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SFPUC Q2 budget update: retail sales below budget, water overtime rising during Hetch Hetchy outage
Summary
New SFPUC finance staff told commissioners second-quarter actuals (through December 2024) show retail sales below budget across enterprises, offset by non-personnel and wholesale revenues; the water enterprise is over budget on overtime related to an Hetch Hetchy shutdown.
SFPUC finance staff reported the agency remains within policy targets despite a mix of revenue shortfalls and expense offsets in the second-quarter budget status report, but commissioners were warned that retail sales are lower than budget and water overtime spending is a near-term pressure.
Anna Dooney, who said she had recently taken responsibility for the quarterly budget reports, presented Q2 actuals through December 2024 and told commissioners, "The main takeaway here is that, despite these ups and downs, they largely balance out, we are on track, and importantly, we're continuing to meet our financial targets." She said retail volumes were down across water, wastewater and power enterprises, driving revenue slippage; that shortfall is being offset in part by lower non-personnel and debt service costs and by higher wholesale power sales in the power enterprise.
Dooney flagged an overtime overrun in the water enterprise and said the agency may need Board of Supervisors approval to overspend an overtime line if it continues. Assistant General Manager for Water Steve Ritchie explained a near-term operational cause: a roughly 100-day scheduled shutdown of the Hetch Hetchy system required Bay Area filtration plants to run 24/7, producing a one-time overtime increase. "So it's kind of a one-time event because of that particular operational aspect," Ritchie said.
Commissioners asked about trends for retail sales and about whether the overtime pressure reflected long-term understaffing. Dooney said budget assumptions include sales-volume estimates tied to population and usage and that weather and other factors can cause variance from budget. She said water hiring has improved but several factors contribute to overtime, including work needed during wet and dry weather conditions.
Commissioner Arce asked about CleanPowerSF reserves and a $40,500,000 planned deposit; Deputy CFO Laura Bush said the budgeted deposit would remain in fund balance at year end and is part of the long-term reserve plan.
The report was informational; no vote was required. Commissioners were invited to submit follow-up questions; staff said numbers would continue to shift as the fiscal year progresses and that the agency remains within its financial-policy targets.
Ending: Staff said they will monitor overtime usage and retail sales trends and return with updates as projections change; commissioners asked for additional explanation if staff needs to request overtime budget adjustments from the Board of Supervisors.
