S.F mayor seeks ways to cover $8 billion in repairs
Edward Epstein / SF Chronicle 15nov00
San Francisco -- San Francisco Mayor Willie Brown outlined options yesterday for paying for what he now says could be an $8 billion remodeling of the vast Hetch Hetchy system -- everything from increasing rents on city property to selling bottled water -- but said going to voters for a property tax hike was a last resort.
The nearly century-old system, which needs seismic upgrading and replacement because of its advanced age, stretches from the Hetch Hetchy Valley in Yosemite National Park down to the Bay Area. It is owned by San Francisco and serves 2.4 million people in the city and San Mateo, Santa Clara and Alameda counties.
Earlier estimates for the job were in the $3 billion to $4 billion range, but yesterday Brown went with a much higher figure that caught even officials with the city Public Utilities Commission by surprise.
"We've been using the $4 billion figure," said PUC Commission member Dennis Normandy. "But over the 10 to 15 years of the projects, $8 billion might not be unreasonable."
Brown said at a meeting of the Urban Water Institute at the Hilton Hotel that the PUC is already doing some things to raise money for the multiyear project.
These include selling off assets, such as the 500 acres in Pleasanton, which brought the PUC $126 million, and a plan still under consideration to allow quarry work on 242 acres in Sunol in Alameda County. That would bring the PUC as much as $62 million over 40 years, according to a new report from supervisors budget analyst Harvey Rose.
Residents of the little town of Sunol have battled the PUC over the plan for years. Today, the supervisors Finance and Labor Committee takes up the lease.
The PUC has also started sharply raising rents on tenants of its property, something that has brought protests in San Mateo County, where tenants including funeral homes, churches, synagogues and parking lots have suddenly been confronted with demands for more rent.
"The right-of-ways have been rented for minimal rents," Brown said. "You go to market rates to use your property to become more productive. If we were a private business, that's what we would have done all along."
Brown repeated another revenue-raising idea that he first broached in 1998 of bottling Hetch Hetchy water, which is so pure it doesn't have to be filtered,
and selling it in competition with other bottled waters.
He said he's serious about the idea, saying the water would be sold under the Hetch Hetchy label. But he admitted that the city still hasn't found anyone who would bottle or distribute it.
Another idea is to earn more revenue from electricity generated by PUC-owned dams.
The PUC has suffered recently because it generally sells power under long- term contracts, and hasn't benefited fully from the boost in electricity prices.
Brown also denied heatedly that he would ever try to privatize the Hetch Hetchy system. "My name is O'Shaughnessy," referring to Michael O'Shaughnessy, the chief engineer who built the vast public Hetch Hetchy system.
Brown said his financing options are limited. Getting a huge general obligation bond issue passed would be difficult, since it would entail higher property taxes.
"You cannot go to the voters and ask for $8 billion. That would be totally unacceptable," Brown said. "Recall would be the next challenge you'd face."
PUC officials have talked in general terms about a much smaller bond issue, one that might go before voters in November 2001. But Brown said nothing will be done until an overall plan is completed.
A water rate increase in the city is another possibility. In June 1998, San Francisco voters froze water and sewer rates in the city until July 2006. The measure provided, however, that the fees could rise if the money went to pay for voter-approved improvements.
Suburban rates have risen since the measure passed, raising some objections from customers there.
Planning for the Hetch Hetchy overhaul is taking several routes. Brown has appointed his own Task Force on Public Utilities Infrastructure to come up with financing recommendations. The PUC and the big suburban customers it supplies have developed a water supply master plan.
The PUC has also hired Bechtel Infrastructure to work with its own engineering staff on designing work that will begin in the next few years.
If you have come to this page from an outside location click here to get back to mindfully.org