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SFPUC lays out multi‑year budget and capital plan, flags project trade‑offs and modest staffing changes
Summary
The San Francisco Public Utilities Commission presented a multi‑year operating and capital plan that preserves major water and sewer capital programs while shifting some projects to balance cash flow. Staff proposed modest net position changes and emphasized that rising debt service from prior bonds will drive most rate impacts.
San Francisco — At a Jan. 28 Public Utilities Commission budget hearing, agency staff presented a multi‑year operating and capital plan that keeps major rebuilding programs intact while deferring select projects to manage near‑term cash flow.
Todd Reedstrom, the PUC chief financial officer, told commissioners the combined budget over the coming three years centers on capital investment: seismic upgrades, transmission work and the long‑running Water System Improvement Program. "That billion‑dollar budget over the next 3 years reflects growth primarily related to capital investment," Reedstrom said, noting most non‑capital spending would be essentially flat.
Why it matters: the PUC has moved from planning to paying the mortgage on prior bond financings. Staff told commissioners that roughly three‑quarters of projected bill growth in the next decade will be debt service tied to capital investments, not annual operations.
What staff proposed: the water enterprise plan factors $125 million to complete five major WSIP‑related projects and $36 million for two local supply projects (San Francisco Groundwater Project and Westside Recycled Water Project). The broader 10‑year capital portfolio includes earlier WSIP/ WESIP spending that has already exceeded the original WSIP budget of $4.6 billion; the agency’s total 10‑year program was described at about $9.8 billion during the hearing. To balance that plan staff proposed deferring construction dollars for some regional projects — notably portions of a regional desalination placeholder and certain Millbrae yard improvements — while keeping planning and environmental work funded so those projects can be re‑entered into the 10‑year plan later if conditions change.
On staffing and delivery: Reedstrom and AGM Emilio Cruz (infrastructure) said most of the new work will be funded with project‑funded (off‑budget) positions. Cruz proposed 21 additional infrastructure positions — the large majority billable to specific projects — and emphasized continued consultant use and work orders to other city departments to meet peak demands as the Water System Improvement Program winds down and the Sewer System Improvement Program ramps up.
Debt and reserves: staff explained timing nuances that temporarily reduce some debt service in a single enterprise yet increase the PUC’s overall mortgage payments as WSIP/WESIP borrowing comes due. Reedstrom described steps taken to limit new operating headcount (general manager turned down many requests) and to rebalance staff through substitutions and transfers when possible.
Commissioner concerns and follow‑up: commissioners pressed staff on the desalination deferral, the sequencing of regional versus in‑city projects, and the timing of expected workloads as the PUC shifts from water to sewer capital work. Staff agreed to revisit the 10‑year plan and provide additional detail on project phasing, the mix of consultants versus city staff and the line‑item rollups requested by commissioners.
What happens next: the hearings continue as staff incorporates commissioner direction — the PUC will report back on requested line‑item detail, results of planned reviews of project schedules and any adjustments for drought or other contingencies. Formal adoption of budgets and rates will follow the hearing record and subsequent deliberations.
