enterprise system within San Francisco, representing less than 3% of the City’s total sewer mileage, consists of separate storm and sanitary sewers for initial collection and conveyance that

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ultimately connect to the combined sewage and stormwater system. This portion of the system is regulated under the State General Permit for Small Municipal Separate Storm Sewer Systems (MS4) (NPDES Permit No. CAS000004) and the State Waste Discharge Requirements for Sanitary Sewer Systems (Order No. 2006 -0003-DWQ).

The Wastewater Enterprise’s combined sewer system is regulated under two wastewater NPDES permits:
the 2013 Bayside Permit (NPDES Permit No. CA0037664; issued by the Regional Water Quality Control Board), covering the Southeast Treatment Plant, the North Point Facility and other bayside facilities that discharge into the San Francisco Bay; and the 2019 Oceanside Permit (NPDES Permit No. CA0037681; issued jointly by the Regional Water Quality Control Board and EPA Region IX), covering the Oceanside Treatment Plant discharges and other westside facilities that discharge into the Pacific Ocean. The City previously appealed two provisions of the 2019 Oceanside Permit that impose generic prohibitions against causing or contributing to a violation of water quality standards. In March 2025, the United States Supreme Court ruled on the appeals in the City’s favor, holding that the EPA is not authorized to include “end -result” provisions in NPDES permits that purport to hold dischargers responsible for the quality of the receiving water.

In February 2016, the EPA and the Regional Water Quality Control Board initiated an investigation of the SFPUC’s operations of the City’s combined sewer system with a particular focus on the SFPUC’s operations during wet weather conditions. In October 2019, the EPA issued a Notice of Violation (“ NOV”) to San Francisco, but the NOV did not impose any penalties or require any specific corrective actions. The City Attorney’s Office, the SFPUC, the Regional Water Quality Control Board and EPA have continued to discuss the allegations. In November 2021, the SFPUC and the Regional Water Quality Control Board entered into a negotiated settlement that resolves the Regional Water Quality Control Board’s claims relating to flooding in low -lying areas. Under the settlement the SFPUC is required to construct three flood resilience capital projects already included in the Wastewater Enterprise capital improvement plan ( i.e., the Folsom Stormwater Improvement Project, the Lower Alemany Area Stormwater Improvement Project, and the completed Wawona Area Stormwater Improvement Project), at a currently budgeted cost of over $800 million, and to implement specified storm response activities. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Stormwater Management/Flood Resilience.” The EPA’s National Enforcement Investigations Center conducted an inspection of the SFPUC’s facilities in early 2022 and issued an inspection report in June 2022. The SFPUC responded to the report within the required timeframe.

In addition, in April 2023, the City and the Regional Water Quality Control Board finalized a settlement to pay approximately $236,500 to resolve administrative civil liability claims regarding alleged permit violations that occurred from approximately October 2013 to October 2021. Under the settlement, SFPUC paid half of the full amount towards a supplemental environmental project.

On May 1, 2024, the EPA and the Regional Water Quality Control Board filed a lawsuit alleging Clean Water Act violations. The regulators allege that combined sewage discharges from the Bayside system from November 2013 to the present are discharging pollutants that cause violations of applicable water quality standards and that an injunction is required to prevent any further violations. The regulators further allege violations of the Oceanside and Bayside discharge permits based on failure to perform condition assessments, inspections, cleaning, repair and replacement and performance monitoring requirements for various components of the combined sewer system. In March 2025, after the United States Supreme Court ruled in the City’s favor on its permit appeal, as described above, the regulators filed an amended complaint, eliminating the allegations that discharges from the Bayside system were causing a violation of the applicable water quality standards and that an injunction was required. The City is vigorously defending the action. The parties have entered into a court -approved stipulation staying the litigation so that the parties can participate in private mediation. At this time, the SFPUC cannot determine the costs associated with resolving the EPA and the Regional Water Quality Control Board’s allegations or the extent to which the pending action will result in penalties or affect the SFPUC’s current operations or the Wastewater Enterprise’s short-term and long-term capital improvement plans.

In a letter dated March 6, 2024, San Francisco Baykeeper (“Baykeeper”) provided the City with a notice regarding alleged violations of the Clean Water Act and the discharge permit for the Bayside combined sewer facilities (the “Bayside Permit”). The letter alleges that historical and ongoing discharges of pollutants in and near Mission Channel, Islais Channel, and other parts of the San Francisco Bay are occurring in violation of the Clean Water Act and the Bayside Permit. In May 2024, Baykeeper filed a cit izen suit enforcement action alleging

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violations largely consistent with its notice letter. Baykeeper has intervened in the lawsuit filed by the EPA and the Regional Water Quality Control Board. The suit seeks (i) penalties and injunctive relief to prevent further alleged violations and (ii) Baykeeper’s costs, including attorneys’ and experts’ fees. The City is vigorously defending the action. Baykeeper has joined the court-approved stipulation staying the litigation so that the parties can participate in private mediation. At this time, to the extent Baykeeper has claims unique from the EPA and the Regional Water Quality Control Board, SFPUC does not expect costs associated with resolving Baykeeper’s allegations will have significant effects on SFPUC’s current operations or the Wastewater Enterprise’s short -term and long -term capital improvement plans.

During severe storm events in San Francisco, properties in low -lying areas with structures built on or near land that was originally channels or bays may experience surface flooding or backups through their building’s internal plumbing fixtures. In the last ten years, severe rainstorms caused flooding in certain low -lying areas and resulted in some property damage in 2017, 2021, the end of 2022, and the beginning of 2023. The storm events at the end of 2022 and the beginning of 2023 have given rise to over 100 claims and seven individual lawsuits with private property- owner plaintiffs. The SFPUC answered two lawsuits covering a majority of the plaintiffs on December 19, 2023. The SFPUC is vigorously defending all of these lawsuits. At this time, the SFPUC cannot estimate the costs associated with defending and/or resolving the flooding plaintiffs’ allegations.

Combined Sewer Overflow Control Policy
To address the unique characteristics of combined sewer systems, the EPA adopted the Combined Sewer Overflow Control Policy (the “ CSO Control Policy ”) in 1994. The CSO Control Policy established a consistent national approach for controlling discharges from combined sewer overflow outfalls to the nation’s water, and has since been incorporated into the Clean Water Act by the Wet Weather Water Quality Act of 2000. That approach includes the identification of nine minimum controls (“ Nine Minimum Controls ”) that combined sewer systems can implement to reduce water quality impacts from their combined sewer discharges.

Consistent with the CSO Control Policy requirements and the Nine Minimum Controls, the SFPUC has undertaken decades of planning and implemented a multi -billion dollar long-term control plan to reduce and control its combined sewer discharges. This plan resulted in, among other improvements, substantial increases in treatment and storage capacity, including construction of transport/storage boxes, which can hold millions of gallons of flows.

These improvements resulted in substantial reductions in the annual average number of combined sewer discharges from the collection system. The SFPUC continues to maintain and operate the combined sewer system consistent with the CSO Control Policy requirements and the Nine Minimum Controls, including collecting discharge monitoring data.

The SFPUC’s discharge permits require the preparation of reports analyzing the efficacy of the system’s wet weather operations and the compliance with the Nine Minimum Controls.

Stormwater Regulations
In 1987, the Clean Water Act was revised to more effectively address pollution caused by stormwater runoff. The regulations require stormwater management plans for municipalities and controls on certain construction sites and other industries. Urban areas with combined sewers, such as most of San Francisco, are exempt from such regulations. However, because a small portion of San Francisco is served by separate storm sewer systems, the permit for small Municipal Separate Storm Sewer System (“ MS4”) (NPDES Permit No. CAS000004) issued by the State Water Resources Control Board regulates the stormwater discharge from the SFPUC’s separate storm sewer systems. The SFPUC operates a stormwater management program that complies with the requirements of the MS4 permit.

Regulatory Trends
Regulatory developments at the State and federal level, as well as ongoing permit reissuance activities, may increase operations costs and capital needs of the Wastewater Enterprise and may have an effect on the Wastewater Enterprise operations and its revenues. In the future, additional contaminants of emerging concern will likely be

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identified, and additional requirements for biosolids or effluent may be developed as improved analytical techniques and treatment technologies and methodologies become available. Additional source control measures, public education and outreach, and additional or advanced treatment processes may be necessary to achieve compliance.

The SFPUC is actively engaged with regulatory officials and the public in the development of these regulatory matters.

These topics and their possible effect on the Wastewater Enterprise are briefly described below:

Impaired Water Bodies and Total Maximum Daily Loads . The Clean Water Act requires states to identify all water bodies that do not achieve designated water quality standards or objectives. Such water bodies are designated as “impaired,” and states are required to identify all sources contributing to the impairment under the Total Maximum Daily Load (“ TMDL”) program. States are required to designate wasteload allocations to each contributing point source, such as the SFPUC discharges, in order to promote the recovery of the water body.

Central and lower San Francisco Bay are currently listed as “impaired” for a number of organic and inorganic pollutants, as well as invasive species and trash. The Regional Water Quality Control Board has completed San Francisco Bay TMDLs for mercury and polychlorinated biphenyl (“ PCBs”) and has issued a fecal indicator bacteria TMDL for San Francisco Bay beaches.

The San Francisco Bay mercury and PCBs TMDLs are implemented through a group watershed permit (Order No. R2 -2020038) that applies to all municipal, industrial and stormwater discharges to San Francisco Bay.

The watershed permit contains effluent limitations for mercury and PCB discharges from the Southeast Treatment Plant with which the SFPUC currently complies.

Contaminated Bay Sediments . California Water Code, Division 7, Chapter 5.6, established a program to assess sediment contamination of the State’s enclosed bays and estuaries. Known as the Bay Protection and Toxic Cleanup Program, the focus of this effort was to identify contaminated sediments with elevated levels of toxins.

In 1999, a Statewide plan identified Mission Channel and Islais Channel as high priority toxic hot spots.

For Mission Channel, the plan included a preliminary estimate of investigation and study costs at $1 million, remediation and follow -up monitoring ranging from $0.8 to $1.8 million, and possible sewer system structural changes up to $75 million. For Islais Channel, the plan included a preliminary estimate of investigation and study costs at $1 million, remediation and follow -up monitoring ranging from $0.8 to $5.2 million, and possible sewer system structural changes up to $75 million. Such estimated costs were developed by the Regional Water Quality Control Board and State Water Resources Control Board in 1998 and 1999. The SFPUC provided comments and data studies disputing both the extent of contamination in the channels and any asserted causal relationship to SFPUC activities. The plan is not self -executing, and requires further regulatory action by the Regional Water Quality Control Board, which has indicated that contaminated sediment issues will be addressed through the TMDL analysis and implementation programs mentioned above. In 2002, both Mission Channel and Islais Channel were added to the Clean Water Act 303(d) list of water quality limited segments ( i.e., impaired waterways). A TMDL (or related action) must be completed for the listed waterways. Pursuant to a directive issued in June 2023, the Regional Water Quality Control Board is requiring the SFPUC to conduct an investigation to determine whether Mission Channel and Islais Channel remain impaired, or whether they may be removed from the impaired waters list. The SFPUC disputes the extent of the contamination in the channels and any causal relationship to SFPUC activities.

Nevertheless, the SFPUC is complying with the directive and will actively participate in the development of any TMDLs for such areas.

The 1999 Statewide plan also identified Central Basin (adjacent to the San Francisco Bayside shoreline) as a moderate priority toxic hot spot, but did not identify investigation or remediation costs (costs were only developed for the high priority sites). Central Basin has also been placed on the Clean Water Act 303(d) list of water quality limited segments. To date, the SFPUC has not been issued any directives relating to the Central Basin. The SFPUC disputes any causal relationship to SFPUC activities and will actively participate in the development of any TMDLs for such areas.

CERCLA. The EPA has listed Yosemite Slough as a “Superfund” site under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“ CERCLA”). The site (which lies adjacent to Hunters Point and the former United States Navy Shipyard) is approximately 1,600 feet long and 400

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feet wide, and depending on tide, is either a mudflat or shallow submerged waterway. Studies have been conducted since the 1990s to better understand the nature of the sediments and contamination at the site, and to develop a remediation plan for the removal of such material. The primary contaminants of concern are PCBs and lead. In 2013, the EPA estimated the cost for site remediation at $15.5 million on a present value basis, but the SFPUC can give no assurance whether such amount is or will be the final clean- up cost estimate as such amount is subject to the completion of additional studies and the EPA’s adoption of a final remediation plan. In 2016, the EPA determined that additional studies were required to develop the cleanup plan, and those studies are expected to be substantially completed in 2026. The EPA named the City a potentially responsible party under CERCLA for the cleanup because of the role the City’s combined sewer system may have played in transporting contaminants to the slough. The City, along with other potentially responsible parties, is participating in a voluntary nonbinding mediation to allocate financial responsibility for the cleanup. The SFPUC cannot reasonably predict whether or to what extent it may be financially responsible for remediation of the contamination, or whether such cleanup obligations will have any adverse impact on the financial condition of the Wastewater Enterprise or sewer system operations.

Pursuant to GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, the Wastewater Enterprise reported $6.4 million and $6.1 million in pollution remediation liability as of June 30, 2024, and June 30, 2025, respectively.

Considering CERCLA, the SFPUC makes best efforts to address the impacts of Wastewater Enterprise outputs on natural resources, including impacts from contaminants appropriately or illegally discharged into sewers and whether those contaminants remain in biosolids end-product.

Contaminants of Emerging Concern . Contaminants of emerging concern include alkyl phenols, endocrine disrupting chemicals, flame retardants, hormones, personal care products, pharmaceuticals, steroids, human- made chemicals such as perfluoroalkyl substances (PFAS) and perfluorooctane sulfonate (PFOS), microplastics and pesticides. Pharmaceuticals typically include prescription and over -the-counter therapeutic drugs for both human and veterinary treatment. Personal care products typically include soaps, fragrances and cosmetics. Secondary treatment facilities remove some of these contaminants from discharges, even though they are not specifically designed for this purpose. Currently no water quality standards exist for most of these compounds, therefore, the SFPUC permits do not contain effluent limitations for them. The SFPUC may, however, potentially face future liability relating to its discharges and biosolids that contain such contaminants.

Nutrient Control for the Bayside . San Francisco Bay has long been recognized as a nutrient -enriched estuary; however, until recently, it had not experienced negative effects of over -enrichment. Changes recently observed in San Francisco Bay indicate that its resilience to the effects of nutrient enrichment may be declining. In response to these changes, the Regional Water Quality Control Board issued a regional permit (NPDES No.

CA0038873) in 2014 requiring all municipal dischargers to the San Francisco Bay monitor and report nutrient discharges. The Regional Water Quality Control Board re -issued this permit in 2019 and stated its intent to consider establishing effluent limitations in future permits to prevent further increases in nutrient loads from municipal wastewater treatment plants. In 2022, San Francisco Bay experienced a very large algal bloom that resulted in significant fish die -offs. Monitoring of this bloom indicated that, while nitrogen discharges from municipal wastewater treatment plants did not cause the bloom, they contributed to the size and duration. In response to this bloom, in 2024, the San Francisco Bay Regional Water Quality Control Board issued a revised regional permit, which became effective on October 1, 2024, with requirements that will ultimately necessitate substantially reducing nitrogen loads from municipal wastewater treatment plants, including the Southeast Treatment Plant. SFPUC is planning and will design and construct new infrastructure to reduce nutrients in the Southeast Treatment Plant’s effluent. The most prominent project in SFPUC’s 10- year capital plan is the Southeast Treatment Plant Nutrient Reduction Project, currently budgeted at $1.47 billion. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Treatment Facilities – Southeast Treatment Plant Nutrient Reduction Project .” SFPUC is also continuing to work closely with a coalition of Bay Area wastewater utilities, regulators, and scientists on long -term strategies to meet potential nitrogen reduction requirements as research and regulations evolve.

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Other Regulatory Agencies with Jurisdiction Over the Wastewater Enterprise Other regulatory agencies with approval or oversight responsibilities over the siting, construction or operational impacts of the Wastewater Enterprise on air, water and natural resources include the Bay Area Air Quality Management District, the Bay Conservation and Development Commission, the California Coastal Commission, the California Department of Toxic Substances Control, the State Lands Commission, the California Department of Public Health, the National Marine Fisheries Service, the United States Fish and Wildlife Service, the California Department of Fish and Wildlife, and the U.S. Army Corps of Engineers.

Other Laws Affecting the Wastewater Enterprise
As a public agency, the SFPUC’s actions must be consistent with CEQA and, where federal approvals or funding is involved, NEPA. The federal Clean Air Act and the California Clean Air Act of 1988 also regulate emissions from the treatment facilities. All of the SFPUC’s treatment facilities meet present Bay Area Air Quality Management District standards.

WASTEWATER ENTERPRISE CAPITAL PROGRAM
Capital and Financial Planning Process
The SFPUC’s long -term capital and financial planning is performed on an annual rolling 10- year forward looking basis. The SFPUC prepares a 10- year capital plan for each of its enterprises, as required by the Charter, which serves as the basis for the development of the annual 10- year financial plan. Proposed long- term capital programs, projects and investments, and related costs are included in the 10- year financial plan. Consistent with the Charter, updates to the 10- year capital plan and 10 -year financial plan are generally reviewed at least annually and adopted by the Commission each February. The 10 -year financial plan provides estimated rate impacts of projected capital and operating spending and assures compliance with the SFPUC’s adopted financial policies, including its debt service coverage and fund balance reserve policy targets.

The 10- year capital plan is not a budget and is not “appropriated” like a budget. The annual capital programs can be revised during the development of the budget and final projects, costs and totals for specific capital improvements to be financed can change. Consequently, even though the annual budgets passed are based on the 10- year capital plan, they may occasionally differ from it.

The Wastewater Enterprise’s 10 -year capital plan for Fiscal Years 2026 -27 to 2035- 36, adopted by the Commission on February 10, 2026 (the “ 2027 Capital Plan ”), totals approximately $5.916 billion, which includes approximately $527.6 million budgeted for Fiscal Year 2026- 27. See “FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM.” The 2027 Capital Plan includes projects in the following categories, each of which is further described below: (i) the SSIP; (ii) Renewal and Replacement; and (iii) Wastewater Facilities and Infrastructure.

The 2027 Capital Plan reflects a modest reduction from the prior ten- year capital plan of approximately 2%, decreasing from approximately $6.040 billion to approximately $5.916 billion. Unlike the Water Enterprise and the Power Enterprise, where capital plan reductions primarily reflect strategic choices to defer discretionary improvements in favor of rate affordability, the Wastewater Enterprise capital plan reduction represents the absolute minimum achievable while maintaining regulatory compliance and system reliability. The near -flat capital investment, compared to the prior ten- year capital plan, masks the extraordinary difficulty of achieving even marginal reductions considering that most projects address legally- mandated requirements or prevent unacceptable risks to public health and environmental protection.

Sewer System Improvement Program
Program Summary. The SSIP was initiated as a citywide investment to upgrade the SFPUC’s wastewater infrastructure to ensure a reliable, sustainable, and seismically safe sewer system. The SSIP contains a series of major capital improvement projects that are necessary to maintain the City’s combined sewage and stormwater

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system in a state of good repair, as well as to continue meeting Commission -endorsed goals and levels of service.

The Commission’s original authorization of the SSIP in August 2012 contemplated a three -phase implementation approach over a 20-year period to manage rate impacts, considered construction sequencing impacts, and maintained existing operations and permit compliance. In 2012, the highest priority and best -defined projects, which focused on maintaining regulatory compliance, enhancing process reliability and redundancy, implementing pilot green infrastructure projects, improving plant odor control, and replacing existing biosolids and headworks facilities with state-of-the-art technology, were included in the first phase of the SSIP (“ Phase 1 Projects”). The SFPUC has since transitioned from implementing the original three -phase approach over a 20 -year period to completing the SSIP Phase 1 Projects and initiating projects originally identified for the second and third phases of the SSIP, as well as projects that are necessary to comply with the latest regulatory requirements (referred to herein as the “Other SSIP Projects”) based on priority, schedule, and affordability, as part of its rolling 10- year capital plan. The current budget for Phase 1 Projects in the 2027 Capital Plan is approximately $125.6 million and the current budget for Other SSIP Projects in the 2027 Capital Plan is approximately $4.016 billion, for a total of approximately $4.141 billion.

Program Objectives and Goals. The SSIP is designed to address infrastructure challenges and needs facing the Wastewater Enterprise, maximize system reliability and flexibility, improve operational and seismic reliability, and promote current and future regulatory compliance. The SSIP development considers environmental benefits, sustainability, and community benefits in addressing long- term wastewater needs. The program goals for the SSIP include the following: (1) maintain a compliant, reliable, resilient and flexible system that can respond to catastrophic events; (2) integrate grey and green infrastructure to manage stormwater and minimize flooding; (3) provide benefits to impacted communities; (4) modify the system to adapt to climate change; (5) achieve economic and environmental sustainability; and (6) maintain ratepayer affordability.

Program Scope. The SSIP is further separated into four major categories: (i) Program Management, which make up approximately $121.5 million of the 2027 Capital Plan, (ii) Treatment Facilities, which make up approximately $2.563 billion of the 2027 Capital Plan, (iii) Sewer/Collection System, which make up approximately $741.4 million of the 2027 Capital Plan, and (iv) Stormwater Management/Flood Resilience, which make up approximately $715.2 million of the 2027 Capital Plan. Each category is further described below.

