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SFPUC reports FY2014–15 pre‑audit results: drought reduced revenues but reserves targets met
Summary
The SFPUC's pre‑audit FY2014–15 report showed revenue declines tied to drought: water sales fell by about $41 million and wastewater by about $16.6 million, but policy targets for debt service coverage and reserves were met; staff will present scenario planning for the 2017–18 biennial budget.
Eric Sandler, Assistant General Manager for Business Services and CFO, presented the SFPUC's quarterly budget status for fiscal year 2014–15 (pre‑audit) at the Aug. 11 meeting. Sandler said all three enterprises—water, wastewater and power—experienced reduced revenues attributable to drought and drought response, but the commission's reserve and debt service coverage policy targets were met.
Sandler reported the water enterprise experienced a decline of about $41 million (roughly 10% of water sales revenue); of that, approximately $13.4 million came from San Francisco customers and $27.7 million from wholesale customers. He said wholesale shortfalls can be addressed through a balancing account in the water supply agreement and are primarily a timing issue. The wastewater enterprise saw an estimated $16.6 million (6.3%) reduction in revenue, and Hetch Hetchy energy production and sales fell because reduced supplies diminished generation and wholesale electric sales.
One‑time positive items included an $11 million settlement with a contractor and an $8.1 million surplus property sale in Mountain View. Sandler said the utilities avoided using certain planned reserves, producing additional one‑time financial relief.
Sandler and commissioners discussed short‑, medium‑ and long‑term financial planning, and staff said they will return in September with scenario planning options for the 2017–18 biennial budget to consider continued drought, a return to normal precipitation, or a worsening situation.
