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Supervisors Question SFPUC Hiring and Consultant Use on $4.3B Water Program
Summary
At a Government Audit and Oversight Committee hearing, SF PUC infrastructure officials defended hiring and contracting practices for the $4.3 billion Water System Improvement Program, saying consultants fill specialized or peak workloads while reporting steps to tighten contracting and oversight after prior audits.
Harlan Kelly, assistant general manager for infrastructure at the San Francisco Public Utilities Commission, told a Board of Supervisors committee that the agency balances in-house staff and outside consultants to deliver the voter-approved Water System Improvement Program (WSIP).
Kelly said the WSIP totals $4.3 billion, comprises 73 projects and serves about 2.4 million customers. He described two constraints that shape resourcing: a mayoral addendum and labor agreement language that prioritize city employees for capital programs when practical, and civil service review of scopes to determine whether city staff can perform specific professional services.
"Construction will kill you," Kelly said when supervisors pressed him to explain where program dollars go, stressing that roughly two-thirds of program costs are construction and that design, environmental and project management together account for about 20 percent of the total. He said the PUC uses consultants where the city lacks specialized expertise (dams, tunnels, right-of-way negotiation) or to meet short-term peak workloads rather than hiring and later laying off staff.
Supervisors pressed for concrete numbers. Kelly estimated consultants and city staff account for roughly 20 percent of WSIP costs (about $880 million of $4.3 billion) but said he would supply a detailed vendor and staffing list. He acknowledged prior audits by state and city offices that criticized contracting practices and said the PUC has taken specific steps, including hiring a contract manager (Ivy Fine), instituting online invoicing to speed payments and standardizing contract templates to improve oversight and control change orders.
On vendor selection, Kelly said major contracts such as Parsons and Mitchell Engineering were awarded through competitive processes: "whoever has the low responsive responsible bid gets the project," he said of construction procurement, and he described independent evaluation panels for consultant selections.
Committee members and public commenters asked about schedule risk and environmental clearances. Kelly said WSIP aims to complete by 2015 and that the PUC has an accepted milestone plan with the state, but he warned environmental litigation, right-of-way acquisition and the need for many more shutdowns than in earlier plans could jeopardize the timeline.
Multiple neighborhood and business speakers at the hearing urged continued oversight. The Chamber of Commerce and residents warned delays increase costs and leave much work still to be done on the ground; others expressed concerns about odor and localized impacts related to wastewater facilities.
The committee closed the hearing with requests for follow-up: supervisors asked the PUC to provide a detailed list of consultants, the count and roles of city staff hired since the bond, consultant contract projections, and line-item breakdowns of consultant vs. employee hours and costs. The committee continued the item to the call of the chair for return of that information.