Program Management . This category includes overall program management support for SSIP capital projects. This category includes support for securing low -interest loans and grants, including SRF loans and WIFIA loans (see “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “ – Water Infrastructure Finance and Innovation Act Loans”). Furthermore, this category includes support for continuous internal process improvements in an effort to achieve better efficiencies and outcomes with project delivery, as well as for asset management integration and regulatory compliance.

Treatment Facilities . This category focuses mainly on improvements to the treatment plants and wet - weather facility. Treatment plant projects provide improvements at the Southeast Treatment Plant, Oceanside Treatment Plant and North Point Facility that are aimed at updating existing infrastructure and technologies, increasing seismic and operational reliability, and reducing odors, noise, visual and other negative public impacts.

These projects also help maintain regulatory compliance by ensuring continued and reliable asset performance.

A majority of the Phase 1 Projects are occurring at the Southeast Treatment Plant to upgrade the buildings and systems that were originally constructed in the 1950s (for example, see “ – Biosolids Digester Facilities Project” below). There are also other Phase 1 Projects focused on liquid treatment and basic infrastructure, including construction of a new all -weather headworks facility (see “– SEP New Headworks (Grit) Replacement Project ” below), improvements to existing clarifiers, facility -wide distributed control systems, power feed and switchgear, reliability improvements to the Westside Pump Station, and digester gas utilization upgrades to the Oceanside Water Pollution Control Plant. A majority of the SSIP Phase 1 Projects at the treatment facilities have been fully appropriated, with the exception of a few projects. Other SSIP Projects have been initiated to provide various process improvements to the Southeast Treatment Plant, Oceanside Treatment Plant and North Point Facility, including the Southeast Treatment Plant Nutrient Reduction Project.

In addition to the work at Southeast Treatment Plant, there are also Phase 1 Projects being planned or implemented to improve the seismic, electrical and general reliability to both the Oceanside Treatment Plant and the

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North Point Facility. Other SSIP Projects have also been initiated to provide various process improvements to the Southeast Treatment Plant, Oceanside Treatment Plant and North Point Facility.

Significant projects within the treatment facilities category include the following:
• Biosolids Digester Facilities Project. This active project is the largest component of the Phase 1 Projects, and will replace and relocate the SFPUC’s existing solids treatment facilities at the Southeast Treatment Plant with more reliable, efficient, and modern technologies and facilities. The Biosolids Digester Facilities Project, which consists of new digester and solids handling facilities to replace the existing facilities at the Southeast Treatment Plant, will include more modern treatment processes designed to produce “Class A” biosolids. Biosolids treatment processes are expected to include solids thickening, screening, dewatering, thermal hydrolysis pretreatment, digestion, gas handling, biogas utilization, and odor control. The Biosolids Digester Facilities Project is scheduled to be completed in 2029 and, as of June 2026, construction is approximately 79% completed. The construction work packages for all the major biosolids facilities have been bid and awarded, and the construction of the five digester vessels and major facilities is in its final stages. Mechanical, electrical, and plumbing installations are underway in the digester basement, solids pretreatment and biosolids dewatering building, and supporting facilities and pipe galleries. Facility start-up and commissioning plans are currently under development. The original budget for the Biosolids Digester Facilities Project, approved by the Commission in August 2012, was $1.681 billion; however, the budget for the project has significantly increased to $2.837 billion, with $92.9 million in the 2027 Capital Plan. In mid- budget cycles for Fiscal Years 2025 -2034, an additional $165 million budget was added to this project to fund the design- build contract for the biogas utilization scope of work, which was anticipated to be funded separately. Previously, the SFPUC had pursued a public -private-partnership (“P3”) delivery process to fund and construct the biogas utilization scope. Due to tax reasons, however, SFPUC had to abandon the P3 approach, and instead issued a design -build contract to perform the work. The design package for the biogas facilities under the design-build contract was submitted, and construction is underway with the installation of underground utilities and electrical conduits. The SFPUC anticipates that the biogas utilization facility will be ready for operation in alignment with the start- up and commissioning of the other biosolids digester facilities; however, the SFPUC can provide no assurance with respect to the ultimate completion date for the entire project. While the project schedule remains unchanged, the budget increases, prior to funding the biogas utilization scope, were due in part to complex site and construction conditions, volatile commodity costs, supply chain issues related to the COVID -19 pandemic, and a limited pool of potential and qualified bidders on contracts. The SFPUC can provide no assurance that the total cost of the Biosolids Digester Facilities Project will not be higher than, or that the ultimate completion date of the project will not be later than, currently estimated. See also “RISK FACTORS – Risks Relating to Wastewater Enterprise Facilities and Operations – Construction Related Risks” and “– Risks Relating to Financial Operations – Cost of Capital Program Projects; Timely Completion of Capital Program Projects ” in the forepart of this Official Statement. The SFPUC has secured an SRF loan in the amount of $132 million, the BDFP WIFIA Loan in the amount of up to approximately $699 million, and the STPI WIFIA Loan in the amount of up to approximately $514 million for a portion of the project. The SRF loan, the BDFP WIFIA Loan and the STPI WIFIA Loan are fully drawn. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “ – Water Infrastructure Finance and Innovation Act Loans.” A portion of the proceeds of the 2026A Bonds are expected to be applied to finance a portion of the costs of the Biosolids Digester Facilities Project. See “ PLAN OF FINANCE” in the forepart of this Official Statement.
• Southeast Treatment Plant Nutrient Reduction Project . This project is in the planning phase and is intended to reduce the amount of nutrients, specifically total inorganic nitrogen, discharged in the effluent from the Southeast Treatment Plant into the San Francisco Bay. Reducing nutrient loading into San Francisco Bay is one of the most pressing water quality issues facing the Bay Area. The Southeast Treatment Plant Nutrient Reduction Project is needed to meet expected regulatory requirements and to help meet the regulatory compliance level of service goals for the Wastewater Enterprise. Based on preliminary project scoping efforts, the proposed project assumes maximizing the use and/or retrofit of existing infrastructure in an effort to reduce costs. This proposed project includes all phases of work (planning, environmental review, design, construction and facility start -up and commissioning), and will be implemented using a progressive -design-build project delivery method. The current project budget is estimated at approximately $1.470 billion, with approximately $1.419 billion in the 2027 Capital Plan. However, the SFPUC can provide no assurance that the total cost of the project will not be higher than currently estimated.

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• SEP New Headworks (Grit) Replacement Project . The new 250 mgd headworks project at the Southeast Treatment Plant (the “ SEP New Headworks (Grit) Replacement Project ”) consists of the following:
new influent junction structure and influent monitoring; new primary influent distribution structure; new bar screens, washer-compacters and screenings handling facility; new grit basins; grit washers and grit handling facility; a new odor control facility; two new primary substations; electrical, instrumentation and control rooms/building; demolition of the two existing headworks facilities; rehabilitation of the existing Southeast Lift Station; and upgrades to the Bruce Flynn Pump Station. The purpose of the project is to meet new design seismic standards and achieve a higher level of debris, screening, and grit removal. The project reach construction final completion as of March 2026, and project closeout is anticipated in 2027. The total current project budget is $707.8 million, all of which has been previously appropriated; however, the SFPUC can provide no assurance that the total cost of the project will not be higher than currently estimated until the project is closed out. The SFPUC has secured an SRF loan in the amount of approximately $112 million and the STPI WIFIA Loan in the amount of up to approximately $514 million for a portion of the project. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Water Infrastructure Finance and Innovation Act Loans” and “ – Parity Loans.” • Southeast Bay Outfall and Southeast Treatment Plant Booster Station Replacement . This project, expected to commence in Fiscal Year 2028 -29, will evaluate and recommend long -term solutions for the existing and aging Southeast Bay Outfall and the associated booster station. The proposed project assumes construction of a new booster station and a new outfall. The Southeast Bay Outfall is a critical asset that conveys final effluent from the Southeast Treatment Plant to the San Francisco Bay. Currently, there are two projects underway to extend the life of the existing Southeast Bay Outfall, and lessons learned from the existing projects will inform this proposed project. This project will also involve coordination with the City and align with the City’s waterfront adaptation plans for the San Francisco Bay and the Southeast Treatment Plant Nutrient Reduction Project described above. See also “THE WASTEWATER ENTERPRISE – Climate Change – Impact on City of San Francisco.” This proposed project includes all phases of work, planning, environmental review, right -of-way, design, construction contract procurement, construction, and closeout. The current project budget is estimated at approximately $2.0 billion, with approximately $154.1 million in the 2027 Capital Plan. This project has not yet been initiated, and the construction phase is expected to begin outside of the 2027 Capital Plan.

Sewer/Collection System. This category includes projects focused on increasing the reliability of the sewer system and/or increasing the operational flexibility to collect and convey combined sewage to the treatment plants.

The wastewater assets covered in this category include sewers, conveyance pump stations and force mains, transport/storage boxes, and combined sewer discharge outfall structures. By continuing to maintain the collection system assets in a state of good repair, these projects will also ensure continued current and future regulatory compliance, including continued implementation of Nine Minimum Controls, such as maximizing use of the collection system for storage and maximizing flows to the treatment plant. In addition, projects are prioritized to address the reliability of critical force mains that serve as an artery to convey combined sewage to the treatment plants. The collection system projects also include interdepartmental projects that capture sewer improvement opportunities arising from capital projects initiated by other City agencies.

Stormwater Management/Flood Resilience. This category includes projects focused on stormwater management and flood resilience, including increasing conveyance capacity and improving flood resilience in low - lying areas. Phase 1 Projects in this category included planning- level grey infrastructure project assessments and evaluation of green infrastructure through implementation of low -impact design projects in various areas throughout San Francisco, which have been mostly completed. These efforts to develop green and grey solutions to address stormwater management continues with new projects categorized as Other SSIP Projects. Since no sewer system, including the City’s sewer system, can be designed to manage all stormwater in all storms, the SFPUC encourages property owners to obtain flood insurance and provides other resources, such as floodwater grants that offer up to $100,000 to eligible property owners to help protect their properties against flooding during heavy rainstorms.

Specific improvements for the collection system have been prioritized through a strategy of balancing the needs of the collection system for system reliability and stormwater management. Project prioritization and phasing was guided by the Commission- endorsed levels of service, the timing of critical needs, and opportunities for capital investments.

Significant projects within the stormwater management/flood resilience category include the following:

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• Folsom Stormwater Improvement Project (Phase 1 and 2) . This is an active project that includes the construction of approximately 3,500 linear foot, 12- foot internal diameter tunnel from the vicinity of Alameda/Treat Streets to the vicinity of 7th/Berry Streets, and the construction of nearly 12,500 linear feet of sewer pipes to divert wastewater flows, including large volumes of stormwater during heavy rains, towards the new tunnel infrastructure. The majority of the project is currently in the design or procurement phases, and the first package of small diameter work has completed construction. Recent cost increases for the project, as reflected in the 2025 and 2026 Capital Plans, reflect higher design costs and anticipated construction durations due to added complexity of tunneling, coordination with the California Department of Transportation, and large sewer boxes work in congested city streets. The total current anticipated project budget for Phase 1, which covers the project through the design phase, is approximately $39.9 million, all of which has been previously appropriated, and the total current anticipated project budget for Phase 2, which covers the construction phase, is approximately $402.5 million, with approximately $270.6 million in the 2027 Capital Plan. However, contracts for the project have not yet been awarded, and therefore the SFPUC can provide no assurance that the total cost of the project will not increase or that the timeline will not be extended. See “RISK FACTORS – Risks Relating to Wastewater Enterprise Facilities and Operations – Construction Related Risks” in the forepart of this Official Statement. • Lower Alemany Area Stormwater Improvements Project . This is an active project that includes the construction of a 10-foot diameter underground pipe, from Stoneybrook Avenue to Industrial Street, and designed to carry stormwater away from the lower Alemany area and to reduce the frequency of flooding in the area. This project is currently in the procurement phase. The total current anticipated project budget is approximately $364.1 million, with approximately $250.6 million in the 2027 Capital Plan. However, contracts for the project have not yet been awarded, and therefore the SFPUC can provide no assurance that the total cost of the project will not increase or that the timeline will not be extended. See “RISK FACTORS – Risks Relating to Wastewater Enterprise Facilities and Operations – Construction Related Risks” in the forepart of this Official Statement.

The SFPUC has entered into an SRF Loan to provide partial funding for the Folsom Stormwater Improvement Project, and has secured the Project 1 WIFIA Loan to finance a portion of both of these projects as well as other projects. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “ – Water Infrastructure Finance and Innovation Act Loans.”
In 2024, the SFPUC also completed the Wawona Area Stormwater Improvement Project. The Wawona Area Stormwater Improvement Project was a $26.9 million project designed to increase the conveyance capacity at the intersection of 15th Avenue and Wawona Street to reduce the frequency of flooding in the area, through the installation of a new sewer pipe and replacement of existing water transmission and distribution mains.

Treasure Island Capital Improvements
The Wastewater Enterprise currently operates wastewater treatment facilities on Treasure Island and Yerba Buena Island through agreements with TIDA. The SFPUC will not acquire TIDA’s existing facilities, but the SFPUC is planning to expand its service area to include Treasure Island and Yerba Buena Island utilizing newly- constructed, SFPUC -owned infrastructure. See “THE WASTEWATER ENTERPRISE – Wastewater Treatment – Contract Services.” The Treasure Island Water Resource Recovery Facility will provide reliable service for Treasure Island and Yerba Buena Island residents and meet the recycled water demands of future redevelopment on Treasure Island and Yerba Buena Island. The project is further described below. Treasure Island capital improvement projects have been fully appropriated.

Treasure Island Water Resource Recovery Facility . This is an active project intended to construct new facilities that provide tertiary treatment and wetlands to achieve dry weather flow capacity of at least 1.3 mgd of average dry -weather flow and a peak wet -weather flow of 3.9 mgd. The new facilities are to be constructed immediately adjacent to and south of the existing facility. The preliminary treatment would remove rags, large objects, and grit. The secondary treatment process would use biological nutri ent removal reactors/basins to remove biochemical oxygen demand and suspended solids. The membrane bioreactor is a combination of suspended growth biological treatment system (activated sludge) in combination with membrane filtration equipment which is used to perform solid- liquid separation. Secondary- treated effluent will be disinfected via a series of UV trains. The disinfected secondary- treated effluent would pass through constructed wetlands, and then be discharged into the

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adjacent stormwater outfall pipe for discharge to San Francisco Bay. Solids generated in the treatment processes would be thickened and transported to the Oceanside Treatment Plant for digestion. The resulting biosolids would be transported to suitable locations for land application, to a facility to process biosolids into a liquid fertilizer, and to a facility to be processed into biosolids compost. In addition, the new facility will be designed to achieve the disinfected tertiary treatment. Approximately 0.43 to 0.98 mgd of recycled water is expected to be diverted from the new facility for landscape irrigation, urban farming, and toilet flushing. The remainder of the disinfected effluent from the treatment plant would be directed to the wetlands and ultimately to receiving water. The SFPUC awarded a design-build contract to build the Treasure Island Water Resource Recovery Facility in 2022. The project is now in construction and anticipated to be completed in Winter 2026. The total current anticipated project budget is approximately $222.2 million and has been fully appropriated. The SFPUC has applied for an SRF loan and has secured the Project 1 WIFIA Loan for a portion of the Treasure Island Water Resource Recovery Facility. SFPUC has made one draw on the Project 1 WIFIA Loan, approximately $56.5 million of which was applied to costs of the Treasure Island Water Resource Recovery Facility. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “– Water Infrastructure Finance and Innovation Act Loans.” Wastewater Facilities and Infrastructure
Wastewater facilities and infrastructure projects are intended to provide necessary upgrades to existing facilities and infrastructure to maintain their intended functions. Wastewater facilities and infrastructure projects make up approximately $203.5 million of the 2027 Capital Plan.

One significant project within the wastewater facilities and infrastructure category is the Ocean Beach Climate Change Adaptation Project. This project is necessary to protect the integrity of wastewater assets built to protect public health and the environment, including the existing Lake Merced Tunnel, the Westside Pump Station and the Oceanside Treatment Plant. This is one of the City’s first climate change adaptation projects and is led by the SFPUC. The Lake Merced Tunnel has a storage capacity of up to 10 million gallons for combined sewage and stormwater flows and is located closest to the section of Ocean Beach most severely impacted by, and most vulnerable to, continued bluff erosion. The Lake Merced Tunnel could become structurally compromised if sudden bluff retreat is experienced during a large storm event. This project will implement a comprehensive shoreline management and protection plan in partnership with stakeholders and regulatory agencies to provide a long- term solution to the erosion issues along this portion of Ocean Beach and to mitigate potential impacts to the Lake Merced Tunnel and other critical wastewater assets (such as the Westside Force Main) at this location. The project is currently in design. The total current project budget is estimated to cost approximately $260.9 million, with approximately $185.0 million in the 2027 Capital Plan. The SFPUC is the lead agency for the project, and the Recreation and Parks department is expected to contribute approximately $8.0 million for non- SFPUC infrastructure and facilities. The SFPUC can provide no assurance that the total cost of this project will not be higher than currently estimated.

The Southeast Bay Outfall and Southeast Treatment Plant Booster Station Replacement Project, previously categorized as a Wastewater Facilities and Infrastructure Project, has been moved to the SSIP. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Southeast Bay Outfall and Southeast Treatment Plant Booster Station Replacement Project.” Renewal and Replacement
The Wastewater Enterprise undertakes renewal and replacement projects to improve performance or extend the service life of an existing asset. These projects are typically annual ongoing projects and fall into two categories:
(i) Renewal and Replacement Collection System and (ii) Renewal and Replacement Treatment Plants. Renewal and replacement projects make up approximately $1.571 billion of the 2027 Capital Plan.

The Renewal and Replacement Collection System category includes the following projects: cleaning projects; condition assessment projects to clean, inspect, and perform condition assessment of sewer pipelines and transport/storage boxes; sewer improvement projects to maintain the existing functionality of the collection system and repair and replace sewers; and spot sewer repair projects, which consist of as -needed repair of localized sections of existing sewer facilities. In the 2027 Capital Plan, green infrastructure is a new category included in this group of

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projects, consisting of existing green infrastructure projects originally constructed through the SSIP that are now due for renewal.

The Renewal and Replacement Treatment Plants category includes projects to maintain the capacity and reliable performance, and extend the useful life of aging assets such as discharge structures, pump stations, force mains, and treatment plants.

Priority lists are maintained for both collection and treatment projects, with collection system projects identified using an asset management approach which considers the current condition of the section in question and applicable risks of failure. See “THE WASTEWATER ENTERPRISE – Combined Sewage and Stormwater System – Sewer Lines.”
Environmental Planning Considerations
Projects undertaken by the SFPUC are subject to CEQA and certain projects involving the participation of federal agencies, including projects on federal land, are also subject to the National Environmental Policy Act (“NEPA”). The San Francisco Planning Department (the “Planning Department ”), acting as the CEQA lead agency under Chapter 31 of the City’s Administrative Code (“ Chapter 31”), generally coordinates CEQA review of SFPUC projects. The SFPUC also coordinates with federal NEPA lead agencies to prepare NEPA documentation for SFPUC projects.

Under CEQA, a project that may have a significant effect on the environment and is to be carried out or approved by a public agency must comply with a comprehensive environmental review process, including the preparation of an environmental impact report (“ EIR”), unless such effects can be mitigated to less -than-significant levels, as described below. The EIR reflects not only an independent technical analysis of the project’s potential environmental impacts, but also the comments of other agencies with some form of jurisdiction over the project and the comments of interested members of the public. Contents of the EIR include a detailed statement of the project’s significant environmental effects; any such effects that cannot be avoided if the project is implemented; mitigation measures proposed to minimize such effects; alternatives to the proposed project; the relationship between short - term and long- term impacts; any significant irreversible environmental changes that would result from the project; the project’s growth- inducing impacts; and a brief statement setting forth the agency’s reasons for determining that certain effects are not significant and hence do not require discussion in the EIR. Before approving a project, the SFPUC must make findings on whether or how it can mitigate the significant environmental effects of the project. If the project requires mitigation, the SFPUC must adopt a mitigation monitoring and reporting program on how the mitigation is carried out during project implementation. If a project’s significant effects can be mitigated, the SFPUC can adopt a written statement (called a mitigated negative declaration) or if the project will not have a significant effect on the environment, the SFPUC may adopt a written statement (called a negative declaration) to that effect and in both cases need not prepare an EIR. CEQA also contains several exemptions, which the SFPUC uses for its projects when appropriate.

After deciding to approve or carry out a project, either following the EIR process or after issuing a mitigated negative declaration or a negative declaration, the Planning Department must file a notice of such determination with the Office of the County Clerk. Any action or proceeding challenging the Planning Department determination must be brought within 30 days following the specified task for each type of CEQA document.

Actions have been, and in the future may be, filed challenging a project’s compliance with CEQA, including the adequacy of the EIR and other environmental documents for particular projects. If an action challenging the SFPUC’s compliance with CEQA is successful, the particular project could be delayed, revised, suspended or canceled.

