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SFPUC reviews 10‑year financial plan and adopts 10‑year capital plan; higher outer‑year rate projections flagged
Summary
Commissioners held a public hearing on the SFPUC's 10‑year financial plan (FY2016–2025) and adopted the 10‑year capital plan. Staff said reduced water sales create about $150 million of pressure over 10 years and that wholesale rates for next year could rise about 31% to make up a roughly $25 million shortfall from the current year.
Deputy CFO Charles Pearl presented the SFPUC's 10‑year financial plan for fiscal 2016–2025 and explained changes since last year, emphasizing the revenue impact of reduced retail and wholesale water sales. "That has impacted the 10‑year plan by about $150,000,000 over 10 years," he said, and noted that the refunding action just approved will offset roughly one‑third of those lower sales in the near term.
Pearl told the commission that wholesale rate projections for the coming year increased from an earlier projection of about 12% to roughly 31% because the utility is projected to under‑collect about $25 million in the current year and would spread that shortfall into next year's wholesale rates. He said retail rate changes are projected to be higher in outer years (2019–2021) to balance declines in water sales unless offset by cost reductions or rate design changes. "We have about a 6% drop in consumption for retail customers," Pearl said, and staff assume some rebound for planning purposes.
The commission held the public hearing on the financial plan and then proceeded to the required public hearing on the 10‑year capital plan. Frances Lee presented the capital plan, explaining rolling changes between successive 10‑year windows (2015–2024 vs. 2016–2025) and program additions and rolloffs, including the Auxiliary Water Supply System (AWSS) changes and planned rollout of the Sewer System Improvement Program (SSIP). The commission adopted the charter‑mandated capital plan for submission to the city's capital planning committee, the Mayor's Office and the Board of Supervisors.
Commissioners asked about stormwater fee considerations, fixed vs. volumetric rate structure, CleanPowerSF/CCA implications for power enterprise planning, and the timing of cost‑of‑service studies. Staff said no rate actions were proposed for immediate adoption and that a cost‑of‑service study and further rate fairness work would be done in the coming year to inform future changes. The commission closed the public hearing on the financial plan and adopted the capital plan; staff will return with additional rate‑setting analysis.
