Fail: 74885 / 23.1% Yes votes ...... 249304 / 76.9% No votes

See Also: Index of all Propositions

Summary Prepared by The Ballot Simplification Committee:

The Way It Is Now: San Francisco owns the Hetch Hetchy Regional Water System (Water System), which provides water to about 2.5 million people in San Francisco and neighboring areas. Water System reservoirs collect water from the Tuolumne River and Bay Area watersheds.

The Water System's largest reservoir is in Yosemite National Park's Hetch Hetchy Valley. The reservoir was created in 1923 by damming the Tuolumne River. The Hetch Hetchy Reservoir delivers 85% of the System's water. The water that flows from the reservoir also generates hydroelectric power for City services.

In 2002, the voters of San Francisco authorized the San Francisco Public Utilities Commission to implement a $4.6 billion project to improve the Water System, including $334 million to develop additional groundwater, conservation, and recycled water supplies. The project is nearing completion.

The Proposal: Proposition F would require the City to prepare a two-phase plan to evaluate how to drain the Hetch Hetchy Reservoir and identify replacement water and power sources. The implementation of this plan would require voter approval.

The first phase would identify:

• new water supply and storage options;
• additional water conservation opportunities;
• expanded water filtration facilities; and
• additional renewable energy sources to replace the reductions in hydroelectric power resulting from draining the Hetch Hetchy Reservoir.

• drain the Hetch Hetchy Valley and stop using it as a reservoir so that it can be restored by the National Park Service;
• increase flows on the lower Tuolumne River; and
• decrease storm water discharge into the bay and the ocean.

Fiscal Impact from The City Controller:

City Controller Ben Rosenfield has issued the following statement on the fiscal impact of Proposition F:

Should the proposed ordinance be adopted, in my opinion, there would be costs and benefits to the City and County. The costs would vary widely depending on how the City implements the ordinance, and on whether or not voters approve a Charter amendment that is specified in the ordinance. Planning costs over the next several years would be no more than $8 million. Future infrastructure costs could range from $3 billion to $10 billion if the voters approve a future Charter amendment specified in the ordinance.

Benefits cannot be accurately determined at this time for the large-scale resource and environmental objectives in the ordinance.

The ordinance specifies a planning process that would require the City to study and create; 1) an implementation plan for new water storage and treatment facilities and energy generation facilities sufficient to replace the capacity currently in the Hetch Hetchy reservoir and; 2) an implementation plan for removal of the Hetch Hetchy dam and environmental restoration of the affected areas and resources. The ordinance requires that the City draft a Charter amendment to allow a public vote in 2016 on these implementation plans. The ordinance specifies a wide variety of water, energy, and environmental goals that must be detailed in the plans, and requires studies of costs and financing methods for each. The water and energy plan would require implementation by 2025 and the plan for removal of the dam and related environmental restoration would require implementation by 2035.

There would be near-term costs under the ordinance of a maximum of $8 million under a provision requiring that the City appropriate funds for the planning effort. This amount is likely to be insufficient to complete the required work--in 2005, the State of California Resources Agency estimated the cost for a comparable planning and study process at $65 million.

The ordinance specifies that funds for the planning process and studies be appropriated from any legally available source and that other governmental or private sources could supplement City funding.

Significant long-term costs could occur as a result of the ordinance if a Charter amendment is eventually approved by the voters requiring development of new water and energy storage, transmission, and treatment facilities, removal of the Hetch Hetchy dam and reservoir, and implementation of environmental goals.

There are multiple possible methods for approximating these costs and estimates range widely. Under any method, the amounts are certainly substantial--in the billions of dollars. The State's compilation of estimates shows a range, in 2005 dollars, of not less than $3 billion, and up to $10 billion for these facilities and programs, depending on which elements of the water, energy and environmental resource issues are included. This estimate does not include increased operations and maintenance costs associated with the new infrastructure. In addition, the Public Utilities Commission estimates that the loss of hydroelectric energy and lost revenue from energy sales would cost the City an additional $41 million annually.

The ordinance states that funding sources for the water and energy facilities and the environmental programs that are called for could include federal, state and private sources. However, it should be noted that typically, water and energy facilities are funded by issuing 20 to 30 year bonds and the cost of this debt is recovered through charges to ratepayers. If ratepayer bonds were issued to replace Hetch Hetchy and build new water and energy facilities, customers of San Francisco's water and power utilities would experience rate increases. The Public Utilities Commission estimates that for every $1 billion in project costs, residential water users in San Francisco would pay between $60 and $170 more annually depending on how costs were distributed among local and regional users of the Hetch Hetchy system. As noted above, these large-scale costs would result not directly from the ordinance, but from voter approval of a future Charter amendment that is specified in the ordinance.

League of Women Voters

• Watch Video of Pros & Cons Presentation of this Measure