As part of its regular planning and budgetary process, the SFPUC gives careful attention to environmental considerations. All projects are evaluated under the SFPUC’s environmental evaluation procedures (Infrastructure Procedures 7.01 and 7.02), developed in compliance with federal and State laws and regulations, City ordinances and the City’s Administrative Code procedures, including Chapter 31.

Prior to the sale of new money bonds, the Planning Department will issue a “Planning Certificate” required under Proposition E, approved by San Francisco voters on November 5, 2002 (“ Proposition E ”). The Planning

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Certificate will identify the status of environmental review for each capital project to be funded under the proposed bond sale and the type of CEQA document either completed or to be completed for each project. CEQA compliance must be completed for each project prior to project approval or approval to award a construction contract to implement any project to be funded by the proposed bond sale.

FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM Long Term Financing of Capital Program
The Wastewater Enterprise’s 10 -year financial plan for Fiscal Years 2026 -27 to 2035 -36 (the “ 2027 Financial Plan”) was adopted by the Commission on February 10, 2026. The 2027 Financial Plan is based on the 2027 Capital Plan. Pursuant to the 2027 Financial Plan, long- term debt financing, comprised of additional Bonds and State Revolving Fund loans, is projected to fund approximately $4.4 billion of the 2027 Capital Plan, and revenue (pay -as-you-go) funding is projected to fund approximately $1.4 billion of the 2027 Capital Plan. See “PLAN OF FINANCE” in the forepart of this Official Statement, and see also “OBLIGATIONS PAYABLE FROM NET REVENUES – Parity Loans” and “– Water Infrastructure Finance and Innovation Act Loans.” The SFPUC’s long -term capital and financial planning is performed on an annual rolling 10- year forward looking basis. Although the 2027 Financial Plan currently contemplates the issuance of additional Bonds and State Revolving Fund loans to finance the capital program, the SFPUC may also consider additional financing options in the future, including but not limited to other parity or subordinate federal and State loans.

Interim Funding Program Facilities
The SFPUC’s Interim Funding Program is a short -term financing program consisting of a combination of lines of credit and credit facilities, liquidity facilities and letters of credit supporting the SFPUC’s ability to issue short-term indebtedness, including the issuance of Commercial Paper Notes. The SFPUC utilizes the Interim Funding Program to meet the expenditure and encumbrance needs of capital projects on an interim basis through design and into the early project construction phase. The Interim Funding Program is authorized for the Wastewater Enterprise in the aggregate principal amount of $1.125 billion. Of this amount, $1.05 billion is authorized for the SFPUC to issue Commercial Paper Notes and $75 million is in the form of separate bank revolving credit agreements, each of which permits the SFPUC to make draws directly from respective bank, with the SFPUC’s payment obligation evidenced by the Revolving Notes. The SFPUC may issue Commercial Paper Notes or make draws on the U.S. Bank Credit Facility. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Subordinate Debt and Interim Funding Program.”
Interim funding program obligations are then refunded and consolidated into either long -term revenue bond issues or a Parity Loan when the outstanding and encumbered amount of the interim funding obligations approaches authorized limits. This approach allows the SFPUC to take advantage of historically lower short -term interest rates, and to size and closely time long-term financings with projected need.

As of May 6, 2026, the SFPUC had tax- exempt Commercial Paper Notes outstanding in the aggregate principal amount of $45 million, taxable Commercial Paper Notes outstanding in the aggregate principal amount of $90 million and no amount outstanding under the Revolving Notes. The SFPUC expects that all of the outstanding taxable Commercial Paper Notes will be refunded with proceeds of the 2026A Bonds. See “ INTRODUCTION – Concurrent Financing” in the forepart of this Official Statement. The SFPUC anticipates issuing additional Commercial Paper Notes and making draws directly on the revolving credit agreements to provide interim financing for Wastewater Enterprise capital projects. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Subordinate Debt and Interim Funding Program.”
Sources and Uses of Funding the Capital Program
The table below sets forth projected sources and uses of funds for the Wastewater Enterprise’s capital program, including the SSIP, for Fiscal Years 2026- 27 through 2030 -31. Non -SSIP capital program categories include Renewal and Replacement projects, Treasure Island Capital Improvement projects and Wastewater Facilities

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and Infrastructure projects. Sources of funding for the capital program include debt financing, wastewater revenues and capacity charge revenues. The projected repayment of principal and interest on future debt financings has been incorporated into the SFPUC’s rates for Fiscal Years 2024- 25 through 2025- 26, as approved by the Commission in May 2023, as well as the remaining projection period set forth in the 2027 Financial Plan, as adopted by the Commission on February 10, 2026. The approved rate changes are expected to increase revenues by 3.8% for Fiscal Year 2025-26, and projected rate changes are expected to increase revenues by 12.3% to 13.5% annually for Fiscal Years 2026-27 through 2029-30. Any future rate increases are subject to future approval by the Commission and the ability to reject rate increases by the Board of Supervisors. See “FINANCIAL OPERATIONS – Wastewater Enterprise Rate Setting” and “– Rates and Charges.”

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TABLE 10

WASTEWATER ENTERPRISE CAPITAL PROGRAM
FINANCING PLAN FOR FISCAL YEARS 2026-27 TO 2030-31
(IN THOUSANDS)(1)
2026-27 2027-28 2028-29 2029-30 2030-31
Five-Year
Total

USES OF FUNDS
SSIP $378,669 $515,015 $490,761 $338,890 $372,560 $2,095,895 Renewal and Replacement 147,310 152,026 127,618 141,355 147,631 715,940 Treasure Island Capital
Improvements 0 0 0 0 0 0
Wastewater Facilities &
Infrastructure 1,589 3,477 61,793 58,237 56,718 181,814 Total Uses(2) $527,568 $670,518 $680,172 $538,482 $576,909 $2,993,649

SOURCES OF FUNDS
Revenue Bonds/Parity Loans(3) $438,211 $575,472 $585,922 $412,228 $453,921 $2,465,754 Wastewater Revenues 85,637 91,215 90,305 122,191 118,803 508,151 Capacity Charge Revenues 3,719 3,830 3,945 4,064 4,186 19,744 Total Sources(2) $527,568 $670,518 $680,172 $538,482 $576,909 $2,993,649

(1) Amounts set forth are projections. Actual results may differ materially from these projections. See “FORW ARD-LOOKING STATEMENTS” in the forepart of this Official Statement. (2) Totals may not add due to rounding.
(3) Reflects anticipated long -term debt financing needs, which may come from the issuance of Additional Bonds and Parity Loans (such as SRF loans and/or WIFIA loans). Specific amounts for each funding source are not currently available. See also “Table 28 – Projected Revenue, Operating and Maintenance Expense and Debt Service Coverage for Fiscal Year Ending June 30 (In Thousands)” and “PROJECTED OPERATING RESULTS – Assumptions Used in Projections – Projected Debt Service.” Source: SFPUC, Financial Services.

Revenue Bond Oversight Committee; Audit of Bond Expenditures Public Utilities Revenue Bond Oversight Committee . In November 2002, San Francisco voters adopted Proposition P, an ordinance that established the Public Utilities Revenue Bond Oversight Committee (“ RBOC”) to report to the Mayor, the SFPUC and the Board of Supervisors regarding the expenditure of revenue bond proceeds issued by the SFPUC’s Water Enterprise, Wastewater Enterprise and Power Enterprise (each as defined herein).

The provisions of the ordinance establishing RBOC expired on January 1, 2025, and RBOC no longer exists. Before it sunset, RBOC, assisted by the CSA and its own outside auditors, performed three performance audits of select revenue bonds issued by the SFPUC. CSA issued the audit report for the first audit in February 2022, the audit report for the second audit in August 2023, and the audit report for the third audit in March 2026. The audit reports included several recommendations. The SFPUC engaged in discussions with CSA, and implemented the recommendations with which it concurred.

The CSA is an audit function within the Office of the Controller of the City (the “ Controller”). The CSA has broad oversight authority and responsibilities including, but not limited to, (i) reporting upon level of effectiveness for City public services, (ii) auditing financial and management performance of City departments and functions, (iii) ensuring the financial integrity and improving the overall performance and efficiency of City government, and (iv) maintaining a whistleblower hotline to investigate upon reports of fraud, waste and abuse.

Prospective Audits of Capital Expenditures . Given the expiration of the RBOC, the SFPUC is developing a new process for conducting annual audits of the SFPUC’s capital expenditures moving forward, led by the SFPUC’s Audit Bureau. The new process will provide for more systematic, annual audits of capital expenditures by

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auditors with greater familiarity with the SFPUC’s full operations and capital improvement programs rather than the limited scope of the RBOC review.

OBLIGATIONS PAYABLE FROM NET REVENUES
Authority for Issuance of Revenue Bonds and Other Obligations Payable from Net Revenues The Charter authorizes the SFPUC to issue revenue bonds and commercial paper notes and to incur other obligations payable from or secured by a pledge of revenues. The 2026A Bonds are being issued pursuant to Ordinance No. 181- 23, adopted by the Board of Supervisors on July 25, 2023 and Ordinance No. 125- 24, adopted by the Board of Supervisors on June 21, 2024, and under a resolution adopted by the Commission on July 28, 2026.

See “SECURITY FOR THE BONDS – Additional Series of Bonds,” “ – Additional Parity Loans” and “– Refunding Bonds” in the forepart of this Official Statement.

As described in this section, as of July 1, 2026, the SFPUC has debt obligations outstanding in the total amount of $__________. Of such amount, $__________ constitutes debt secured by a parity lien on Net Revenues, and $__________ consists of debt that is subordinate to the pledge of Net Revenues supporting the 2026A Bonds.

The table below sets forth the outstanding amount of parity and subordinate debt obligations as of July 1, 2026. For a table listing the debt service requirements for all currently debt secured by a parity lien on Net Revenues, see “DEBT SERVICE REQUIREMENTS” in the forepart of this Official Statement.

Indebtedness
Outstanding Amount as
of July 1, 2026
Parity Obligations
Parity Revenue Bonds $3,357,340,000
State Revolving Fund Loans __________
WIFIA Loans (Evidenced by
WIFIA Bonds) 1,370,746,623
Subtotal $__________
Subordinate Debt
Commercial Paper Notes $__________
2009 Golden Gate COPs __________
Subtotal $__________
Total: $__________

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Outstanding Parity Revenue Bonds
The following outstanding parity revenue bonds have been issued pursuant to the Indenture and are secured by a parity pledge of Net Revenues on a parity with the 2026A Bonds and the Parity Loans.

Series of Bonds Purpose
Original Principal
Amount
Principal Amount
Outstanding as of
July 1, 2026
Wastewater Revenue Bonds, 2010 Series B (“2010B Bonds”)(1)(2) Finance and refinance SSIP and other capital program costs $192,515,000 $161,985,000 Wastewater Revenue Bonds, 2013 Series B (“2013B Bonds”)(2) Finance and refinance SSIP and other capital program costs 331,585,000 93,095,000 Wastewater Revenue Bonds, 2016 Series A (“2016A Bonds”)(2) Finance and refinance SSIP and other capital program costs 240,580,000 223,290,000 Wastewater Revenue Bonds, 2016 Series B (“2016B Bonds”)(2) Finance and refinance capital program costs 67,820,000 62,945,000 Wastewater Revenue Bonds, 2018 Series A (“2018A Bonds”) Finance and refinance SSIP and other capital program costs 229,050,000 200,680,000 Wastewater Revenue Bonds, 2018 Series B (“2018B Bonds”) Finance capital program costs 185,950,000 156,580,000 Wastewater Revenue Bonds, 2021 Series A (“2021A Bonds”) Finance SSIP costs 260,835,000 260,835,000 Wastewater Revenue Bonds, 2021 Series B (“2021B Bonds”) Finance capital program costs 37,045,000 37,045,000 Wastewater Revenue Bonds, 2022 Series B (“2022B Bonds”) Refinance SSIP and other capital program costs 137,080,000 118,580,000 Wastewater Revenue Bonds (WIFIA Biosolids Loan)
(“BDFP WIFIA Bond”)(3)
Finance Biosolids Digester Facilities Project 699,242,023 699,242,023 Wastewater Revenue Bonds (Southeast Treatment Plant Improvements Project WIFIA Loan) (“STPI WIFIA Bond”)(4)
Finance Southeast Treatment Plant Improvement Project 513,861,981 513,861,981 Wastewater Revenue Bonds (Wastewater Capital Plan Resilience Program – Project 1) (“Project 1 WIFIA Bond”)(5)
Finance repair, rehabilitation, and replacement of critical assets, and enhance reliability, resiliency, and sustainability
157,642,619 157,642,619
Wastewater Revenue Bonds, 2023 Series A (“2023A Bonds”) Finance SSIP costs 530,565,000 530,565,000 Wastewater Revenue Bonds, 2023 Series B (“2023B Bonds”) Finance capital program costs 278,155,000 203,105,000 Wastewater Revenue Bonds, 2023 Series C (“2023C Bonds”) Refinance SSIP and other capital program costs 165,660,000 165,660,000 Wastewater Revenue Bonds, 2024 Series A (“2024A Bonds”)(6) Finance SSIP costs 431,110,000 431,110,000 Wastewater Revenue Bonds, 2024 Series B (“2024B Bonds”) Refinance capital program costs 87,250,000 87,250,000 Wastewater Revenue Bonds, 2024 Series C (“2024C Bonds”) Finance SSIP costs and refinance other capital program costs 539,720,000 539,720,000 Wastewater Revenue Bonds, 2024 Series D (“2024D Bonds”) Finance and refinance capital program costs 84,895,000 84,895,000 Total: $5,170,561,623 $4,728,086,623
(1) Issued as Build America Bonds. See “SECURITY FOR THE BONDS – Flow of Funds” and “– Rate Covenants” in the forepart of this Official Statement. (2) The SFPUC expects to apply a portion of the proceeds of the 2026B Bonds to refund all or a portion of its outstanding 2010B B onds, 2013B Bonds, 2016A Bonds, and 2016B Bonds. See “ PLAN OF FINANCE ” in the forepart of this Official Statement.
(3) Issued under the Eleventh Supplemental Indenture in connection with the BDFP WIFIA Loan. See “ – Water Infrastructure Finance and Innovation Act Loans.” Original Principal Amount and Principal Amount Outstanding are rounded. On March 27, 2024, a portion of the proceeds of the BDFP WIFIA Bond was used to defease the SFPUC’s Wastewater Revenue Notes, 2021 Series A (Green Notes), maturing on October 1, 2025. (4) Issued under the Tenth Supplemental Indenture in connection with the STPI WIFIA Loan. See “ – Water Infrastructure Finance and Innovation Act Loans.” Original Principal Amount and Principal Amount Outstanding are rounded. On March 27, 2024, a portion of the proceeds of the STPI WIFIA Bond was used to defease the SFPUC’s Wastewater Revenue Notes, 2021 Series B (Green Notes), maturing on October 1, 2026. (5) Issued under the Sixteenth Supplemental Indenture in connection with the Project 1 WIFIA Loan. Original Principal Amount and Principal Amount Outstanding are rounded. (6) The principal of the 2024A Bonds qualifies as “Excluded Principal” under the Indenture. See “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement.

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Additional Bonds
General. The SFPUC intends to issue Additional Bonds under the Indenture to finance select capital program projects, including SSIP projects. See “WASTEWATER ENTERPRISE CAPITAL PROGRAM,” “FINANCING PLAN FOR WASTEWATER ENTERPRISE CAPITAL PROGRAM” and “PROJECTED OPERATING RESULTS.”
Parity Loans
The SFPUC has entered into nine SRF loans with the State. These SRF loans constitute “Parity Loans” under the Indenture. The SFPUC plans to apply for additional SRF loans with the State over the next several years to obtain long-term financing for a portion of the SSIP. Such SRF loans are low -cost loans provided and administered by the State Water Resources Control Board on a project -by-project basis. The State’s SRF Loan Program provides favorable terms to the SFPUC, including up to 30- year amortizing loan terms which generally commence one year following project completion, an interest rate on each SRF loan that is equal to one -half of the true interest cost for the State’s most recent general obligation bond issue at the time such loan is entered into, and repayment of the SRF loans on a parity with the Bonds rather than on a basis senior to the Bonds. The SRF Loan Program offers loans to applicant entities based on available moneys and placement in a statewide intended use plan. SRF Loan Program moneys are disbursed on a cost -incurred basis pursuant to disbursement requests submitted by the SFPUC under the SRF loan documents. Although placement in the intended use plan is a necessary condition to receiving SRF Loan Program moneys, such placement does not create an obligation on the part of the applicant to accept SRF Loan Program moneys.

In connection with the SFPUC’s Wastewater Enterprise, the following table sets forth the SRF loans that the SFPUC has entered into pursuant to the State’s SRF Loan Program, the SRF loan commitment amount, the disbursement amount requested and received as of January 31, 2026, the interest rate, the estimated/actual project completion date, the estimated/actual loan repayment commencement date and the final maturity of each SRF loan.

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State Revolving Fund Loans
Project
SRF Loan
Commitment
Amount
Disbursement
Amount
Requested as of
January 31, 2026(1)
Disbursement
Amount
Received as of
January 31, 2026 Interest Rate
Actual/Estimated
Project
Completion
Date
Actual/Estimated
Loan Repayment
Commencement
Date(2) Final Maturity
Lake Merced Green
Infrastructure Project $7,435,000 $6,115,588 $6,115,588 1.6% April 24, 2018(3) July 31, 2021

July 31, 2050
Southeast Treatment Plant
Primary/Secondary Clarifier
Upgrade Project 34,445,778 29,197,239 29,197,239 1.8 January 21, 2019(3) March 30, 2019

March 30, 2048
Southeast Treatment Plant
521/522 and Disinfection
Upgrade Project 40,006,740 39,740,686 39,740,686 1.8 June 30, 2021(3) July 18, 2020

July 18, 2049
North Point Facility Outfall
Rehabilitation Project 20,199,435 17,705,698 17,705,698 1.8 October 31, 2018(3) February 28, 2019

February 28, 2048
Southeast Water Pollution
Control Plant Biosolids
Digester Facilities Project 132,000,000 132,000,000 132,000,000 1.4 May 11, 2029(4) May 1, 2027

May 1, 2056
OSP Digester Gas Utilization
Upgrade Project 54,387,969 54,387,969 54,387,969 1.4 March 31, 2028(4) March 31, 2025

March 31, 2054
SEP New Headworks (Grit)
Replacement Project 112,036,181 112,036,181 112,036,181 1.1 August 31, 2027(4) March 1, 2025

March 1, 2054
New Treasure Island
Wastewater Treatment Plant(5) 115,000,000 - - 1.7 February 27, 2027 April 1, 2027 April 1, 2056 Folsom Area Stormwater
Improvement Project(6) 55,000,000 - - 1.8 September 1, 2028 April 1, 2029 April 1, 2058 Total: $570,511,103 $391,183,361 $391,183,361
____________________
(1) SRF Loan Program moneys are disbursed on a cost-incurred basis pursuant to disbursement requests submitted by the SFPUC. (2) SRF loans generally amortize over a 30-year term commencing one year following the estimated project completion date as set forth in the applicable loan agreement. (3) Actual project completion dates; repayment schedules have been established and repayments have commenced for these projects. (4) Estimated project completion dates; loan repayment expected to commence one year following estimated project completion date as set forth in the applicable loan agreement (originally May 1, 2026, for Southeast Water Pollution Control Plant Biosolids Digester Facilities Project; originally March 31, 2024, for OSP Digester Gas Utilization Upgrade Project; and originally March 1, 2024, for SEP New Headworks (Grit) Replacement Project). (5) Includes grant component of $5,000,000.
(6) Includes principal forgiveness component of $5,000,000.

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In addition to the SRF loans described above, the SFPUC has applied for one additional SRF loan to finance the Lower Alemany Area Stormwater Improvements Project (the “Alemany Project ”). For more information about this project, see “WASTEWATER ENTERPRISE CAPITAL PROGRAM – Sewer System Improvement Program – Program Scope – Stormwater Management/Flood Resilience.” In August 2025, the State Water Resources Control Board approved the Clean Water State Revolving Fund Intended Use Plan for State Fiscal Year 2025 -26, which includes a list of projects that the Division of Financial Assistance anticipates funding (the “2025- 26 Fundable List”). The 2025-26 Fundable List includes, among others, partial funding in the amount of $55 million for the Alemany Project ($50 million loan and $5 million grant).

Inclusion on the 2025- 26 Fundable List does not, however, constitute a financing commitment, a guarantee that sufficient funds from the anticipated sources of funds will be available, or a determination of eligibility. Any such funding would take the form of a loan from the State Water Resources Control Board to the SFPUC, constituting a Parity Loan. The SFPUC is working with the State Water Resources Control Board to obtain approval of the SRF loan application and negotiate SRF loan terms for the Alemany Project. If approved by the State Water Resources Control Board, the SFPUC anticipates that an SRF loan for the Alemany Project will close in Fiscal Year 2026-27.

The SFPUC has also entered into a WIFIA loan to provide partial funding to the Wawona Area Stormwater Improvement Project, the Folsom Stormwater Improvement Project (Phase 2), and the Treasure Island Water Resource Recovery Facility. For more information, see “– Water Infrastructure Finance and Innovation Act Loans – Master Agreement and Project Loans” below.

The SFPUC has covenanted in the Twentieth Supplemental Indenture not to enter into state loans payable on a basis senior to the Bonds.

