SFPUC approves $35 million memorandum of agreement with Daly City for Lake Merced water‑level project

The San Francisco Public Utilities Commission voted unanimously to authorize the general manager to execute a memorandum of agreement with the City of Daly City for $35,000,000 to reimburse a portion of construction costs for the Lake Merced Water Level Restoration Project.

Commissioners approved the funding after a presentation by Obi Nzewi, groundwater program manager at the SFPUC, who described the scope and goals of the multi‑jurisdictional effort. The project would divert additional stormwater from the Vista Grande Drainage Basin into Lake Merced rather than sending it directly to the Pacific Ocean, increase groundwater recharge, raise lake levels for emergency and firefighting nonpotable supply, and reduce flooding in parts of Daly City and along John Muir Drive in San Francisco.

Nzewi said the work includes a collection box and debris screen at the canal inlet, a box culvert under John Muir Drive to divert water to the lake, two treatment wetlands to improve stormwater quality, and an overflow inlet to return excess water to the Vista Grande Canal and tunnel system. Daly City will replace the existing tunnel and the outward face at Fort Funston along the current alignment; Daly City will lead construction while the SFPUC will reimburse part of costs.

"If we can get stormwater that used to prehistorically flow to the lake to go back to the lake, as opposed to just sending it to the ocean, that's a win win for both the PUC and for Daly City," Nzewi said.

Nzewi said the SFPUC's estimated total project cost is about $128,000,000 and that the commission was being asked to reimburse $35,000,000 of construction costs. He outlined a schedule in which required advanced mitigation before the Coastal Commission would begin in August, Daly City would bid and award the main construction in the fall, notice to proceed for main construction could be spring 2026, and major construction could complete by August 2030. Nzewi said additional real estate agreements would be returned to the commission when negotiated with Daly City and that the project would operate under the Lake Management Plan.

Commissioner Leverone asked whether stormwater diverted to the lake would enter SFPUC treatment plants. Nzewi replied, "No, it doesn't. It doesn't go to any of the PUC's treatment plants. This is stormwater that originated in Daly City and typically was just diverted straight to the ocean." Commissioners did not receive public comment on the item.

The motion to authorize the general manager to execute the memorandum of agreement passed by recorded vote: President Stacy, Vice President Arce, Commissioner Jamdar and Commissioner Leverone all voted aye. The item passed with the SFPUC directing staff to return with any necessary real estate agreements and to proceed with the reimbursement memorandum of agreement.