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SFPUC approves voluntary sewer/water lateral insurance marketing contract; commissioners seek clear exclusions and consumer disclosures
Summary
The commission authorized a contract allowing American Water Resources to market voluntary residential water service and sewer lateral insurance; staff said about 111,000 accounts are eligible and the program will pay SFPUC $3.61 per enrolled customer per month. Commissioners requested clear marketing disclosures of exclusions (e.g., non‑code laterals) and emphasized the program is voluntary.
The commission approved a professional services contract to allow American Water Resources (AWR) to market a voluntary residential water service and sewer lateral insurance product to eligible customers in San Francisco.
Greg Norby, assistant general manager for the wastewater enterprise, said the action supports the PUC’s lateral program by offering a low‑cost voluntary option for homeowners to help offset upper lateral replacement costs. Michael Tran (collection systems engineer) said approximately 111,000 residential accounts with a 2‑inch water service or smaller are eligible for the marketing program. AWR will be permitted to use SFPUC branding for outreach materials subject to city review and must vet and use contractors that meet SFPUC standards; CCTV inspection results performed under the program would be transferred to the PUC.
Key commercial terms discussed include a $3.61 monthly payment to SFPUC per enrolled customer (the contract term is four years) and estimated 4‑year gross revenue to SFPUC of roughly $1.9 million from the program’s administrative fee arrangement. Michael Tran described typical residential subscription pricing cited in the RFP: about $4.49/month for water lateral coverage, $8.99/month for sewer upper lateral coverage and a combined package of about $12.99/month.
Commissioners and members of the public asked detailed consumer‑protection questions: whether pre‑enrollment inspections would be required (staff said no), what exclusions exist (staff said standard insurer exclusions apply and the city will require a clear list of exclusions in marketing materials), how the program handles complex or "chasing grade" lateral configurations, whether multi‑unit and HOA situations are eligible (staff said eligibility is based on service lateral size and ownership structure), and what the cost exposure would be for typical upper lateral replacement (staff estimated full replacement can run roughly $5,000–$10,000).
Commissioners emphasized that the program is voluntary, that the PUC’s responsibilities for lower laterals do not change, and that staff must preapprove marketing materials and ensure exclusions are clearly disclosed to customers. With those assurances, the commission moved and approved the contract award to American Water Resources.
What happens next: staff will work with the vendor on marketing materials and will present required documents to the Board of Supervisors for final approvals and notice to proceed timing.