Water Infrastructure Finance and Innovation Act Loans
Biosolids Digester Facilities Project. In July 2018, the SFPUC entered into the WIFIA Loan Agreement, dated as of July 27, 2018 (the “ Original BDFP WIFIA Loan Agreement ”), with the EPA, acting by and through the WIFIA Lender, pursuant to which the WIFIA Lender agreed to make a loan to the SFPUC in an amount not to exceed $699,242,023 to finance eligible costs of the Biosolids Digester Facilities Project to be located at the Southeast Treatment Plant (the “BDFP WIFIA Loan”). The BDFP WIFIA Loan does not constitute a “Parity Loan” under the Indenture. Instead, to evidence its repayment obligation pursuant to the BDFP WIFIA Loan to the EPA, the SFPUC issued a parity Bond under the Ninth Supplemental Indenture, dated as of July 27, 2018 (the “ Ninth Supplemental Indenture”), between the SFPUC and the Trustee. In June 2020, the SFPUC and the WIFIA Lender agreed to make administrative revisions to the Original BDFP WIFIA Loan Agreement and to enter into a new loan agreement (the “Revised BDFP WIFIA Loan Agreement ”). The Original BDFP WIFIA Loan Agreement has been terminated and is no longer in full force and effect, and the Ninth Supplemental Indenture has been surrendered and cancelled by the SFPUC and the WIFIA Lender. Pursuant to the Revised BDFP WIFIA Loan Agreement, the BDFP WIFIA Loan bears interest at a fixed rate of 1.45% and will mature no later than April 1, 2059. To evidence its repayment obligation pursuant to the BDFP WIFIA Loan to the EPA, the SFPUC issued the BDFP WIFIA Bond, a parity Bond under the Eleventh Supplemental Indenture, dated as of June 12, 2020, between the SFPUC and the Trustee. As of the date of this Official Statement, the SFPUC has fully drawn on the BDFP WIFIA Loan and the principal amount of the BDFP WIFIA Bond is approximately $699,242,023. On March 27, 2024, a portion of the proceeds of the BDFP WIFIA Bond was used to defease the SFPUC’s Wastewater Revenue Notes, 2021 Series A Notes (Green Notes), maturing on October 1, 2025.

No payment of principal or interest on the BDFP WIFIA Loan was made prior to April 1, 2026. Prior to April 1, 2026, interest on the BDFP WIFIA Loan accreted and was added to the outstanding principal balance of the BDFP WIFIA Bond. The first interest payment was made on April 1, 2026, and only interest is expected to be payable on the BDFP WIFIA Loan through April 1, 2043. Principal of the BDFP WIFIA Loan is expected to be amortized commencing on April 1, 2043, and to continue through the final maturity date of the BDFP WIFIA Loan.

Southeast Treatment Plant Improvements Project. In June 2020, the SFPUC entered into the WIFIA Loan Agreement, dated as of June 12, 2020 (the “ STPI WIFIA Loan Agreement”), with the EPA, pursuant to which the WIFIA Lender agreed to make a loan to the SFPUC in an amount not to exceed $513,861,981 to finance eligible costs of certain improvements at the Southeast Treatment Plant (the “Southeast Treatment Plant Improvements

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Project”) (the “STPI WIFIA Loan ”), which includes the Biosolids Digester Facilities Project and the SEP New Headworks (Grit) Replacement Project (as defined herein). Pursuant to the STPI WIFIA Loan Agreement, the STPI WIFIA Loan bears interest at a fixed rate of 1.45% and will mature no later than April 1, 2062. The STPI WIFIA Loan does not constitute a “Parity Loan” under the Indenture. Instead, to evidence its repayment obligation pursuant to the STPI WIFIA Loan to the EPA, the SFPUC issued the STPI WIFIA Bond, a parity Bond under the Tenth Supplemental Indenture, dated as of June 12, 2020, between the SFPUC and the Trustee. As of the date of this Official Statement, the SFPUC has fully drawn on the STPI WIFIA Loan Agreement and the principal amount of the STPI WIFIA Bond is approximately $513,861,981. On March 27, 2024, a portion of the proceeds of the STPI WIFIA Bond was used to defease the SFPUC’s Wastewater Revenue Notes, 2021 Series B Notes (Green Notes), maturing on October 1, 2026.

No payment of principal or interest on the STPI WIFIA Loan is anticipated to be made prior to April 1, 2032. Prior to April 1, 2032, interest on the STPI WIFIA Loan is expected to accrete and will be added to the outstanding principal balance of the STPI WIFIA Bond. From April 1, 2032, through April 1, 2043, only interest is expected to be payable on the STPI WIFIA Loan. Principal of the STPI WIFIA Loan is expected to be amortized commencing on April 1, 2043, and to continue through the final maturity date of the STPI WIFIA Loan.

Master Agreement and Project Loans . In April 2023, the SFPUC entered into the WIFIA Master Agreement, dated April 26, 2023 (the “ WIFIA Master Agreement ”), with the EPA, pursuant to which the WIFIA Lender agreed to make up to five loans to the SFPUC in an aggregate amount not to exceed $791,337,456 to finance certain Wastewater Enterprise capital improvement projects. In April 2023, the SFPUC also entered into the first WIFIA Loan Agreement (the “ Project 1 Loan Agreement ” and, together with the Revised BDFP WIFIA Loan Agreement and the STPI WIFIA Loan Agreement, the “ WIFIA Loan Agreements ”), with the EPA, pursuant to which the WIFIA Lender agreed to make a loan to the SFPUC in an amount not to exceed $369,335,021 to finance a portion of eligible project costs for a project that includes the following components: (1) Yosemite Creek Daylighting, (2) Wawona Area Stormwater Improvements and Vicente Street Water Main Replacement, (3) Folsom Area Stormwater Improvements, (4) Westside Pump Station Reliability Improvements, (5) North Shore Pump Station, and (6) Treasure Island Water Resource Recovery Facility (collectively, the “Project 1 Projects ”) (“Project 1 WIFIA Loan ” and, together with the BDFP WIFIA Loan and the STPI WIFIA Loan, the “ WIFIA Loans”).

Pursuant to the Project 1 Loan Agreement, the Project 1 WIFIA Loan bears interest at a fixed rate of 3.65% and will mature no later than October 1, 2061. The Project 1 Loan does not constitute a “Parity Loan” under the Indenture. Instead, to evidence its repayment obligation pursuant to the Project 1 Loan to the EPA, the SFPUC issued a parity Bond (the “Project 1 WIFIA Bond” and, together with the BDFP WIFIA Bond and the STPI WIFIA Bond, the “ WIFIA Bonds”) under the Sixteenth Supplemental Indenture, dated as of April 26, 2023, between the SFPUC and the Trustee. As of the date of this Official Statement, the SFPUC has made one draw on the Project 1 Loan Agreement and the principal amount of the Project 1 WIFIA Bond is $157,642,619.

No payment of principal or interest on the Project 1 Loan is anticipated to be made prior to April 1, 2032.

Prior to April 1, 2032, interest on the Project 1 Loan is expected to accrete and will be added to the outstanding principal balance of the Project 1 WIFIA Bond. From April 1, 2032, through April 1, 2041, only interest is expected to be payable on the Project 1 Loan. Principal of the Project 1 Loan is expected to be amortized commencing on October 1, 2041, and to continue through the final maturity date of the Project 1 Loan.

The SFPUC is in the process of securing a second loan under the WIFIA Master Agreement for approximately $145.2 million to finance (1) the Alemany Project, (2) Combined Sewer Discharge Structure Rehabilitation and Upgrades – Part 1, (3) Geary Bus Rapid Transit Sewer Improvements, (4) Seacliff No. 1 Pump Station and Force Main Upgrade, (5) Seacliff No. 2 Pump Station and Force Main Upgrade, and (6) Secondary Clarifiers Rehabilitation (the “ Project 2 WIFIA Loan ”). The SFPUC anticipates it will enter into a second WIFIA Loan Agreement with the EPA for the Project 2 WIFIA Loan in Fiscal Year 2026- 27.

WIFIA Bonds . The BDFP WIFIA Bond, the STPI WIFIA Bond, and the Project 1 WIFIA Bond are payable from and secured by a pledge of Net Revenues on a parity with the Bonds.

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The WIFIA Loan Agreements permit the SFPUC to draw under the respective WIFIA Loans from time to time, provided that such loans must be disbursed no later than one year following the substantial completion date of each project as set forth in the respective WIFIA Loan Agreements. The BDFP WIFIA Loan and the STPI WIFIA Loan are fully drawn, and the substantial completion date for the Project 1 Projects is April 22, 2030. Each draw is subject to the satisfaction of conditions, including without limitation, the delivery to the EPA of financial projections evidencing that the SFPUC will be able to satisfy its rate covenant for the current Fiscal Year and each of the next 10 Fiscal Years.

If an event of default occurs under a WIFIA Loan Agreement, the EPA may elect to suspend future disbursements of such WIFIA Loan, to terminate the capitalized interest period (thus causing interest to be payable on a current basis), to require the payment of a default interest rate (equal to such WIFIA Loan rate plus 200 basis points) and to institute legal action to enforce the provisions of such WIFIA Loan Agreement. However, the EPA cannot take any action, in law or in equity, which would affect the application of the Net Revenues of the Wastewater Enterprise or to accelerate the payment obligations under such WIFIA Bond except pursuant to the EPA’s rights as a parity Bondholder under the Indenture.

No reserve account was established to secure the WIFIA Loans.

Conditions to Disbursements under WIFIA Loan Agreements. The ability of the SFPUC to obtain disbursements from the EPA under the WIFIA Loan Agreements is subject to several conditions, including the payment of certain fees, if applicable, and the delivery of certain documentation, including an updated financial plan, copies of financing and project documents, proof of insurance required under the respective WIFIA Loan Agreements and a requisition that contains certain representations of the SFPUC as of the disbursement date.

The EPA is permitted to refuse disbursement upon the occurrence and continuance of certain events of default under the WIFIA Loan Agreements or the occurrence and continuance of events that would be an event of default with the passage of time and/or giving of notice. Such events include, among others, and as applicable (i) failure of the SFPUC to diligently pursue work on the applicable project or to achieve substantial completion of the Project 1 Projects by April 22, 2032; (ii) a default by the SFPUC under any of the principal contracts relating to the applicable project and the SFPUC fails to cure such default or replace the contract; (iii) the occurrence of a Bankruptcy Related Event (as defined in the WIFIA Loan Agreements) with respect to the counterparty to any of the principal contracts relating to the applicable project, unless such contract is replaced; (iv) abandonment of the applicable project by the SFPUC; (v) failure of the SFPUC to operate the applicable project for a continuous period of at least 180 days unless the cessation in operations is excused pursuant to the respective WIFIA Loan Agreements; (vi) a covenant default under the respective WIFIA Loan Agreements; (vii) misrepresentations made by the SFPUC under the respective WIFIA Loan Agreements or a document delivered in connection with the respective WIFIA Loan Agreements; (viii) acceleration of parity debt or a default under documents relating to the SFPUC’s parity debt; (ix) one or more judgments for the payment of money that in the aggregate exceed $50 million or would cause a Material Adverse Effect (as defined under the WIFIA Loan Agreements) are rendered against the SFPUC, and such judgment(s) are unpaid for a period of 30 consecutive days or for which an action has been legally taken by a judgment creditor to attach or levy upon the SFPUC’s assets for the enforcement of such judgment(s); (x) the SFPUC fails to maintain its existence; (xi) a Bankruptcy Related Event (as defined under the WIFIA Loan Agreements) with respect to the SFPUC occurs; (xii) the respective WIFIA Loans or documents related to the respective WIFIA Loans are no longer valid; (xiii) failure to comply with the rate covenant set forth in the Indenture; (xiv) failure by the SFPUC to construct the respective projects consistent with government approvals or good engineering practices or failure to comply with applicable federal or local law; (xv) occurrence of a Material Adverse Effect (as defined in the WIFIA Loan Agreement), or an event or condition that could reasonably be expected to result in a Material Adverse Effect; or (xvi) failure to comply with certain other provisions of the WIFIA Loan Agreement (such as the maintenance of insurance). See also “RISK FACTORS – Risks Relating to Financial Operations – WIFIA Loan Agreements” in the forepart of this Official Statement.

Subordinate Debt and Interim Funding Program
No Limits on Subordinate Debt . The SFPUC may issue bonds or incur other indebtedness secured by a pledge of Net Revenues on a basis subordinate to the pledge thereof securing the Bonds, without limitation.

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Interim Funding Program . Pursuant to the Charter, the SFPUC has established an Interim Funding Program (the “ Interim Funding Program ”) (formerly known as the “Commercial Paper Program”) to fund construction costs relating to Wastewater Enterprise capital projects.

The Interim Funding Program is authorized for the Wastewater Enterprise in the amount of $1.125 billion.

Of this amount, $1.05 billion is authorized for the SFPUC to issue tax- exempt and taxable commercial paper notes (the “Commercial Paper Notes”) secured by eight bank credit facilities, as set forth below:

Commercial Paper Notes
Bank Credit Facilities
Credit Facility Bank Amount Stated Expiration Date
Letter of Credit Sumitomo Mitsui Banking Corporation,
acting through its New York Branch
$150 million March 2, 2029
Letter of Credit Bank of America, N.A. $150 million January 22, 2030 Letter of Credit Bank of America, N.A. $100 million January 22, 2031 Revolving Credit and
Term Loan Agreement
TD Bank, N.A. $150 million July 3, 2028
Letter of Credit Truist Bank $125 million January 22, 2029 Revolving Credit and
Term Loan Agreement
Bank of America, N.A. $125 million August 2, 2027
Letter of Credit Sumitomo Mitsui Banking Corporation,
acting through its New York Branch
$100 million May 31, 2027
Revolving Credit and
Term Loan Agreement
BMO Bank N.A. $150 million November 9, 2028
The remaining $75 million of the Interim Funding Program is in the form of a bank revolving credit agreement with U.S. Bank National Association (the “ U.S. Bank Credit Facility ”), with a current stated expiration date of July 16, 2027. The U.S. Bank Credit Facility permits the SFPUC to make draws directly on the bank, with the SFPUC’s payment obligation evidenced by a tax-exempt revolving note (the “Revolving Notes”).

The Commercial Paper Notes and the Revolving Notes are payable from Net 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 the Bonds (including the Parity Loans and the WIFIA Bonds).

The SFPUC has approximately $135 million principal amount of Commercial Paper Notes outstanding and no outstanding principal balance on any of the Revolving Notes as of May 5, 2026. The SFPUC expects that all of the outstanding taxable Commercial Paper Notes will be refunded with proceeds of the 2026A Bonds. See “INTRODUCTION – Concurrent Financing” in the forepart of this Official Statement.

Other Subordinate Obligations Payable from Net Revenues The SFPUC completed the construction of a 13- story office building at 525 Golden Gate Avenue in San Francisco to house the administrative offices of the SFPUC’s three utility enterprises and moved into the building in 2012. Total project costs were approximately $202 million and were financed with land and property sale proceeds, fund balances, grants and the proceeds of certificates of participation (the “2009 Golden Gate COPs”), representing interests in a City General Fund lease, executed and delivered in two series (one of whi ch constitutes Build America Bonds) on October 7, 2009, in the aggregate principal amount of $167,670,000. Pursuant to a memorandum of understanding between the City and the SFPUC, the SFPUC will reimburse the City General Fund for all debt service in connection with this City financing (net of Refundable Credits received). The final

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maturity date on the 2009 Golden Gate COPs is November 1, 2041. As of February 1, 2026, the principal amount outstanding of the 2009 Golden Gate COPs was $21.8 million. The SFPUC allocates such payment obligations internally among its three utility enterprises based on percentage usage. The Wastewater Enterprise is responsible for 18.88% of such obligations, payable from Net Revenues on a basis subordinate to the payment of principal of and interest on the Bonds.

Commission staff is considering whether to propose to the Commission refinancing the 2009 Golden Gate COPs with Additional Bonds. If authorized by the Commission and the Board of Supervisors, Additional Bonds could be issued in the near future to refinance the portion of the 2009 Golden Gate COPs attributable to the space in such building utilized by the Wastewater Enterprise. The SFPUC may or may not proceed with the issuance of such Additional Bonds depending on market conditions. See “INTRODUCTION – Concurrent Financing” in the forepart of this Official Statement.

Contingent Payment Obligations
The Wastewater Enterprise has no interest rate swaps, caps or hedges or other contingent payment obligations payable from Net Revenues. The Wastewater Enterprise may in the future, however, incur contingent payment obligations payable from Net Revenues. Such contingent payment obligations may be payable on a parity with the Bonds if the conditions for the issuance of parity debt under the Indenture are met. See “SECURITY FOR THE BONDS – Additional Series of Bonds” and “ – Additional Parity Loans” in the forepart of this Official Statement.

FINANCIAL OPERATIONS
General
The SFPUC is a department of the City and, as such, the financial operations of the SFPUC’s three enterprises are included in the Annual Comprehensive Financial Report of the City and shown as enterprise funds.

The City’s Annual Comprehensive Financial Report is not incorporated by reference herein.

The following information is provided with respect to the Wastewater Enterprise only and does not purport to reflect the financial position of the SFPUC or the City as a whole.

Basis of Accounting. The accounts of the Wastewater Enterprise are organized based on a proprietary fund type, specifically an enterprise fund. The financial activities of the Wastewater Enterprise are accounted for on a flow of economic resources measurement focus, using the accrual basis of accounting. Under this method, all assets and liabilities associated with its operations are included on the statement of net position; revenues are recorded when earned, and expenses are recorded when liabilities are incurred.

The SFPUC applies all applicable GASB pronouncements.

City Budget Process . The SFPUC’s operating and capital budget preparation and approval is a part of a City-wide process. The SFPUC is one of several departments that prepares biennial budgets. The Commission reviews and approves the SFPUC’s two- year budget, which is then submitted to the Mayor’s Office for review. The Mayor then incorporates the proposed budget, with amendments, into the City- wide budget that is submitted to the Board of Supervisors for approval. Under the Charter, the Board of Supervisors may increase or decrease any proposed expenditure in the Mayor’s budget so long as the aggregate changes do not cause the expenditures to exceed the total amount of expenditures proposed by the Mayor. The Charter further provides that the Mayor may reduce or reject any expenditure authorized by the Board of Supervisors except appropriations for bond interest, redemption or other fixed charges, subject to reinstatement of any such expenditure by a two- thirds vote of the Board of Supervisors.

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Wastewater Enterprise Rate Setting
General. Sewer service charges are the primary funding source for the payment of costs associated with the Wastewater Enterprise’s combined sewer system to manage sewage, wastewater and sanitary waste. Pursuant to the Charter, an independent consultant prepares a cost of service and rate design analysis for the Wastewater Enterprise at least once every five years. Based on this analysis, the SFPUC sets rates projected to be sufficient to fund the proposed budget, to maintain an adequate operating reserve and to comply with Indenture requirements. In addition to meeting the SFPUC’s capital financing, debt service coverage and reserve policy targets, the rates must also comply with regulations or policies promulgated by the EPA, the State Water Resources Control Board and the Board of Supervisors and with the requirements of the City’s Charter and the State Constitution; however, the SFPUC’s sewer service rates are not subject to any approval proceedings by the California Public Utilities Commission or any other State or federal agencies. See “CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – State Law Limitations.”
Federal and State Requirements. Under federal clean water laws and regulations, entities accepting federal grant funds and loans (such as the SFPUC) must comply with certain requirements related to the sufficiency of revenues and system operations, maintenance and replacement. Federal and State requirements related to grant and loan funding are administered and enforced by the State Water Resources Control Board. See “REGULATORY MATTERS” for a more detailed discussion of State and federal regulations affecting the Wastewater Enterprise.

Summary of Charter Rate -Setting Requirements . Pursuant to certain provisions of Proposition E, which became effective with respect to the Wastewater Enterprise on January 3, 2003, the Charter was amended to authorize the Commission to set rates, fees and other charges in connection with providing Wastewater Enterprise services. These rate changes are subject to rejection, within 30 days of submission, by the Board of Supervisors. If the Board of Supervisors does not act within 30 days, the rates become effective without further action.

In setting Wastewater Enterprise rates, fees and charges, the Commission must:
(a) establish rates, fees and charges at levels sufficient (i) to improve or maintain financial condition and bond ratings at or above levels equivalent to highly rated utilities, (ii) to meet requirements and covenants under all bond resolutions and indentures (including the Indenture) and (iii) to provide sufficient resources for the continued financial health (including appropriate reserves), operation, maintenance and repair, consistent with good utility practice; (b) retain an independent rate consultant to conduct rate and cost of service studies at least every five years;
(c) set retail rates, fees and charges based on the cost of service; (d) conduct all studies mandated by applicable State or federal law to consider implementing connection fees servicing new development;
(e) conduct studies of rate -based conservation incentives and/or lifeline rates and similar rate structures to provide assistance to low income users, and to take the results of each study into account when establishing rates, fees and charges, in accordance with State and federal laws; and (f) adopt annually a rolling five-year forecast of rates, fees and charges.

