State Audit Blasts San Francisco Hetch Hetchy Report says aged system puts Bay Area water supply at risk by Kenneth Howe San Francisco Chronicle - February 18, 2000 State auditors ripped the San Francisco Public Utilities Commission yesterday, saying that the Hetch Hetchy water system it runs for 2.4 million Bay Area residents could not survive a major catastrophe and that the agency has dragged its heels in fixing it. Some of Hetch Hetchy's critical pipelines are nearly 75 years old "and are in dire need of repair or replacement," acting state Auditor Mary Noble said in a 45-page report to the governor and legislative leaders. A major earthquake, fire or flood could cut off water to much of the region, the audit said. The PUC did not start studying how to fix up the aged system until 1994 and still has not finished planning for repairs, the audit said. The report quickly brought calls from PUC critics in San Mateo County, which depends on Hetch Hetchy water, for San Francisco to cede control of the water system it has run for more than 75 years. About 1.6 million Hetch Hetchy customers live in San Mateo, Santa Clara and Alameda counties. Through a complex system of dams, reservoirs, tunnels, pumps, pipelines and treatment plants that stretch from Yosemite National Park to San Francisco, Hetch Hetchy supplies drinking water to residents in San Francisco and to 28 wholesale suppliers in the other three counties. The state audit criticized the PUC, which oversees Hetch Hetchy, for being slow to improve that delivery system. It also knocked the PUC for being lax in estimating future water demand and for not seeking additional sources of water should shortages occur because of a drought or disaster. The result, said the auditors, is that Bay Area residents "are at greater risk of disruptions and water shortages if an emergency or a drought occurs." SNAIL'S PACE FOR REPAIRS The audit was particularly critical of the PUC for a snail's-pace approach to solving its problems. It noted that the PUC's plan for bringing the system up to date and making it earthquake-safe lists about 200 projects totaling $3 billion to be completed in 15 years. However, in the past decade, the PUC has managed to finish on average only about five projects a year. The report pointed out that the PUC had no alternative funding plans should voters reject the bond measures needed to pay for the repairs. It is estimated that water rates would have to double to pay for all of the improvements. San Francisco voters froze their water rates until 2006 via a proposition passed in 1998, though the rates can be increased if bond measures are approved. The auditors blamed the PUC's slow response on executive turnover, the lack of strong leadership and the absence of proper procedures to award contracts to complete large-scale projects. The PUC is run by a five-member board, all appointed by San Francisco's mayor. "It's hard to disagree with these findings, but much of it is really old news," said PUC General Manager John Mullane, who recently replaced retired PUC boss Anson Moran. "We've identified these same problems and we've been working on them."  MANY STEPS UNDER WAY Mullane noted that much of the report recommended that the PUC continue or complete steps it had already undertaken. These include finishing its master plan, finding ways to attract qualified engineers, training its staff and improving contract procedures. "They pointed out a lot of areas where we are within a gnat's eyelash of being there anyway," he said. He noted that the PUC's planning on its long-range capital project was "near completion." But PUC critics took a different view of the audit. "The report confirms many of our concerns about the SFPUC," Assemblyman Lou Papan, D-Millbrae, said in a statement. Papan requested the audit last year out of concern that the commission was not acting quickly enough to fix the Hetch Hetchy system. PUT SYSTEM IN NEW HANDS Papan also suggested that it was ``time to examine the possibility of taking control of this system away from the City and County of San Francisco so that all the users of the system are represented in the future.'' "Damn right it's a crisis," added San Mateo County Supervisor Mike Nevin. "We live in earthquake country. We're concerned about infrastructure." Nevin suggested that rather than taking the water district authority away from San Francisco, he would support a joint powers board. The power to operate the water department would be shared by San Francisco, San Mateo and Alameda counties. "If they want us to share in the cost of the infrastructure problem, then we have to share in the operations of their system,'' Nevin said. Chronicle staff writer Mark Simon contributed to this report.