San Francisco Public Utilities Commission
Rate Fairness Board

MINUTES

Wednesday, January 10, 2007
4:00 pm – 6:00 pm
City Hall, Room 421

1. Call to Order and Roll Call

Chair Bobbrie Brown called the Rate Fairness Board meeting to order at 4:04 pm and roll call was taken. Present: Bobbrie Brown, Howard Ash, Ed Harrington, and Nadia Sesay; there was a quorum.

2. Public comment on items within the Board's jurisdiction but not on the agenda

There was no public comment at this time.

3. Discussion and possible action to approve the minutes of the November 28, 2006 meeting

Mr. Ash moved that the minutes from the November 28, 2006 meeting be approved and Ms. Sesay seconded the motion; approval was unanimous.  

4. Discussion of ongoing Board business

Tyrone Jue from SFPUC communications reviewed public outreach plans with the Board. Mr. Jue stated that community groups and organizations throughout San Francisco were recently sent letters explaining the planned rate increases and that Staff would like to come to their next regularly scheduled meeting and review the rate package. Two meetings had been scheduled to date and Mr. Jue anticipates having approximately 40 meetings if the response is similar to what it was two years ago. The schedule of community meetings will be posted on SFWater.org. Mr. Jue also reviewed with the Board a draft of the slide presentation that will be used at the meetings.

Mr. Ash suggested edits to the slides. These edits included: mention that Prop A enabled the PUC to raise rates in connection with the issuance of bonds and that, in addition to capital projects, the rate increases also went to pay for increases in operations and maintenance, chemicals, fuel, labor, etc. Staff agreed to make these edits to the presentation.

Mr. Ash requested that an analysis be done showing the impact of financing 80% (as an example) of the capital program with debt and 20% with cash raised from rates over 40 years.  Mr. Ash indicated that this analysis was not a high priority. Mr. Harrington stated that for generational equity reasons, it might be wisest to debt finance since there is a better matching between those paying for and receiving the benefit.

5. Discussion regarding Wastewater 5-Year Capital Improvement Program

Manfred Wong, a Project Manger with the SFPUC, spoke in detail about the Wastewater Enterprise’s 5-year Capital Improvement Program. Mr Wong explained that projects are focused on flooding and sewer improvements and that out of 36 planned projects, 28 have been started.

Ms. Brown asked several questions related to the progress of odor control for the Southeast wastewater treatment facility. Ms. Brown also asked whether the Northpoint wetweather treatment facility could be used throughout the year to relieve pressure on the Southeast neighborhood; Mr. Wong explained this is one of many ideas under consideration for the Wastewater Masterplan.

Member of the public Joan Giradot asked Mr. Wong questions related to a study of the hydraulic capacity of the system, the Sunnydale sewer project, and whether the sewer system is on GIS.

6. Discussion and possible action to establish criteria to evaluate rates

Due to the absence of Messrs. Rydstrom and Rosenfield, Mr. Ash moved to continue this item until the next meeting and Mr Harrington seconded; the decision was unanimous.

7. Discussion regarding Draft Rate Report

Bill Laws, SFPUC Rates Administrator, gave an overview of the rate package to the Board. Some highlights include the new block water rates for single family residential; this is in addition to the existing tiered rate for wastewater single family and multifamily residential. CAP (Community Assistance Program) customers will receive a discount on water in addition to the existing discount on wastewater, however the overall discount will remain the same. The LINPH (Low Income Non Profit Housing) program is being critically looked at for areas of improvement. CHP (Community House Program) will also be examined.

In response Mr. Harrington’s question, Mr. Laws explained the tiered rates are not feasible for commercial customers at this time since the blocks would have to be customized for each customer.

Todd Rydstrom arrived at 5:15 pm.

Mr. Ash provided detailed feedback on the draft Rate Report. He requested more detail on the following:

• The costs included in the water service charges
  
• Why the proposed tiered rates for Water includes single family residential but not multi-family residential
  
• The rationale for why Water and Wastewater have different 2nd tiers.  
  
• Number of non-paying water accounts and their volume and forgone revenue.  What would the effect be on rates if city non-payers began to pay?
  
• How fire protection rates are derived
  
• How we plan to collect capacity charges from entities that don’t need building permit, such as the federal government and certain universities?
  
• Plans for a capacity charge for the Water Enterprise

Mr. Ash also requested that low-income discounts, such as CAP, be built into the revenue requirements so they are not considered forgone revenue; that R&R each year for water and sewer be indexed; that a chart be added to the report that showed SFPUC average bills compared to other jurisdiction’s average bills, not just rates,

Mr. Rydstrom suggested that a discussion of the rate freeze as well as the source of funding for low-income programs be added to the report.

Member of the public Mr. David Pilpel also suggested the report include a discussion of Plumbers to People; his other comments echoed those already covered by Mr. Ash.

Member of the public Ms. Girardot stated that she felt the inclining block rate structure unfairly penalizes large families.  She also asked about the status of changing the building code to require sub-metering, especially for new condominiums.   

Member of the public Mr. Emeric Kalman presented a survey to the Board and Staff that shows the PUC’s rates are high relative to other large systems around the country. 

Ed Harrington left the meeting at 5:45 pm.

8. Discussion regarding new Board business

Next meeting February 14 at 4pm room 421. Comments on the draft report from the Board need to be given to Karol Ostberg by 1/19/07. Staff will try to deliver the next draft of the report to the Board 1/31/07.

9. Adjournment
Chair Brown adjourned the meeting at 5:52 pm.