Rate Setting Process. The Wastewater Enterprise periodically adjusts rates based on a revenue requirement analysis, comprehensive cost of service analysis, and rate design, as required by the Charter. The biannual budget submitted to the Commission, the Mayor and the Board of Supervisors for approval, along with the long- term projections in the 10-year financial plan adopted by the Commission, are used as the basis for determining annual revenue requirements. The Wastewater Enterprise projects revenues unde r the existing schedule of rates for sufficiency. If additional revenues are required to meet budgetary sufficiency or if the cost structure of the Wastewater Enterprise has changed, recommended rate schedule increases are submitted to the Commission for its

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consideration. After following public notice procedures established by the California Constitution and the City’s Administrative Code and receiving public comment, the Commission adopts a rate resolution and transmits its recommended rate schedules to the Board of Supervisors. Once submitted, the Board of Supervisors has authority under the Charter to vote to reject the proposed rate schedules within 30 days. If rejected, the existing rate schedules remain in effect until a new rate schedule is resubmitted by the Commission and not rejected by the Board of Supervisors.

As part of the annual 10- year financial plan process, the Wastewater Enterprise develops a 10 -year rate forecast using projected revenues under existing rates plus additional revenues from projected rate increases, as required, to meet the projected revenue requirements during the forecast period. This forecast is updated each year resulting in a “rolling” rate forecast that is intended to moderate the effects of any significant changes in revenue requirements in any year.

In addition to complying with the requirements of the Charter, the rate -setting process must comply with the requirements of the State Constitution. See “CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – State Law Limitations.”
SFPUC Citizens Advisory Committee and Rate Fairness Board . The Public Utilities Commission Citizens’ Advisory Committee (“ CAC”), established by a Charter amendment in 2002, provides recommendations to the SFPUC’s General Manager and the Board of Supervisors regarding the SFPUC’s long- term strategic, financial and capital improvement plans for all of its enterprises. The CAC is comprised of 17 appointees. Each member of the Board of Supervisors may appoint one member who must be a resident of their supervisory district.

Candidates must demonstrate one or more of the following qualifications: represent a community, business, environmental or environmental justice organization, or have demonstrated knowledge, skill or experience in a field related to public utilities, environmental justice or environmental science. Two additional members of the CAC are appointed by the President of the Board of Supervisors, one of whom represents a small business and the other of whom represents an environmental justice organization. Four members are appointed by the Mayor and must include one member who represents regional water customers of the SFPUC, one member who represents a large San Francisco water user, one member who has knowledge of engineering or financial management and one member who represents a regional or statewide environmental organization.

Proposition E directed the establishment of a Rate Fairness Board to advise the SFPUC on water, sewer and power rate matters. The Rate Fairness Board consists of seven members: the City Administrator or their designee; the Controller or their designee; the Director of the Mayor’s Office of Public Finance or their designee; two residential San Francisco retail customers, consisting of one appointed by the Mayor and one by the Board of Supervisors; and two San Francisco retail business customers, consisting of a large business customer appointed by the Mayor and a small business customer appointed by the Board of Supervisors. Specific powers for the Rate Fairness Board include the authority to: (1) annually review the five -year rate forecasts produced by the SFPUC enterprises, including the Wastewater Enterprise; (2) hold one or more public hearings on annual rate recommendations before the SFPUC adopts rates; (3) provide a report and recommendations to the SFPUC on any rate proposal; and (4) in connection with periodic rate studies, submit to the SFPUC rate policy recommendations for the Commission’s consideration, including recommendations to reallocate costs among various retail utility customer classifications, subject to any outstanding bond requirements. The Rate Fairness Board is not authorized, however, to reject proposed rates approved by the Commission.

Wastewater Enterprise Rates and Charges
General. The SFPUC’s wastewater system is a combined sewer system to manage sewage, wastewater, and sanitary waste. Within this combined system, sanitary sewer and stormwater generally comprise approximately 82% and 18%, respectively, of the annual flows treated by the Wastewater Enterprise, though these percentages vary year-to-year based on rainfall.

On December 12, 2023, the City was served with a purported class action lawsuit challenging the compliance of the rates charged by the Wastewater Enterprise with the requirements of Proposition 218. See “CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS – State Law Limitations – Proposition 218” and “– Proposition 218 Litigation.”

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In April 2026, the Commission approved two years of annual retail water and sewer service rate increases beginning July 1, 2026, and applicable to Fiscal Years 2026- 27 and 2027-28. Overall, the rate changes are expected to increase rate revenues by approximately 14% annually in each of the two Fiscal Years.

Historical Wastewater Rates and Charges . In April 2018, the Commission approved four years of annual retail water and sewer service rate increases beginning July 1, 2018, and applicable to Fiscal Years 2018 -19 through 2021-22. There was no rate increase in Fiscal Year 2022 -23. In May 2023, the Commission approved three years of annual retail water and sewer service rate increases beginning July 1, 2023, and applicable to Fiscal Years 2023 -24 through 2025- 26. As further described below, separate rate schedules applied to residential and non- residential customers. The discussion of historical rates and charges below covers Fiscal Years 2021 -22 through 2025 -26, reflecting two years of rates and charges under the previous rate structure and three years of rates and charges under the current rate structure.

Historical Residential
Prior to July 1, 2023, the Wastewater Enterprise’s rate structure for residential customers included a fixed monthly service charge and a variable sewer service charge per discharge unit based only on their sanitary sewage contributions to the system. Generally, the amount of monthly discharge units was determined by multiplying a customer’s monthly metered water consumption by a “flow factor” applicable to such account. The calculation was designed to approximate that portion of the account’s total water use returned to the sewer system as wastewater.

The standard flow factor applied to metered water usage to determine billable discharge units was 90% for single - family residential accounts and 95% for multi-family residential accounts.

Beginning July 1, 2023, the Wastewater Enterprise’s sewer service charges for residential customers include a fixed monthly service charge, a variable sanitary sewer component, and a stormwater component based on property size and/or parcel characteristics. This approach allows the SFPUC to more directly recover costs related to collecting and treating stormwater runoff based on property characteristics that result in greater stormwater runoff.

The sanitary sewer component continues to be based on the assumed percentage of metered water usage discharged into the sewer system, or “flow factor,” and is calculated assuming domestic strength sewage. The standard flow factor remains unchanged.

Pursuant to the rate schedules applicable to Fiscal Years 2021 -22 through 2025- 26, the SFPUC could automatically implement a temporary drought surcharge if the Commission declared a drought emergency and triggered certain drought response actions set forth in the SFPUC’s water shortage allocation plan. The surcharge could not exceed the requested volumetric reduction in water usage and only applied to volumetric water and wastewater charges. A temporary drought surcharge was in place from April 1, 2022 through May 1, 2023, and was designed to be bill -neutral for customers who met established conservation targets. No drought surcharge was in place during Fiscal Years 2023-24 through 2025-26.

The following table sets forth (1) the historical single - and multi-family residential monthly service charge and sewer service charges for Fiscal Year 2021 -22 and Fiscal Year 2022-23; and (2) the historical single- and multi- family residential monthly service charges and sanitary sewer component of the sewer service charges for Fiscal Years 2023-24 through 2025-26, which were approved in May 2023.

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TABLE 11

HISTORICAL SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL

MONTHLY SERVICE CHARGES
FOR FISCAL YEARS 2021-22 THROUGH 2025-26
Fiscal Year
Monthly Service
Charge
Sewer Service
Charge(1)
(per discharge unit(2))

Sanitary Sewer
Component (per
discharge unit(2))
2021-22(1) $5.21 $15.97 -
2022-23(1)(3) 5.21 15.97 -
2023-24(4)(5) 4.85 - $16.91
2024-25(4)(5) 5.28 - 17.80
2025-26(4)(5) 5.76 - 18.72
_______________
(1) Does not include the temporary drought surcharge of 5% on volumetric rates in effect from April 1, 2022, through May 1, 2023.
(2) One discharge unit equals 100 cubic feet of wastewater. (3) There was no rate increase in Fiscal Year 2022-23.
(4) Does not include stormwater component of the sewer service charge. See “Table 12 – Historical Simplified Residential Monthly Stormwater Component of the Sewer Service Charge By Tier” below. (5) Rates approved on May 23, 2023.

Source: SFPUC, Financial Services.

Beginning July 1, 2023, the stormwater component is based on the property characteristics of the City assessor’s parcel on which a sewer account is located. Single- and multi- family residential wastewater customers with 6,000 square feet or less net parcel area and having six or fewer dwelling units are assessed a “Simplified Residential” amount, one of three tiered amounts based on their total parcel area. Residential parcels greater than 6,000 square feet of net parcel area or having more than six dwelling units, and any other parcels which do not meet the eligibility criteria for the “Simplified Residential” amount are assessed a “Standard Stormwater” amount based on the measured permeable and impermeable areas of the parcel. See “– Historical Non-Residential” below. If there is more than one active sewer account on a parcel, the calculated stormwater component for the City assessor’s parcel amount is either split equally to all accounts or, in certain cases, allocated based upon agreement from entities that share a parcel. The following table sets forth the historical “Simplified Residential” monthly stormwater component of the sewer service charge by tier for Fiscal Years 2023-24 through 2025-26.

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TABLE 12

HISTORICAL SIMPLIFIED RESIDENTIAL

MONTHLY STORMWATER COMPONENT
OF THE SEWER SERVICE CHARGE BY TIER(1)
FOR FISCAL YEARS 2023-24 THROUGH 2025-26
Fiscal Year
Tier 1(2)
(per 1,000 square feet)
Tier 2(2)
(per 1,000 square feet)
Tier 3(2)
(per 1,000 square feet)
2023-24(3) $2.31 $ 3.60 $ 5.41
2024-25(3) 5.04 7.84 11.79
2025-26(3) 8.24 12.82 19.27
_______________
(1) For single- and multi-family residential customers with 6,000 square feet or less net parcel area and with six or fewer dwelling units.
(2) Tier 1: 0 -1,700 square feet parcel area; Tier 2: 1,701 -3,300 square feet parcel area; and Tier 3: 3,301 -6,000 square feet parcel area.
(3) Rates approved on May 23, 2023.

Source: SFPUC, Financial Services.

The following table sets forth historical single- and multi-family residential estimated average monthly bills for Fiscal Years 2021-22 through 2025-26. The estimated average monthly bills for Fiscal Years 2021- 22 and 2022- 23 are comprised of the monthly service charge and the sewer service charge, whereas the estimated average monthly bills for Fiscal Years 2023 -24 through 2025 -26 are comprised of the monthly service charge, the sanitary sewer component of the sewer service charge and the stormwater component of the sewer service charge.

TABLE 13

HISTORICAL SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL

ESTIMATED A VERAGE MONTHLY BILL
FOR FISCAL YEARS 2021-22 THROUGH 2025-26
Fiscal Year Single-Family(1)
Multi-Family
(per dwelling unit)(2)
2021-22(3) $72.44 $64.95
2022-23(3)(4) 72.51 64.95
2023-24 77.78 69.75
2024-25 87.88 74.83
2025-26 99.08 80.29
_______________
(1) Average billable wastewater volume for single-family residential customers is based on annual historical mean. (2) Average bill for multi-family residential customers is based on an assumed usage of 12.5 CCF of water usage for a three-dwelling unit account.
(3) A temporary drought surcharge of 5% on volumetric rates was in effect from April 1, 2022, through May 1, 2023. Single -family residential average monthly bill reflects actual historical average usage (including actual conservation achieved) and drought surcharge for Fiscal Year 2022- 23. Multi- family residential average monthly bill reflects estimated historical average usage (including estimated conservation achieved) and drought surcharge for Fiscal Year 2022-23, resulting in no net change to the average monthly bill. (4) There was no rate increase in Fiscal Year 2022-23.

Source: SFPUC, Financial Services.

Historical Non-Residential
Prior to July 1, 2023, the Wastewater Enterprise’s rate structure for non- residential customers included a fixed monthly service charge and a variable sewer service charge per discharge unit based on the assumed percentage of metered water usage discharged into the sewer system and sewage loading, which measures the pollutant concentrations within customer discharges ( i.e., suspended solids, oil/grease and chemical oxygen

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demand). The standard flow factor applied to metered water usage to determine billable discharge units was 90% for non-residential accounts. Non -residential customers whose sewage loadings were not based on periodic sampling were charged based on standard parameter loadings established by the SFPUC for each Standard Industrial Classification code.

Beginning July 1, 2023, the Wastewater Enterprise’s sewer service charges for non- residential customers include a fixed monthly service charge, a variable sanitary sewer component, and a stormwater component based on property size and/or parcel characteristics. The sanitary sewer component continues to be based on the assumed percentage of metered water usage discharged into the sewer system and sewage loading, which measures the pollutant concentrations within customer discharges. The standard flow factor and treatment of non- residential customers whose sewage loadings are not based on periodic sampling remains unchanged.

The following table sets forth the historical non -residential monthly service charge and sewage loading charges for each pollutant parameter for Fiscal Years 2021 -22 through 2025- 26. The following table also includes the sewer service charge for Fiscal Years 2021 -22 and 2022- 23, and the sanitary sewer component of the sewer service charge for Fiscal Years 2023-24 through 2025-26.

TABLE 14

HISTORICAL NON-RESIDENTIAL

MONTHLY SERVICE CHARGES
FOR FISCAL YEARS 2021-22 AND 2022-23
Fiscal Year
Monthly
Service
Charge
Sewer Service
Charge
(per discharge
unit(1))
Sanitary
Sewer
Component
(per discharge
unit(1))
Suspended
Solids
(per pound)
Oil/Grease
(per pound)
Chemical
Oxygen
Demand
(per pound)
2021-22 $5.21 $9.46 - $1.647 $1.661 $0.647
2022-23(2) 5.21 9.46 - 1.647 1.661 0.647
2023-24(3)(4) 4.85 - $9.74 1.681 1.053 0.861
2024-25(3)(4) 5.28 - 10.09 1.808 1.142 0.925
2025-26(3)(4) 5.76 - 10.43 1.944 1.239 0.994

(1) One discharge unit equals 100 cubic feet of wastewater. (2) There was no rate increase in Fiscal Year 2022-23.
(3) Does not include stormwater component of the sewer service charge. See “Table 16 – Historical Standard Stormwater – Monthly Stormwater Component of the Sewer Service Charge” below. (4) Rates approved on May 23, 2023.

Source: SFPUC, Financial Services.

In July 2018, the Commission adopted rules for billing stormwater -related sewer service charges for unmetered properties ( i.e., vacant lots, parking lots, and other properties that do not have water or wastewater service). Non -residential owners of unmetered properties were charged a monthly sewer service charge based on whether they had “low runoff” or “standard runoff.” The following table sets forth the historical monthly service charges attributable to stormwater runoff for unmetered parcels for Fiscal Year 2021- 22, and for Fiscal Year 2022- 23, for which there was no rate increase.

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TABLE 15

HISTORICAL MONTHLY SERVICE CHARGES
ATTRIBUTABLE TO STORMWATER RUNOFF FOR UNMETERED PARCELS(1) FOR FISCAL YEARS 2021-22 AND 2022-23
Fiscal Year Low Runoff Standard Runoff
2021-22 $22.16 $36.31
2022-23(2) 22.16 36.31

(1) This was a monthly sewer service charge attributable to stormwater runoff for property owners who did not have water and wastewater accounts with the SFPUC.
(2) There was no rate increase in Fiscal Year 2022-23.

Source: SFPUC, Financial Services.

The stormwater component that became effective on July 1, 2023 is based on the property characteristics of the City assessor’s parcel on which a sewer account is located. Non -residential parcels, mixed -use parcels, lots without wastewater service, residential parcels greater than 6,000 square feet of net parcel area or having more than six dwelling units, and any other parcels which do not meet the eligibility criteria for “Simplified Residential” are assessed the “Standard Stormwater” amount based on the measured permeable and impermeable areas of the parcel.

Impermeable areas include sidewalks, roofs, pavement and other surfaces which do not allow for infiltration of stormwater and therefore generate greater runoff. Permeable areas include lawns, gardens, and other surfaces which do allow infiltration. Permeable and impermeable areas are determined for each parcel using geospatial analysis. If there is more than one active sewer account on a parcel, the calculated stormwater component for the City assessor’s parcel amount is split equally to all accounts. The following table sets forth the historical “Standard Stormwater” monthly stormwater component of the sewer service charge for Fiscal Years 2023- 24 through 2025-26.

TABLE 16

HISTORICAL STANDARD STORMWATER

MONTHLY STORMWATER COMPONENT

OF THE SEWER SERVICE CHARGE
(1)
FOR FISCAL YEARS 2023-24 THROUGH 2025-26
Fiscal Year
Permeable Area
(per 1,000 square feet)
Impermeable Area
(per 1,000 square feet)
2023-24(2) $0.19 $1.89
2024-25(2) 0.41 4.11
2025-26(2) 0.67 6.72
_______________
(1) For non- residential, mixed -use, and large residential parcels (over 6,000 square feet or with more than six dwelling units).
(2) Rates approved on May 23, 2023.

Source: SFPUC, Financial Services.

Current Wastewater Rates and Charges . In April 2026, the Commission approved two years of annual retail water and sewer service rate increases beginning July 1, 2026, and applicable to Fiscal Years 2026 -27 and 2027-28. The structure of the wastewater rates and charges did not change. See “— Wastewater Enterprise Rates and Charges – Historical Wastewater Rates and Charges” above. The sewer service rates applicable to Fiscal Years 2026-27 and 2027 -28 are described below, and reflect an average increase of 15.0% in Fiscal Year 2026 -27 and

14.5% in Fiscal Year 2027 -28. Separate rate schedules continue to apply to residential and non- residential customers.

Current Residential
As described above under “ — Wastewater Enterprise Rates and Charges – Historical Wastewater Rates and Charges,” the Wastewater Enterprise’s sewer service charges for residential customers include a fixed monthly

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service charge, a variable sanitary sewer component, and a stormwater component based on property size and/or parcel characteristics. While the SFPUC can automatically implement a temporary drought surcharge, no drought surcharge is currently in place.

The following table sets forth the adopted single - and multi-family residential monthly service charges and sanitary sewer component of the sewer service charges for Fiscal Years 2026 -27 and 2027-28, which were approved in April 2026. The rates approved in April 2026 reflect an increase in the monthly service charge of 15.0% in Fiscal Year 2026 -27 and 14.5% in Fiscal Year 2027 -28, and an increase in the sanitary sewer component of 10.8% in Fiscal Year 2026-27 and 10.1% in Fiscal Year 2027-28.

TABLE 17

ADOPTED SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL
MONTHLY SEWER SERVICE CHARGES(1)
FOR FISCAL YEARS 2026-27 AND 2027-28
Fiscal Year
Monthly Service
Charge
Sanitary Sewer
Component (per
discharge unit(2))
2026-27(3) $6.62 $20.74
2027-28(3) 7.58 22.84
_______________
(1) Does not include stormwater component of the sewer service charge. See “Table 18 – Adopted Simplified Residential Monthly Stormwater Component of the Sewer Service Charge By Tier” below. (2) One discharge unit equals 100 cubic feet of wastewater. (3) Rates approved on April 28, 2026.

Source: SFPUC, Financial Services.

The following table sets forth the adopted “Simplified Residential” monthly stormwater component of the sewer service charge by tier for Fiscal Years 2026 -27 and 2027 -28. See “— Wastewater Enterprise Rates and Charges – Historical Wastewater Rates and Charges ” above for a description of the residential stormwater component. The rates approved in April 2026 reflect an increase in the “Simplified Residential” monthly stormwater component of the sewer service charge of approximately 53.3% in Fiscal Year 2026 -27 and 43.1% in Fiscal Year 2027-28.

TABLE 18

ADOPTED SIMPLIFIED RESIDENTIAL

MONTHLY STORMWATER COMPONENT
OF THE SEWER SERVICE CHARGE BY TIER(1)
FOR FISCAL YEARS 2026-27 AND 2027-28
Fiscal Year
Tier 1(2)
(per 1,000 square feet)
Tier 2(2)
(per 1,000 square feet)
Tier 3(2)
(per 1,000 square feet)
2026-27(3) $12.63 $19.66 $29.55
2027-28(3) 18.08 28.13 42.29
_______________
(1) For single- and multi-family residential customers with 6,000 square feet or less net parcel area and with six or fewer dwelling units.
(2) Tier 1: 0 -1,700 square feet parcel area; Tier 2: 1,701 -3,300 square feet parcel area; and Tier 3: 3,301 -6,000 square feet parcel area.
(3) Rates approved on April 28, 2026.

Source: SFPUC, Financial Services.

The following table sets forth single - and multi-family projected average monthly bills (comprised of the monthly service charge, the sanitary sewer component of the sewer service charge and assuming Tier 2 of the stormwater component of the sewer service charge) for Fiscal Years 2026 -27 and 2027-28.

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TABLE 19

SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL

PROJECTED AVERAGE MONTHLY BILL
FOR FISCAL YEARS 2026-27 AND 2027-28

Fiscal Year Single-Family(1)
Multi-Family
(per dwelling unit)(1)
2026-27(2) $113.39 $90.87
2027-28(2) 131.64 103.42
_______________
(1) Average billable wastewater volume for single- family residential customers is based on a projected volume of 420 cubic feet of billable wastewater discharges. Average water consumption amount for multi -family residential customers is assumed to be 1,200 cubic feet of water per month, or 1,140 billable discharge units, for 3 dwelling units. Assumes Tier 2 of the Simplified Residential amounts for the stormwater component of the sewer service charge.
(2) Rates approved on April 28, 2026.

