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SFPUC budget report flags lower retail volumes; commission approves $200M revolver for interim funding
Summary
SFPUC’s Q2 budget review showed lower retail sales across water, wastewater and power; staff noted overtime pressure tied to a Hetch Hetchy shutdown. Commissioners approved a $200 million revolving credit agreement (two $100M facilities) with Wells Fargo for interim funding.
The San Francisco Public Utilities Commission heard the agency’s second-quarter budget status report and voted to add a revolving credit agreement to its interim funding toolkit.
Anna Doening, presenting the FY2024–25 Q2 budget status (actuals through December), said retail volumes for water, wastewater and power are below budget and are the primary cause of revenue shortfalls. "We are on track" with financial policy targets overall, she said, but noted the water enterprise was over budget in the overtime line and that any overspending would require Board of Supervisors approval.
Commissioners asked how the Clean Power SF unspent reserve—budgeted at about $40.5 million—would be treated; Deputy CFO Laura Bush said the amount would carry to fund balance at year end. Assistant General Manager Steve Ritchie explained a roughly 100-day Hetch Hetchy shutdown that has increased operational overtime: "we're building up a lot of overtime as a result of that particular operational aspect."
On capital finance, Nikolai Sklaroff, capital finance director, reiterated that the SFPUC currently has about $11 billion in debt outstanding and previewed upcoming refinancing and new-money transactions in March and April. Sklaroff described borrowing tools (tax-exempt bonds, WIFIA and state revolving fund loans) and emphasized the commission’s role in reviewing official statements for accuracy.
On Item 8 the commission considered a $200 million revolving credit agreement with Wells Fargo Bank (two separate $100 million facilities for water and power enterprises). Staff said the facilities provide flexibility for interim funding, controller reserve releases and contingency access, and would only be drawn if needed; estimated rate if drawn on the day of staff’s estimate was 4.69 percent. Commissioners questioned intended use, repayment timing and whether commercial paper would remain preferred; staff said revolvers are a fallback and short-term borrowings are rolled into bond transactions when appropriate. The commission approved the agreement on a unanimous roll-call vote.