Source: SFPUC, Financial Services.

Effective September 2023, the SFPUC’s Customer Assistance Program offers a two -tiered discount off wastewater charges for individually metered single -family residential customers. Customers with incomes below 50% of the area median income receive a 25% discount and customers with incomes below 30% of the area median income receive a 40% discount. In addition, the SFPUC’s Low -Income Non-Profit Housing Program offers a 15% discount off wastewater charges for residential customers in properties owned and operated by certain nonprofits.

Finally, the SFPUC’s Community Housing Program offers a 50% discount off wastewater charges for certain single - room-occupancy hotels providing transitional housing to the homeless and general assistance recipients.

Current Non-Residential
As described above under “ — Wastewater Enterprise Rates and Charges – Historical Wastewater Rates and Charges ,” the Wastewater Enterprise’s sewer service charges for non -residential customers include a fixed monthly service charge, a variable sanitary sewer component, and a stormwater component based on property size and/or parcel characteristics.

The following table sets forth the adopted non- residential monthly service charge, the sanitary sewer component of the sewer service charge, and sewage loading charges for each pollutant parameter for Fiscal Years 2026-27 and 2027-28, which were approved in April 2026. The rates approved in April 2026 reflect an increase in the monthly service charge of 15.0% in Fiscal Year 2026- 27 and 14.5% in Fiscal Year 2027- 28, an increase in the sanitary sewer component of 8.7% in Fiscal Year 2026 -27 and 7.8% in Fiscal Year 2027- 28, an increase in the suspended solids loading charges of 13.4% in Fiscal Year 2026- 27 and 12.9% in Fiscal Year 2027-28, an increase in the oil/grease loading charges of 14.5% in Fiscal Year 2026- 27 and 14.0% in Fiscal Year 2027- 28, and an increase in the chemical oxygen demand loading charges of 13.3% in Fiscal Year 2026 -27 and 12.8% in Fiscal Year 2027 -

28. A-58
TABLE 20

ADOPTED NON-RESIDENTIAL
MONTHLY SEWER SERVICE CHARGES(1)
FOR FISCAL YEARS 2026-27 AND 2027-28
Fiscal Year
Monthly Service
Charge
Sanitary Sewer
Component (per
discharge unit(2))
Suspended
Solids
(per pound)
Oil/Grease
(per pound)
Chemical
Oxygen Demand
(per pound)
2026-27(3) $6.62 $11.34 $2.205 $1.418 $1.126
2027-28(3) 7.58 12.22 2.489 1.617 1.270

(1) Does not include stormwater component of the sewer service charge. See “Table 21 – Adopted Standard Stormwater – Monthly Stormwater Component of the Sewer Service Charge” below. (2) One discharge unit equals 100 cubic feet of wastewater. (3) Rates approved on April 28, 2026.

Source: SFPUC, Financial Services.

The following table sets forth the adopted “Standard Stormwater” monthly stormwater component of the sewer service charge for Fiscal Years 2026 -27 and 2027- 28. See “— Wastewater Enterprise Rates and Charges – Historical Wastewater Rates and Charges” above for a description of the non- residential stormwater component.

The rates approved in April 2026 reflect an increase in the rates for permeable areas of approximately 53.3% in Fiscal Year 2026 -27 and 43.1% in Fiscal Year 2027- 28, and an increase in the rates for impermeable areas of approximately 53.3% in Fiscal Year 2026-27 and 43.1% in Fiscal Year 2027-28.

TABLE 21

ADOPTED STANDARD STORMWATER

MONTHLY STORMWATER COMPONENT
OF THE SEWER SERVICE CHARGE(1)
FOR FISCAL YEARS 2026-27 AND 2027-28
Fiscal Year
Permeable Area
(per 1,000 square feet)
Impermeable Area
(per 1,000 square feet)
2026-27(2) $1.03 $10.30
2027-28(2) 1.47 14.75
_______________
(1) For non- residential, mixed -use, and large residential parcels (over 6,000 square feet or with more than six dwelling units).
(2) Rates approved on April 28, 2026.

Source: SFPUC, Financial Services.

Appeals. While most customers are billed for sewer usage based on standard flow factor assumptions, customers may appeal this determination. For example, it is assumed that 90% of the volume of water measured at the customer meter for a single- family residential user is discharged to the sewer system as wastewater requiring treatment. Customers who can demonstrate higher rates of consumptive use than that reflected in the applicable flow factor, such as irrigation, can apply to the Residential Users Appeals Board for a lower flow factor ( i.e., percentage of metered water returned to the sewage system).

Revenues
Sewer Service Charges . Sewer service charges are imposed based on discharge volume estimates and, in the case of non-residential users, suspended solids, oil and grease and chemical oxygen demand. See “ – Wastewater Enterprise Rates and Charges.” The following table shows billed discharge by category for Fiscal Years 2020- 21 to 2024-25.

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TABLE 22

ANNUAL BILLED DISCHARGE BY CATEGORY
FOR FISCAL YEARS 2020-21 TO 2024-25
Fiscal Year
Volume
(Hundred Cubic
Feet)
Suspended Solids
(Thousand Pounds)(1)
Oil and Grease
(Thousand Pounds)(1)
Chemical Oxygen
Demand
(Thousand Pounds)(1)
2020-21 21,242,770 35,796 11,335 91,729
2021-22 20,985,472 35,256 11,339 90,766
2022-23 21,014,073 35,288 11,357 91,226
2023-24 21,603,576 36,538 11,700 93,911
2024-25 21,066,588 35,410 11,413 90,892

(1) Listed pounds of strength parameters include both usage by non- residential users, for whom strengths are calculated and assessed separately, as well as assumed usage for residential users, for whom assumed strengths are embedded in the billed volumetric rate.

Source: SFPUC, Financial Services.

The following table shows sewer billings by customer class for Fiscal Years 2020- 21 to 2024-25. For Fiscal Year 2024-25, the top 10 retail customers accounted for approximately 3.6% of sewer billings.

TABLE 23

ANNUAL SEWER BILLINGS BY USER TYPE
FOR FISCAL YEARS 2020-21 TO 2024-25
(IN THOUSANDS)
User Type 2020-21 2021-22 2022-23 2023-24 2024-25
Multi-Family Residential $153,611 $161,553 $167,375 $170,687 $190,696 Single-Family Residential 95,297 96,687 96,545 99,207 113,853 Subtotal Residential $248,908 $258,240 $263,920 $269,894 $304,549

Commercial $61,071 $78,207 $86,205 $89,669 $99,077
Municipal Customers 7,605 8,829 9,197 10,825 13,550
Suburban 3 2 3 4 1
Total $317,587 $345,278(1) $359,325(2) $370,392(3) $417,177(4)

(1) Increase in Fiscal Year 2021 -22 billings primarily due to planned rate increase implemented on July 1, 2021; also includes two months of mandatory temporary drought surcharge of 5% effective as of April 1, 2022. (2) Increase in Fiscal Year 2022-23 billings primarily due to mandatory temporary drought surcharge of 5% in place through May 1, 2023.
(3) Increase in Fiscal Year 2023-24 billings primarily due to _____. (4) Increase in Fiscal Year 2024-25 billings related to implementation of citywide stormwater portion of sewer bill.

Source: SFPUC, Financial Services.

Sewer Account Billing . Sewer service charges are billed on a combined water and sewer utility bill on either a monthly or bi -monthly basis. Payments are due 15 days after the bill date. If payments are not made, late payment charges are assessed 15 days from the due date or 30 days from the bill date.

Delayed Billing. The SFPUC relies on Advanced Metering Infrastructure (“AMI ”) for the collection of its customer usage information for almost all of its customers. The AMI system uses a transmitter to relay water meter readings to the SFPUC billing system. The AMI system in use is nearing the end of its useful life and is beginning to experience an acceleration of transmitter malfunction with unit components requiring replacement. In summer 2023, the SFPUC experienced a procurement delay for transmitter replacement parts due to supply chain challenges with the vendor, resulting in a growing backlog of unbilled accounts across the SFPUC’s San Francisco service area.

Approximately $6.6 million in unbilled revenues accrued as a receivable in Fiscal Year 2023- 24.

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The SFPUC immediately implemented an action plan to bill and collect the unbilled revenues that included prioritizing and accelerating field service visits to address malfunctioning meter transmission units and metering equipment; reassigning plumbers from other divisions to accelerate the replacement of the malfunctioning AMI components for usage data to be transmitted from affected meters; expediting the hiring of new staff and retaining contractors to accelerate processing of delayed bills for affected accounts; enhancing the billing system to increase the estimation threshold from three consecutive months to 36 consecutive months; and developing an automated workflow to expedite the processing of affected accounts with delayed bills and payment plans. While the billing delays described above have been resolved, the SFPUC cannot ensure that such billing delays will not occur in the future.

Delinquencies. Accounts become delinquent 15 days after a second unpaid combined water and sewer utility bill. Water service may be subject to disconnection, or the placement of a lien against the property for non- payment of water and sewer services. Once an account is delinquent, a series of notices are sent to the customer and if payment is still not received, action to shut -off the water supply is initiated. If the delinquent account is in the name of the property owner, however, and payment is still not received despite such notices, the customer will receive a lien warning notice. After a lien notice is delivered, a lien hearing is held and, if the delinquent balance still remains outstanding, the lien is recorded and can only be removed upon full payment of all unpaid charges, together with administrative fees and interest. Liens that remain unpaid during the Fiscal Year in which they are recorded are transferred to the City Tax Collector’s Office, Bureau of Delinquent Revenues for collection as a lien against the property. Closed accounts for which property transfers occurred prior to recording the lien and closed accounts with balances of less than $25 are generally written off as uncollectible.

The number of wastewater accounts that are delinquent and the amount of accounts receivable from delinquent bills have grown significantly since the beginning of the COVID -19 pandemic. As of July 1, 2019, the number of delinquent wastewater accounts more than 90 days past due was 2,195 and the amount of accounts receivable from such delinquent wastewater accounts totaled approximately $473,889. By contrast, as of July 1, 2025, the number of delinquent wastewater accounts more than 90 days past due was 16,791 and the amount of accounts receivable from such delinquent wastewater accounts totaled approximately $18.4 million. The table below shows the amount of accounts receivable from delinquent wastewater accounts as of July 1, 2023, July 1, 2024 and July 1, 2025.
(Remainder of Page Intentionally Left Blank)

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TABLE 24

ACCOUNTS RECEIV ABLES AGING REPORT

As of
July 1, 2023
As of
July 1, 2024
As of
July 1, 2025
Period Amount
Percent of
Total Amount
Percent of
Total Amount
Percent of
Total
0 - 30 Days $15,810,268 45.58% $20,078,248 41.00% $19,192,953 43.20% 31 - 60 Days 2,620,040 7.55% 14,470,324 29.55% 4,090,111 9.21% 61 - 90 Days 1,653,812 4.77% 1,566,211 3.20% 2,761,619 6.22% Over 90 Days(1) 14,604,581 42.10% 12,862,175 26.26% 18,385,530 41.38% Total(2) $34,688,702 100.00% $48,976,957 100.00% $44,430,213 100.00%

Credit Balances (1,306,835) (1,231,106) (1,658,322)

Total Aged Receivables $33,381,867 $47,745,851 $42,771,891

Less Receivables from Municipal
Customers
Less Allowance for Doubtful
Accounts (10,626,516) (13,215,376) (12,378,082)
Accounts Receivable, Net of
Allowance $22,755,351 $34,530,475 $30,393,809

(1) Increase as of July 1, 2025 is primarily attributable to approximately $6.6 million of Fiscal Year 2023 -24 unbilled broken- meter sewer charges that were billed in Fiscal Year 2024-25. Payment plans were offered to affected customers. (2) Totals may not add due to rounding.

Source: SFPUC, Financial Services.

The State Water Resources Control Board previously created the California Water and Wastewater Arrearages Payment Program to provide relief to community water and wastewater systems for unpaid bills related to the COVID -19 pandemic. The funding covered water debt from residential and commercial customers accrued between March 4, 2020 and June 15, 2021. The SFPUC received approximately $15.2 million of funding under the original arrearages program, $9.3 million of which has been credited against eligible wastewater accounts. In July 2023, Governor Newsom signed a budget trailer bill expanding the program to December 31, 2022. The SFPUC has received approximately $19.7 million of funding under the extended arrearages program, $11.6 million of which has been credited against eligible wastewater accounts.

As part of the SFPUC’s Customer Assistance Program effective July 1, 2023, the Commission approved the suspension of the application of late payment charges to single -family residential water and wastewater accounts which are past -due on their bills, as well as a shutoff and lien policy which establishes that all accounts with household incomes at or below 50% of area median income that are enrolled in the SFPUC’s Customer Assistance Program and maintain engagement with the SFPUC are eligible to be exempted from disconnection or lien due to nonpayment. For more information regarding the SFPUC’s Customer Assistance Program, see “ – Wastewater Enterprise Rates and Charges – Current Wastewater Rates and Charges – Current Residential.” Because of these collections processes, the SFPUC’s annual write- offs for wastewater accounts remain relatively low. The following table shows a five -year history of write -offs for uncollectible accounts, excluding Municipal Customers:

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TABLE 25

WRITE-OFFS FOR UNCOLLECTIBLE ACCOUNTS
FISCAL YEARS 2020-21 TO 2024-25
Fiscal Year Amount
2020-21 $1,801
2021-22(1) 0
2022-23 1,784
2023-24 214,581
2024-25(2) 0

(1) No amount for write -offs for uncollectible accounts in Fiscal Year 2021- 22 due in part to the suspension in collection activities from the COVID-19 pandemic.
(2) No amount for write -offs for uncollectible accounts in Fiscal Year 2024 -25 as all uncollectible accounts had been written off in prior year.

Source: SFPUC, Financial Services.

Affordability. Nearly all retail customers are also served by the Water Enterprise and such retail customers receive a single monthly bill reflecting both charges for water service and charges for sewer service. The SFPUC’s affordability efforts are therefore focused on the cost of water service and sewer service viewed as a whole. The SFPUC is engaged in a major capital program for the Wastewater Enterprise and anticipates that significant increases in sewer charges will be required in addition to anticipated retail rate increases for water service. The average single family residential combined water and sewer bill is projected to increase 11.4% and 11.7% in Fiscal Year 2026-27 and Fiscal Year 2027 -28, respectively. Affordability concerns may impact discussions with respect to retail rates for water and wastewater service and may, among other things, require the SFPUC to prioritize and defer capital projects for the Water Enterprise and the Wastewater Enterprise.

Capacity Charges. Effective July 1, 2005, any customer requesting a new connection to the sewer system or requiring additional collection or treatment capacity because of any addition, improvement, modification or change in use of an existing connection as determined solely by the General Manager must pay a capacity charge for the new or additional capacity required to serve the customer. The capacity charge is site specific and may not be sold, traded or conveyed in a manner to another site or customer. The capacity charge does not convey or imply ownership in or of any facilities of the Wastewater Enterprise.

Effective July 1, 2014, capacity charges are assessed based on water meter equivalents, which provide a direct estimate of wastewater flow to the system, and Standard Industrial Classification code, which accounts for wastewater strength. For a single residential customer with a 5/8” water meter, the wastewater capacity charge fee for Fiscal Year 2026 -27 is $6,155. The capacity charge is adjusted on July 1 of each subsequent year by the annual change in the 20-City Average Construction Cost Index published by Engineering News Record Magazine.

Capacity charges have averaged approximately 0.9% of revenues from Fiscal Year 2021 -2022 through 2024-25.

Recent Factors Impacting Wastewater Revenues
Billed sewer discharge volumes are based on metered water usage; therefore, lower than anticipated water usage results in lower than anticipated revenues. Retail water usage was approximately 53.6 mgd in Fiscal Year 2020-21, and approximately 53.8 mgd in Fiscal Year 2024- 25, approximately 12% lower than pre -pandemic Fiscal Year 2018 -19 levels. Several factors have contributed to the SFPUC’s reduced retail water sales in recent years, including, but not limited to, certain developments in the local San Francisco economy and weather conditions. See “THE WASTEWATER ENTERPRISE – Service Area – Recent Economic Developments .” For example, there has been a general decline in San Francisco’s population in recent years due to, among other factors, widespread business closures, worker migration out of San Francisco as a result of remote work policies, a general decline in tourism, and unemployment concentrated recently in the technology- heavy information, professional and business services sectors, which can be attributed in some part to the COVID-19 pandemic.

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Specifically, according to the United States Census Bureau, in calendar year 2019, prior to the onset of the COVID-19 pandemic, the daytime population in San Francisco was 1,150,041 people and the nighttime (resident) population was 881,549 people. In calendar year 2024 (most recent data available from the United States Census Bureau), the daytime population was 991,225 people (13.8% lower than calendar year 2019) and the nighttime population (resident) was 827,526 people (6.1% lower than calendar year 2019). See also “Table 5 – City and County of San Francisco Population – Calendar Years 2020 to 2024.” While comparable data is not yet available from the United States Census Bureau for calendar year 2025, reports from the California Department of Finance, Demographic Research Unit, show a 0.4% decline in the resident population between July 2024 and July 2025. In addition, San Francisco still lags the State as a whole in time spent at workplaces, and weekly office attendance has only reached approximately 37% of pre -pandemic levels, as compared to 67% in Austin, Texas, 42% in Los Angeles, California and 52% in New York, New York, all as of January 7, 2026. The City has also experienced the largest increase in office vacancy among major urban office markets in the United States. Office vacancy in San Francisco was estimated at 34%, as compared to approximately 5% before the COVID -19 pandemic, and as further compared to 26% in Austin, Texas, 29% in Los Angeles, California and 14% in New York, New York, all as of January 2026.

In addition, weather conditions and actions taken in response thereto over the past several years have resulted in reduced water usage. Water Years 2020 to 2022 represent the driest three -year period on record for California. During such time, retail water sales declined as customers were asked to conserve water. Precipitation and snowpack in Water Year 2023 was significantly above average, while precipitation and snowpack in Water Year 2024 was above average. Water Year 2025 was average, and Water Year 2026 is trending to be average. In years with greater than normal rainfall, retail water sales generally decline as customers typically reduce water use for outdoor irrigation. Because billed sewer discharge volumes are based on metered water usage, lower than anticipated water usage results in lower than anticipated revenues for the Wastewater Enterprise.

Operating and Maintenance Expenses
“Operating and Maintenance Expenses ” cover the general operational expenses of the Wastewater Enterprise. These expenses include labor and employment benefits, contractual services, materials and supplies, depreciation, general and administrative, services from other departments and other miscellaneous costs. See “HISTORICAL OPERATING RESULTS” and “THE PUBLIC UTILITIES COMMISSION – Employee Relations.” Services from other departments include payment for services from other City departments, such as the City Attorney’s Office and the General Services Agency.

Allocation of Costs . Various common costs incurred by the SFPUC are allocated among the Wastewater Enterprise, the Water Enterprise and the Power Enterprise. Allocations are based on methodology established by an independent indirect cost study, and SFPUC management’s best estimates and may change from year to year depending on activities undertaken by each enterprise and information available.

For Fiscal Years 2023-24 and 2024-25, the SFPUC allocated $35.8 million and $45.3 million, respectively, in administrative costs to the Wastewater Enterprise. For Fiscal Year 2025 -26, the SFPUC has budgeted $49.9 million in administrative costs to the Wastewater Enterprise. Administrative costs are recorded as personal service expenses and also in other various operating expenses in the Wastewater Enterprise financial statements.

Payments to/from the City . The SFPUC receives payments from other City agencies for their share of the proportionate cost of the wastewater utility service provided to them. For Fiscal Years 2023- 24 and 2024- 25, these service deliveries generated approximately $7.2 million and $8.8 million in revenues, respectively. Over the past five Fiscal Years, including Fiscal Year 2024 -25, revenues from service deliveries have averaged approximately

1.6% of Wastewater Enterprise revenues. For Fiscal Year 2025 -26, the SFPUC has budgeted $11.7 million in revenues from service deliveries.

A variety of City departments provide services such as engineering, purchasing, legal, telecommunications and human resources to the SFPUC, and charge amounts designed to recover those costs. For Fiscal Years 2023- 24 and 2024- 25, these charges totaled approximately $38.8 million and $38.9 million, respectively. For Fiscal Year 2025-26, the SFPUC has budgeted $40.7 million for such charges.

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The SFPUC makes payments to the City relating to the financing of the SFPUC’s headquarters at 525 Golden Gate Avenue, San Francisco, California. See “OBLIGATIONS PAYABLE FROM NET REVENUES – Other Subordinate Obligations Payable from Net Revenues.” Financial Management Policies
The SFPUC makes no representation that the following policies and targets will not be revised or amended and, except to the extent required for compliance with the terms of the Indenture, makes no representation that these policies will be followed by the SFPUC or that targets will be met.

Debt Management Policies and Procedures . The SFPUC has established “Debt Management Policies and Procedures” (the “Debt Policies”) for debt financing under its jurisdiction. The SFPUC has also established separate “SFPUC Municipal Securities Disclosure Policies and Procedures” (the “Disclosure Policies ”) which are appended to the Debt Policies. The Debt Policies, including the appended Disclosure Policies, apply to all SFPUC enterprises, including the Wastewater Enterprise, and are intended to enable the SFPUC to effectively manage its debt issuance and administration practices and comply with all debt issuance and administration rules and regulations. The Debt Policies are reviewed bi -annually and revised, as necessary, with Commission approval. Revisions to the Debt Policies were most recently adopted by the Commission in 2019.

Debt Service Coverage Policy. The Commission adopted a debt service coverage policy (the “Debt Service Coverage Policy”) in 2017, which applies to all SFPUC enterprises, including the Wastewater Enterprise. Pursuant to the Debt Service Coverage Policy, to ensure that the SFPUC maintains access to low -cost capital and retains financial flexibility for contingencies, the SFPUC will aim to adopt budgets, rates and financial plans that generate revenues such that debt service coverage calculated on an Indenture basis (including certain available fund balances) will be at least 1.35 times and debt service coverage calculated on a current basis (Net Revenues divided by debt service on Bonds and Parity Loans) will be at least 1.10 times.

Separate from the Debt Service Coverage Policy, the Indenture includes a rate covenant that debt service coverage calculated on an Indenture basis (including certain available fund balances) will be at least 1.25 times. See “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement, and see “HISTORICAL OPERATING RESULTS.”
Capital Financing Policy . The Commission adopted a capital financing policy (the “ Capital Financing Policy”) in 2017, which applies to all SFPUC enterprises, including the Wastewater Enterprise. The SFPUC relies mainly on current revenue and debt financing to pay for capital assets or improvements. According to the Capital Financing Policy, the appropriate mix of current revenues versus debt financing depends, in part, on the capital investment lifecycle of the Wastewater Enterprise. Accordingly, the SFPUC has determined that over the 10 -year financial planning horizon, the SFPUC will aim to pay for a minimum ranging between 15% and 30% of the Wastewater Enterprise’s capital budget from current revenues.

Fund Balance Reserve Policy . The Commission adopted its most recent fund balance reserve policy (the “Fund Balance Reserve Policy ”) in 2022, which applies to the Wastewater Enterprise and the Water Enterprise.

Pursuant to the Fund Balance Reserve Policy, for the time period covered in the 10- year financial plan, the SFPUC will aim to propose operating and capital budgets and rates for adoption such that the Fund Balance Reserve totals a minimum of 90 days or 25% of operations and maintenance expenses (including programmatic projects and excluding debt service and revenue -funded capital) throughout the forecast period. Amounts in excess of such minimum will be considered for contingencies and rate stabilization. The Commission adopted a separate fund balance reserve policy for the Power Enterprise in 2022.

Affordability Policy . The Commission adopted its most recent affordability policy (the “ Affordability Policy”) in 2023, which applies to the Wastewater Enterprise and the Water Enterprise. Pursuant to the Affordability Policy, the SFPUC will, when adopting rates and approving budgets and financial plans, review the average residential combined water and sewer bill over the next 20 years, and aim to set rates that will result in the average residential combined bill not exceeding 3% of income for a “typical” customer (defined as the 40 th percentile San
Francisco household income), 7% of income for a “low -income” customer (defined as the 20 th percentile San Francisco household income), and 5% of income for a “low -income” customer after accounting for enrollment in

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applicable low -income discount programs (see “FINANCIAL OPERATIONS – Wastewater Enterprise Rates and Charges”). If such average residential combined bills are projected to exceed the targets within the 20 -year period, the SFPUC must provide a rationale and develop strategies to reduce costs, including providing progress reports to the Commission in subsequent budget and financial plan adoptions. For Fiscal Years 2026 -27 and 2027- 28, the SFPUC expects that the average residential combined bill will be approximately 2.0% and 2.2%, respectively, of income for a “typical” customer, 4.9% and 5.3%, respectively, of income for a “low -income” customer, and 2.9% and 3.2%, respectively, of income for a “discount -enrolled low-income” customer after accounting for enrollment in applicable low-income discount programs.

Risk Management and Insurance
The SFPUC’s risk management program encompasses both self -insured and insured coverage. Risk assessments and coverage are coordinated by the SFPUC Risk Manager through the Office of the City Administrator, Risk Management Division. With certain exceptions, the City and SFPUC’s general approach is to first evaluate self -insurance for the risk of loss to which it is exposed. Based on this analysis, the SFPUC has determined that mitigating risk through a “self -retention” mechanism is more economical as it manages risks internally and administers, adjusts, settles, defends and pays claims from budgeted resources ( i.e., pay-as-you-go).

When economically more viable or when required by debt financing covenants, the SFPUC obtains commercial insurance.

At least annually, the City reviews and actuarially determines general liability and workers’ compensation liabilities, which are recorded as “Damages and Claims” and “Accrued Worker’s Compensation” in the financial statements.

The SFPUC does not maintain commercial earthquake coverage, with certain minor exceptions, such as a sub-limit for fire-sprinkler leakage due to earthquake under the Property Insurance program.

The following is a summary of the SFPUC’s coverage approach to risk:

Primary Risks Typical Coverage Approach
General Liability Purchased Insurance & Self Insured
Property Purchased Insurance & Self Insured
Electronic Data Processing Purchased Insurance & Self Insured Workers’ Compensation Self Insured through Citywide Pool Other Risks Typical Coverage Approach
Surety Bonds Contractual Risk Transfer
Professional Liability Contractual Risk Transfer
Errors & Omissions Contractual Risk Transfer
Builder’s Risk Contractual Risk Transfer
Public Officials Liability Purchased Insurance
Employment Practices Liability Purchased Insurance
Crime Purchased Insurance
Cyber Liability Purchased Insurance
Tenants’ and Users’ Liability
Insurance Policy
Purchased Insurance
Active Assailant Policy Purchased Insurance

The SFPUC’s property risk management approach varies depending on whether the facility is currently under construction, or if the property is part of revenue -generating operations. The majority of purchased insurance is for revenue -generating facilities, debt- financed facilities and mandated coverage to meet statutory or contractual requirements. The SFPUC’s insured coverage is through an insurance policy purchased by the City specifically for the SFPUC, which provides up to $500 million of coverage against certain losses with respect to scheduled property, including wildfire coverage. The schedule includes properties for the SFPUC’s enterprises which have a total value of approximately $3.0 billion. See also “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Insurance Coverage” in the forepart of this Official Statement.

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Additionally, the SFPUC acknowledges the importance of aligning strategic planning to the risk management process and has implemented an Enterprise Risk Management program to meet this need. The framework provides a strategic approach to managing operational risks. The Enterprise Risk Management program has been implemented thus far for Information Technology Services, the Power Enterprise and CleanPowerSF and plans are in place to continue implementation across the remainder of the SFPUC as needed.

Capital Project Risk Management . For capital construction projects, similar to the City’s practice, the SFPUC has utilized traditional contractual risk transfer, contractor -controlled insurance programs or other alternative insurance programs. Under the latter two approaches, the insurance program usually provides coverage for the entire construction project, along with multiple risk coverages, such as general liability and workers compensation. When a contractual risk transfer is used for capital construction risks, the SFPUC requires each contractor to provide its own insurance, while ensuring that the full scope of work be covered with satisfactory levels to limit the SFPUC’s risk exposure balanced by that which is commercially available.

Performance bonds are required, and builder’s risk insurance must be purchased, in most phases of the construction contracting process for such phases, as bid, performance, and payment or maintenance. Additionally, bonds may be required in other contracts where goods or services are provided to ensure compliance with applicable terms and conditions such as warranty.

Builder’s risk policies of insurance are required to be provided either through an owner -controlled insurance program or the contractor on all construction projects for the full value of the construction.

Professional liability policies are either directly purchased insurance on behalf of the SFPUC, transferred through contract to the contracted professional, or retained through self -insurance on a case-by-case basis depending on the size, complexity or scope of construction or professional service contracts. Professional liability policies are typically purchased for services provided by engineers, architects, design professionals and other licensed or certified professional service providers. See also “RISK FACTORS – Risks Related to Wastewater Enterprise Facilities and Operations – Casualty Losses” in the forepart of this Official Statement.

Investment of SFPUC Funds
The SFPUC’s pooled deposits and investments are invested pursuant to State law and the investment policy established from time to time by the City Treasurer and overseen by the Treasury Oversight Committee. The current policy seeks the preservation of capital, liquidity and yield, in that order of priority. Under the City Treasurer’s current investment procedures, the SFPUC’s pooled deposits and investments are invested in the City’s larger pooled investment fund (the “ City Pool”). Among other purposes, the City Pool serves in effect as a disbursement account for expenditures from the City’s various segregated and pooled funds. Investments are generally made so that securities can be held to maturity. The City Treasurer calculated the weighted average maturity of these investments as of March 31, 2026, to be 555 days (most recent data available).

The following table sets forth the approximate book values of the investments held in the City Pool reported by the City Treasurer as of March 31, 2026. The Wastewater Enterprise’s pooled deposits and investments accounted for approximately $516.5 million, or approximately 2.881%, of such amounts. The Water Enterprise and the Power Enterprise each have their own pooled deposits and investments that are separate from the Wastewater Enterprise.

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TABLE 26

CITY POOLED INVESTMENT FUND
(AS OF MARCH 31, 2026)

Investments
Book Value
(millions)
U.S. Treasuries $ 5,546
Federal Agencies 7,872
Negotiable CDs 1,755
Commercial Paper 984
Medium Term Notes 163
Money Market Funds 1,297
Supranationals 141
Secured Bank Deposit 166
Total(1) $17,924

Source: Office of the Treasurer and Tax Collector of the City and County of San Francisco.

The SFPUC’s non- pooled deposits and investments consist primarily of funds related to the SFPUC’s Outstanding Bonds, which are invested pursuant to policy established by the SFPUC, subject to the restrictions contained in the applicable bond documentation.

HISTORICAL OPERATING RESULTS
Summary of Historical Operating Results and Debt Service Coverage The historical results of operations reflected in the following table are based on the tables contained in the SFPUC’s audited financial statements entitled “Statements of Revenues, Expenses and Changes in Net Position” and “Statements of Cash Flows” for the Fiscal Years listed. This table excludes certain non -operating revenue and expenses included in the “Statements of Revenues, Expenses and Changes in Net Position” table in the audited financial statements. Consequently, “Operating and Investment Income” presented in this table differs from “Change in net position” in the “Statements of Revenues, Expenses and Changes in Net Position” table in the audited financial statements. The calculation of debt service coverage includes net operating income and funds not budgeted to be spent in the next twelve months and legally available to pay debt service, as permitted under the Indenture. The audited financial statements of the Wastewater Enterprise for Fiscal Years 2024 -25 and 2023 -24, prepared by the SFPUC, are attached as Appendix B to this Official Statement. The audited financial statements were audited by Macias Gini & O’Connell LLP, independent certified public accountants. The following table should be read in conjunction with such financial statements. Macias Gini & O’Connell LLP has not reviewed the following table. See “APPENDIX B – SFPUC WASTEWATER ENTERPRISE FINANCIAL STATEMENTS.” In the following discussion, all $’s are in thousands.

The Wastewater Enterprise’s total revenues of $474,126 in Fiscal Year 2024- 25 represented an increase of $54,167, or 12.9%, from the prior year. Increases included $42,339 in sewer service charges, $18,537 in investing activities, and $561 in capacity charges, partially offset by a decrease of $7,270 in other revenues. Since Fiscal Year 2020-21, revenues have increased by an average of 9.9% per year.

In Fiscal Year 2024 -25, sewer service charges were $426,052, an increase of $42,339 or 11.0% from the prior year, mainly due to a 9% rate increase adopted on July 1, 2024 and a 3.7% increase in sanitary flows from residential and non- residential customers. Investing activities increased mainly due to higher interest earned from City Treasury pooled investments, reflecting higher average cash balances and higher interest rates.

The Wastewater Enterprise’s total operating expenses were $284,523, a decrease of $167,708 or 37.1% from the prior year. The decrease was mainly due to lower general and administrative expenses from reduced judgments and claims expenses, and lower other expenses related to decreased project costs for the Westside Pump Station Reliability Improvements, Biosolids Digester Facilities Project, and Treasure Island Capital Improvement

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projects. These decreases were partially offset by higher salary and fringe benefits, services of other departments, depreciation, materials and supplies, and contractual services.

The Wastewater Enterprise maintained debt service coverage exceeding the 1.25x level required by the Indenture. Debt service coverage was 3.64x on an Indenture basis and 2.09x on a current basis in Fiscal Year 2024-

25. (Remainder of Page Intentionally Left Blank)

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TABLE 27

HISTORICAL REVENUE, OPERATING & MAINTENANCE EXPENSE
AND DEBT SERVICE COVERAGE FOR FISCAL YEARS ENDED JUNE 30 (IN THOUSANDS)(1)
2021 2022 2023 2024 2025

OPERATING & INVESTMENT REVENUE
Sewer Service Charges(2) $316,766 $354,526 $352,986 $383,713 $426,052 Other Revenues(3) 5,719 7,037 7,048 8,456 1,186
Investing Activities(4) (1,187) (7,087) 2,556 25,528 44,065 Capacity Charges(5) 3,710 6,280 3,077 2,262 2,823
Total Revenues $325,008 $360,756 $365,667 $419,959 $474,126

OPERATING & MAINTENANCE EXPENSE
Salary and Fringe Benefits(6) $90,449 $63,456 $89,726 $105,835 $128,217 Contractual Services(7) 18,861 19,115 20,777 23,885 24,527 Materials and Supplies(8) 9,091 11,844 14,306 14,474 15,673 Depreciation(9) 72,018 77,573 78,035 82,722 86,476
Services of Other Departments(10) 38,313 39,645 40,999 39,546 44,213 General and Administrative (11) 3,854 6,353 (950) 114,749 (28,959) Other(12) 58,151 37,024 11,390 71,020 14,376
Total Operating Expenses $290,737 $255,010 $254,283 $452,231 $284,523

OPERATING AND INVESTMENT INCOME $34,271 $105,746 $111,384 $(32,272) $189,604

COVERAGE CALCULATION(13)
Operating and Investment Income $34,271 $105,746 $111,384 $(32,272) $189,604 + Adjustment to Investing Activities(14) 4,356 8,422 2,392 (7,527) (10,676) + Depreciation & Non-Cash Expenses(15) 78,368 77,806 84,450 133,324 86,628 + Changes in Working Capital(16) (8,596) (36,470) (19,376) 95,184 (26,165) = “Net Revenues” 108,399 155,504 178,850 188,709 239,391 + Other Available Funds(17) 197,778 155,331 134,593 165,972 176,917 Funds Available for Bond Debt Service $306,177 $310,835 $313,443 $354,681 $416,307 Bond and Loan Debt Service(18) $82,066 $86,619 $98,811 $91,601 $114,350 DEBT SERVICE COVERAGE (19)
Indenture Basis (17)(20) 3.73x 3.59x 3.17x 3.87x 3.64x
Current Basis (21) 1.32x 1.80x 1.81x 2.06x 2.09x

(1) Operating and Investment Income presented in this table differs from the “Change in net position” presented in the “Statements of Revenues, Expenses and Changes in Net Position” in the audited financial statements set forth in “APPENDIX B – SFPUC WASTEWATER ENTERPRISE FINANCIAL STATEMENTS.” This table presents Debt Service Coverage as defined under the Indenture and excludes certain elements of non -operating revenue and expenses included in the “Statements of Revenues, Expenses and Changes in Net Position” table in the audited financial statements. Examples of excluded elements are grant revenue, interest expense and gains from sale of assets. Totals may not add due to independent rounding. (2) Increase in Fiscal Year 2024 -25 is mainly due to a 9% rate increase adopted on July 1, 2024, a sanitary flow increase of 797,494 ccf or 3.7% from residential and non-residential customers. (3) Decrease in Fiscal Year 2024 -25 is mainly due to the reclassification of service charges to other City departments of Other Revenue reclassified as Charges for Services. (footnotes continue on following page)

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(4) Increase in Fiscal Year 2024- 25 is mainly due to an increase in interest earned from City Treasury pooled investments attributed to higher average cash balances resulting from issuances of the 2024ABCD Bonds and WIFIA loans, as well as higher interest rates.
(5) Increase in Fiscal Year 2024-25 is mainly due to 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.
(6) Increase in Fiscal Year 2024 -25 is mainly due to a 3% increase in cost -of-living adjustment (COLA), a 3% increase in full-time equivalents, and increased other postemployment benefit and GASB 68 pension expenses. (7) Increase in Fiscal Year 2024-25 is mainly due to building and construction, equipment maintenance, and sewage treatment at the Southeast Treatment Plant, reflecting higher maintenance costs. (8) Increase in Fiscal Year 2024-25 is mainly due to building and construction, equipment maintenance, and sewage treatment at the Southeast Treatment Plant, reflecting higher maintenance costs. (9) Increase in Fiscal Year 2024-25 is mainly due to more fixed assets put in service. (10) Increase in Fiscal Year 2024-25 is mainly due to rise in electric utility services provided by Hetch Hetchy Power at the Southeast Treatment Plant.
(11) Decrease in Fiscal Year 2024 -25 is mainly due to reduced judgments and claims expenses based on analysis performed by the City Attorney’s Office and the Controller’s Office. (12) Increase in Fiscal Year 2023 -24 is primarily driven by capital expenses related to the Biosolids Digester Facilities Project and the SEP New Headworks (Grit) Replacement Project. Decrease in Fiscal Year 2024 -25 is mainly due to lower project costs associated with the Westside Pump Station Reliability Improvements, Biosolids Digester, and Treasure Island Capital Improvement projects. (13) The Indenture defines “Net Revenues” on a cash basis. (14) Represents adjustments to show investing activities on a cash basis. (15) Increase in Fiscal Year 2023 -24 is primarily due to a $47.8 million write -off of capital project costs related to the Channel Tunnel/Bayside Drainage project.
(16) Represents adjustments to bring net income to a cash basis. (17) Per the Indenture, includes any fund balances of the SFPUC or the Wastewater Enterprise available for payment of debt service and not budgeted to be expended during the 12 months following a calculation date, excluding monies held in any Reserve Account established under the Indenture. (18) Bond Debt Service and Debt Service Coverage calculated per Indenture are net of capitalized interest and Federal interest subsidy payments; these differ from amounts presented in previous Annual Reports and SFPUC Annual Comprehensive Financial Reports.
(19) Coverage does not include debt service on subordinate obligations, including the Wastewater Enterprise’s share of lease payments associated with the 2009 Golden Gate COPs and debt service on Commercial Paper Notes. (20) Calculated as the sum of Net Revenues plus “Other Available Funds,” divided by debt service on Bonds and Parity Loans. The Indenture includes a rate covenant of 1.25x “Debt Service Coverage.” See “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement. (21) Calculated as Net Revenues divided by debt service on Bonds and Parity Loans.

Source: SFPUC, Financial Services.

PROJECTED OPERATING RESULTS
Table 28 presents projected operating results for the Wastewater Enterprise. These projections are based on an analysis of historical trends, adjusted where appropriate for known or anticipated changes in operations. The projections are also based on the assumption that all rate increases necessary to finance future expenses, including the Wastewater Enterprise’s capital program, will be approved and implemented.

THESE PROJECTIONS, ALL OR SOME OF WHICH MAY OR MAY NOT BE REALIZED, ARE BASED ON THE ISSUANCE OF ADDITIONAL BONDS FOR THE CAPITAL PROGRAM. CHANGES IN THE

CIRCUMSTANCES THAT FORM THE BASES FOR THE ASSUMPTIONS USED IN DEVELOPING THESE

PROJECTIONS, AS WELL AS UNANTICIPATED EVENTS, MAY OCCUR SUBSEQUENT TO THE DATE OF THIS OFFICIAL STATEMENT. THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE PROJECTIONS SHOWN.

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Assumptions Used in Projections
The projections are based on the 2027 Financial Plan, adopted by the Commission on February 10, 2026. In the preparation of the projections set forth in Table 28, the SFPUC has made certain assumptions with respect to conditions that may occur in the future. While the SFPUC believes these assumptions are reasonable for the purpose of the projections, they are dependent on future events, and actual conditions are likely to differ, perhaps materially, from those assumed. To the extent actual future conditions differ from those assumed by the SFPUC or provided to the SFPUC by others, actual results will vary from those projected. This projected information has not been compiled, reviewed or examined by the SFPUC’s independent auditors.

The assumptions used in Table 28 include the following:

Projected Revenue and Rate Increases. Projected revenues are based on projected wastewater service sales and the schedules of rates to be effective in each year. Projected revenues assume the 9.0% annual rate increase for Fiscal Year 2025-26 approved by the Commission in May 2023, and the 15.0% and 14.5% annual rate increases for Fiscal Year 2026 -27 and Fiscal Year 2027 -28, respectively, approved by the Commission in April 2026. Projected revenues also assume a 13.0% annual rate increase for Fiscal Year 2028 -29 and Fiscal Year 2029- 30, which are subject to future approval by the Commission and the ability to reject rate increases by the Board of Supervisors and the voters to the extent permitted by Proposition 218. See “FINANCIAL OPERATIONS – Wastewater Enterprise Rates and Charges.”
Projected Operation and Maintenance Costs of the Wastewater Enterprise. Operation and Maintenance Costs of the Wastewater Enterprise are projected to grow by 4.7% for Fiscal Year 2026 -27, 8.7% for Fiscal Year 2027-28, 6.0% for Fiscal Year 2028- 29, and 3.4% for Fiscal Year 2029- 30. Assumptions reflect inflationary increases. See “THE PUBLIC UTILITIES COMMISSION – Employee Relations – SFPUC.” Projected Debt Service. Projected debt service consists of the projected, not actual, debt service on the 2010B Bonds (net of anticipated Refundable Credits), 2013B Bonds, 2016A Bonds, 2016B Bonds, 2018A Bonds, 2018B Bonds, 2021A Bonds, 2021B Bonds, 2022B Bonds, 2023A Bonds, 2023B Bonds, 2023C Bonds, 2024ABCD Bonds (all net of capitalized interest, and excluding principal on the 2024A Bonds, which qualifies as “Excluded Principal” under the Indenture), 2026A Bonds (which qualify as Balloon Indebtedness under the Indenture), Additional Bonds, nine existing Parity Loans, BDFP WIFIA Bond, STPI WIFIA Bond, and Project 1 WIFIA Bond .

Assumes continuation of the current 5.7% sequestration rate for Refundable Credits (see “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement).

Following the issuance of the 2026A Bonds, the SFPUC anticipates that it will issue approximately $1.9 billion of Additional Bonds between Fiscal Years 2026- 27 and 2029- 30 to finance Wastewater Enterprise capital projects pursuant to the 2027 Capital Plan. The projected debt service during the projection period for the 2026A Bonds and the Additional Bonds assumes a 30- year term with level debt service, a 4.75% interest rate for Fiscal Year 2026-27, a 5.0% interest rate for Fiscal Year 2027 -28, and a 6.0% interest rate for Fiscal Years 2028 -29 through 2029 -30, no debt service reserve fund and up to 24 months of capitalized interest during the projection period. The actual issuance dates, borrowing rates and capitalized interest periods may vary from these assumptions.

The SFPUC may also issue refunding bonds from time to time in response to market conditions in order to achieve debt service savings.
(Remainder of Page Intentionally Left Blank)

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TABLE 28

PROJECTED REVENUE, OPERATING AND MAINTENANCE EXPENSE
AND DEBT SERVICE COVERAGE FOR FISCAL YEAR ENDING JUNE 30 (IN THOUSANDS)(1)
2026 2027 2028 2029 2030

REVENUE
Sewer Service(2) $472,845 $538,407 $613,375 $690,702 $778,263 Capacity Charges 3,610 3,719 3,830 3,945 4,064
Interest Income(3) 6,907 4,815 3,996 3,451 3,714
Other Miscellaneous Income 8,933 9,586 10,032 18,045 18,446 Total Revenues $492,295 $556,527 $631,233 $716,144 $804,486

OPERATION AND

MAINTENANCE COSTS OF THE
WASTEWATER ENTERPRISE(4) $236,422 $247,690 $269,179 $285,374 $295,177 less FUND BALANCE BUDGETED
AND APPROPRIATED(5) (43,705) (23,404) (15,578) 7,517 (203) NET REVENUES(6) $299,578 $332,241 $377,632 $423,252 $509,512

plus OTHER AVAILABLE FUNDS(7) $137,568 $114,165 $98,586 $106,104 $105,901

FUNDS AVAILABLE FOR DEBT
SERVICE $437,147 $446,406 $476,218 $529,356 $615,413

DEBT SERVICE(8)(9) $142,908 $244,667 $280,459 $329,002 $383,258

DEBT SERVICE COVERAGE(9)
Indenture Basis(10) 3.06x 1.82x 1.70x 1.61x 1.61x
Current Basis(11) 2.10x 1.36x 1.35x 1.29x 1.33x

(1) Amounts set forth in the table are projections. Projections for Fiscal Years 2025 -26 through 2029 -30 are based on the 2027 Financial Plan, adopted by the Commission on February 10, 2026. Actual results may differ materially from these projections. See “FORWARD-LOOKING STATEMENTS” in the forepart of this Official Statement, and see “– Assumptions Used in Projections.” Totals may not add due to independent rounding. (2) Reflects approved annual rate increases of 9% for Fiscal Year 2025-26, 15.0% for Fiscal Year 2026- 27, and

14.5% for Fiscal Year 2027-28, and estimated annual rate increases of 13.0% for Fiscal Year 2028-29 and Fiscal Year 2029-30 which are subject to future approval. See “– Assumptions Used in Projections.” (3) Assumes a 3.8% earnings rate on invested cash balance for Fiscal Year 2025 -26 and 3.5% for Fiscal Year 2026- 27 through Fiscal Year 2029-30.
(4) Operating and Maintenance Expenses net of depreciation and other non-cash items per Indenture. (5) __________.
(6) Represents Net Revenues under the Indenture.
(7) Per the Indenture, includes any fund balances of the SFPUC or the Wastewater Enterprise available for payment of debt service and not budgeted to be expended during the 12 months following a calculation date, excluding monies held in any Reserve Account established under the Indenture. (8) Projected debt service consists of the projected, not actual, debt service on the 2010B Bonds (net of anticipated Refundable Credits), 2013B Bonds, 2016A Bonds, 2016B Bonds, 2018A Bonds, 2018B Bonds, 2021A Bonds, 2021B Bonds, 2022B Bonds, 2023A Bonds, 2023B Bonds, 2023C Bonds, 2024ABCD Bonds (all net of capitalized interest, and excluding principal on the 2024A Bonds, which qualifies as “Excluded Principal” under the Indenture), 2026A Bonds (which qualify as Balloon Indebtedness under the Indenture), Ad ditional Bonds, nine existing Parity Loans, BDFP WIFIA Bond, STPI WIFIA Bond, and Project 1 WIFIA Bond. Assumes continuation of the current 5.7% sequestration rate for Refundable Credits (see “SECURITY FOR THE

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BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement). See also “ – Assumptions Used in Projections – Projected Debt Service.” (9) Debt Service and Debt Service Coverage does not include debt service on subordinate obligations, including the Wastewater Enterprise’s share of lease payments associated with the 2009 Golden Gate COPs and debt service on Commercial Paper Notes.
(10) Calculated as the sum of Net Revenues plus “Other Available Funds,” divided by debt service on Bonds and Parity Loans. The Indenture includes a rate covenant of 1.25x “Debt Service Coverage.” See “SECURITY FOR THE BONDS – Rate Covenants – Debt Service Coverage” in the forepart of this Official Statement. (11) Calculated as Net Revenues divided by debt service on Bonds and Parity Loans.

Source: SFPUC, Financial Services.

CONSTITUTIONAL, STATUTORY AND CHARTER LIMITATIONS
The activities of the SFPUC and the Wastewater Enterprise, including, without limitation, the establishment of rates for sewer service and the issuance of Bonds (which include Parity Loans), are subject to several limitations under both State and local law. Certain of such limitations are summarized below. Additionally, such limitations may be revised, enhanced, expanded or otherwise altered as provided under State and local law, including in certain instances by legislation adopted by State, regional or local authorities, including the State Legislature or the Board of Supervisors, or by California or San Francisco voters themselves through the power of initiative or referendum, by voting in favor of amendments to the Charter or in any other lawful manner.

State Law Limitations
Tax and Spending Limitations . The taxing powers of public agencies in the State are limited by Article XIIIA of the California Constitution, added by an initiative amendment approved by the voters on June 6, 1978, and commonly known as Proposition 13.

Article XIIIA limits the maximum ad valorem tax on real property to 1% of “full cash value,” which is defined as “the County Assessor’s valuation of real property as shown on the Fiscal Year 1975- 76 tax bill under ‘full cash value’ or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or reduction in the consumer price index or comparable local data, or declining property value caused by damage, destruction, or other factors.

The tax rate limitation referred to above does not apply to ad valorem taxes to pay the debt service on any indebtedness approved by the voters before July 1, 1978, or on any bonded indebtedness for the acquisition or improvement of real property approved by two-thirds of the votes cast by the voters voting on the proposition.

Under the terms of Article XIIIA and pursuant to an allocation system created by implementing legislation, each county is required to levy the maximum ad valorem tax permitted by Article XIIIA and to distribute the proceeds to local agencies.

Assessed valuation growth allowed under Article XIIIA (new construction, change of ownership and up to 2% annual value growth) is allocated among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools share the growth of base revenues from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation in the following year. The availability of revenues from tax bases to such entities may be affected by the existence of certain successor agencies to former redevelopment agencies that, under certain circumstances, may be entitled to such revenues resulting from the upgrading of certain property values.

Under State law, any fee that exceeds the reasonable cost of providing the service for which the fee is charged may be considered a “special tax” that must be authorized by a two -thirds vote of the electorate.

Accordingly, if a portion of the SFPUC’s wastewater user rates or capacity charges were determined by a court to exceed the reasonable cost of providing service, the SFPUC might not be permitted to continue to collect that portion unless it were authorized to do so by a two- thirds majority of the vote s cast in an election to authorize the collection of that portion of the rates or fees. If the SFPUC were unable to obtain such a two- thirds majority vote

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and were unable to reduce costs, such failure could adversely affect the SFPUC’s ability to pay the debt service on the Bonds.

The United States Supreme Court has upheld Article XIIIA against a challenge alleging violation of equal protection under the Fourteenth Amendment to the United States Constitution.

Proposition 218. Proposition 218, a State ballot initiative known as the “Right to Vote on Taxes Act,” was approved by California voters on November 5, 1996. The initiative added Articles XIIIC and XIIID to the California Constitution, creating additional requirements for the imposition by most local governments of “general taxes,” “special taxes,” “assessments,” “fees,” and “charges.” Articles XIIIC and XIIID became effective, pursuant to their terms, as of November 6, 1996, although compliance with some of the provisions was deferred until July 1, 1997, and certain of the provisions purport to apply to any tax imposed for general governmental purposes ( i.e., “general taxes”) imposed, extended or increased on or after January 1, 1995 and prior to November 6, 1996.

Article XIIID imposes substantive and procedural requirements on the imposition, extension or increase of any “fee” or “charge” subject to its provisions. A “fee” or “charge” subject to Article XIIID includes any levy, other than an ad valorem tax, special tax or assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership. Article XIIID prohibits, among other things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or charge, in the event written protests against the proposed fee or charge are presented at a required public hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a majority of the property owners subject to the fee or charge, or at the option of the agency, by a two -thirds vote of the electorate residing in the affected area, is required not less than 45 days following the public hearing on any such proposed new or increased fee or charge.

The California Supreme Court decisions in Richmond v. Shasta Community Services District , 32 Cal. 4th 409 (2004) (“ Richmond”), and Bighorn- Desert View Water Agency v. Verjil , 39 Cal. 4th 206 (2006) (“ Bighorn”) have clarified uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In Richmond, the Shasta Community Services District charged a water connection fee, which included a capacity charge for capital improvements to the water system and a fire suppression charge. The Court held that both the capacity charge and the fire suppression charge were not subject to Article XIIID because a water connection fee is not a property-related fee or charge because it results from the property owner’s voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the Court stated that a fee for ongoing water service through an existing connection is imposed “as an incident of property ownership” within the meaning of Article XIIID, rejecting, in Bighorn, the water agency’s argument that consumption- based water charges are not imposed “as an incident of property ownership” but as a result of the voluntary decisions of customers as to how much water to use.

The SFPUC provides public notice of proposed wastewater rate increases in accordance with the requirements of Article XIIID through means that include, among others, holding informational presentations at community group meetings, mailings to residential and commercial customers of public hearings on rate increases, and press releases and media campaigns regarding rate increases, followed by public hearings conducted by the SFPUC’s Rate Fairness Board and by the SFPUC itself. The SFPUC also develops and adopts retail utility user rates and fees in accordance with the requirements of Article XIIID(6)(b) that limit property -related fees and charges.

Article XIIIC extends the people’s initiative power to reduce or repeal previously authorized local taxes, assessments, fees and charges. This extension of the initiative power is not limited by the terms of Article XIIIC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In Bighorn, the Court concluded that under Article XIIIC local voters by initiative may reduce a public agency’s water rates and delivery charges. The Court noted, however, that it was not holding that the authorized initiative power is free of all limitations, stating that it was not determining whether the electorate’s initiative power is subject to the public agency’s statutory obligation to set water service charges at a level that will “pay the operating expenses of the agency, … provide for repairs and depreciation of works, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due.”

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Article XIIID imposes the substantive requirement that any wastewater charges may not exceed the proportional cost of providing service to customers. The Fourth District of the California Court of Appeal decision in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, 235 Cal.App.4th 1493 (2015), clarified that tiered rate structures are compatible with the cost of service limitations of Article XIIID when each tier structure is supported by cost of service calculations. The court held that San Juan Capistrano’s water rates violated Article XIIID because no evidence in the record adequately showed that each tier corresponded to the cost of providing service at a given level of usage.

The courts have not fully interpreted the provisions of Proposition 218. The SFPUC is unable to predict how courts will further interpret Article XIIIC and Article XIIID, and what, if any, further implementing legislation will be enacted. Under the Bighorn case, San Francisco voters could adopt an initiative measure that reduces or repeals the SFPUC’s wastewater rates and charges, though it is not clear whether (and courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonded indebtedness. There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of the SFPUC to impose, levy, charge and collect increased fees and charges for the Wastewater Enterprise, or to call into question wastewater rate increases previously adopted by the SFPUC. No assurance may be given that Articles XIIIC and XIIID will not have a material adverse impact on Net Revenues.

On December 12, 2023, the City was served with a purported class action lawsuit challenging the compliance of the rates charged by the Wastewater Enterprise with the requirements of Proposition 218. See “ – Proposition 218 Litigation.”
Proposition 218 Litigation . The Wastewater Enterprise provides sewer system services for the collection, treatment and disposal of sanitary wastewater and stormwater. Unlike most California municipal systems, where sanitary wastewater and stormwater are collected separately and stormwater is not treated, the Wastewater Enterprise is a combined sewer system providing treatment for sewage, wastewater, and sanitary waste. See “THE WASTEWATER ENTERPRISE – Combined Sewage and Stormwater System.” To increase transparency about the elements of sewer service charges while simultaneously providing incentives for customers to manage stormwater on their properties and divert it from the collection system, the Wastewater Enterprise revised its sewer service charges, effective July 1, 2023, to include both a sanitary sewer component and a stormwater component. See “THE WASTEWATER ENTERPRISE – Wastewater Enterprise Rates and Charges.” On December 12, 2023, the City was served with a purported class action lawsuit filed in California Superior Court challenging the compliance of the rates charged by the Wastewater Enterprise with the requirements of Proposition 218. Gluck, et al. v. City and County of San Francisco, et al. , SF. Superior Court Case No. CGC -23- 609954. See also “– Proposition 218.” The complaint asserted that the Wastewater Enterprise sewer service charges exceed the cost of providing sewer service because a portion of the proceeds of such charges has been and will continue to be used to fund the cost of “stormwater management” and that the Wastewater Enterprise has imposed “stormwater charges” without required voter approval. The plaintiffs sought refunds of certain sewer service fees paid by customers, interest, attorneys’ fees and other costs, and injunctive relief.

On February 26, 2024, the Superior Court issued an order sustaining the City’s demurrer to the complaint without leave to amend as to all of the plaintiffs’ claims and dismissing the case in full. The plaintiffs filed a notice of appeal of this order to the California Court of Appeal on March 29, 2024. On May 30, 2025, the California Court of Appeal issued an opinion that affirmed the Superior Court’s order sustaining the City’s demurrer as to the plaintiffs’ claims that the Wastewater Enterprise improperly combined sewer service charges and stormwater charges without required voter approval. In its opinion, however, the California Court of Appeal reversed the Superior Court’s order sustaining the City’s demurrer as to the plaintiffs’ claim that the sewer service charges exceed Proposition 218’s proportionality requirement. Litigation regarding this surviving claim is pending before the Superior Court, and the City intends to continue vigorously defending the action.

Were the outcome of the lawsuit to be unfavorable to the City, there could be an adverse impact on the operations and/or financial condition of the Wastewater Enterprise. The SFPUC believes, though, that any settlement obligations or adjudicated liability could be lawfully funded through future sewer service charges.

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Proposition 26. Proposition 26, which amended Article XIIIA and XIIIC of the California Constitution, was approved by the electorate at the November 2, 2010 election. Proposition 26 imposes a two- thirds voter approval requirement for the imposition of fees and charges by the State. It also imposes a majority voter approval requirement on local governments with respect to fees and charges for general purposes, and a two- thirds voter approval requirement with respect to fees and charges for special purposes. According to its supporters, Proposition 26 was designed to prevent the circumvention of tax limitations imposed by the voters pursuant to Proposition 13, approved in 1978, Proposition 218, and other measures through the use of non -tax fees and charges.

Proposition 26 expressly excludes from its scope “a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable cost to the governmental entity of providing the service or product to the payor” and “a ssessments and property-related fees imposed in accordance with the provisions of Article XIIID.” The SFPUC believes that the initiative is not intended to, and would not, apply to fees for wastewater services charged by the SFPUC. The SFPUC, however, is unable to predict how Proposition 26 will be interpreted by the courts to apply to the provision of wastewater services by local governments such as the SFPUC.

Initiative and Referendum
Article XIIIA and Articles XIIIC and XIIID of the California Constitution were adopted pursuant to the State’s constitutional initiative process. From time to time other initiative measures could be adopted by California or San Francisco voters, placing additional limitations on the SFPUC’s revenues or ability to increase revenues.

Charter Limitations
The Charter requires that bonds (such as the Bonds) secured by revenues, other than refunding bonds, may be issued only with the assent of a majority of voters. However, under the Charter amendments enacted by the voters in November 2002 (Proposition E) and in June 2018 (Proposition A), the SFPUC may issue revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors, for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities, clean water facilities, power facilities, or combinations of water, clean water and power facilities under the jurisdiction of the SFPUC or for any other lawful purpose of the water, clean water or power utilities of the City in furtherance of the purposes provided in the Charter, including the refunding of existing obligations (and subject to the further conditions contained in Proposition E and Proposition A). See “OBLIGATIONS PAYABLE FROM NET REVENUES – Authority for Issuance of Revenue Bonds and Other Obligations Payable from Net Revenues” and “SECURITY FOR THE BONDS – Additional Series of Bonds,” “ – Additional Parity Loans” and “– Refunding Bonds” in the forepart of this Official Statement.

Future Charter Amendments
San Francisco voters could adopt additional Charter amendments in the future which would limit the ability of the SFPUC to issue debt or to enact rate increases, affect the financial condition or operation of the Wastewater Enterprise or implement other changes affecting the financial condition or operations of the SFPUC and the Wastewater Enterprise. See “RISK FACTORS – Other Risks – Initiative, Referendum and Charter Amendments and Future Legislation” in the forepart of this Official Statement.

THE CITY AND COUNTY OF SAN FRANCISCO
THE FOLLOWING INFORMATION IS PROVIDED FOR CONVENIENCE ONLY. THE GENERAL

FUND OF THE CITY IS NOT LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2026A BONDS, AND NEITHER THE CREDIT NOR THE TAXING POWER OF THE

CITY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2026A BONDS. THE 2026A BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE, LIEN, OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE CITY.

General. San Francisco is the economic and cultural center of the Bay Area and northern California. The limits of San Francisco encompass over 93 square miles, of which 49 square miles are land, with the balance

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consisting of tidelands and a portion of the San Francisco Bay. San Francisco is located at the northern tip of the San Francisco Peninsula, bounded by the Pacific Ocean to the west, the San Francisco Bay and the San Francisco- Oakland Bay Bridge to the east, the entrance to the San Francisco Bay and the Golden Gate Bridge to the north, and San Mateo County to the south. Silicon Valley is about an hour’s drive to the south, and the Napa -Sonoma wine country is about an hour’s drive to the north. The California Department of Finance estimates San Francisco’s population as of January 1, 2025 was 842,027 (a decrease of 3.7% from 873,965 as of April 1, 2020).

The economy of the Bay Area includes a wide range of industries, supplying local needs as well as the needs of national and international markets. Major business sectors in the Bay Area include technology, retail, entertainment and the arts, conventions and tourism, service businesses, banking, professional and financial services, international and wholesale trade, multimedia and advertising, healthcare, higher education and agriculture. The California State Supreme Court is also based in San Francisco.

San Francisco benefits from a highly skilled, educated and professional labor force. The City estimated the per-capita personal income of San Francisco for fiscal year 2023 -24 was $167,542. The San Francisco Unified School District (“SFUSD”), which is a separate legal entity from the City, operated 64 elementary schools, eight alternative learning schools serving grades transitional kindergarten through eight, 13 middle schools, 14 high schools, 11 early education schools, six County and Court schools, and three continuation schools as of the 2024- 25 academic year. For the 2024 -25 academic year, 11 fiscally independent charter schools operated within SFUSD’s boundaries for which SFUSD is the charter -approving agency. Higher education institutions located in San Francisco include the University of San Francisco, California State University – San Francisco, University of California – San Francisco (a medical school and health science campus), the UC College of the Law, San Francisco (formerly University of California Hastings College of the Law), the University of the Pacific’s School of Dentistry, Golden Gate University, City College of San Francisco (a public community college), the California College of the Arts (which is scheduled to permanently close at the end of the 2026– 27 academic year), the San Francisco Conservatory of Music, and the Academy of Art University.

CleanPowerSF Sfpuc CommissionJuly 28, 2026

CleanPowerSF Sfpuc Commission
July 28, 2026