September 15, 2002
By Johnny Miller, Researcher
YOSEMITE VALLEY -- Over
the past 20 years, San Francisco officials raided the city's vaunted
Hetch Hetchy Water and Power system of hundreds of millions of dollars,
leaving the Bay Area's largest water supply vulnerable to earthquake,
drought and decay.
Despite increasingly serious warnings about
the need for expansion and seismic upgrades, city officials postponed
the costly work and used profits from Hetch Hetchy's hydropower
electricity sales to bankroll city programs and salaries for everything
from the Municipal Railway to health care for the needy.
Today, engineers warn that a significant
earthquake could cause widespread damage to the system, ranging
from the collapse of Calaveras Dam in Alameda County to the destruction
of a key tunnel that delivers water through the foothills to 2.4
million Bay Area residents, potentially cutting off most of the
system's water supply for 60 days.
Now city officials want San Francisco and
its suburban water customers to borrow $3.6 billion to fix the problems
- and pay for it by more than doubling water bills.
"The politicians used the Hetchy system
as a money machine in the basement of City Hall," said Jim Chappell,
president of San Francisco Planning and Urban Research, a nonprofit
civic group. "For decades, there has been gross irresponsibility
in the siphoning of funds clearly needed for Hetchy maintenance."
Since 1979, San Francisco officials have
diverted $670 million from the Hetch Hetchy system into the city's
general fund, according to city records. As recently as fiscal year
2001, the city took nearly $30 million from the system.
Rudy Nothenberg, who ran the city's Public
Utilities Commission during Mayor Dianne Feinstein's administration,
defended the fund transfers, saying, "There is nothing wrong in
my view with using the Hetch Hetchy power resource to generate money
for the general fund, which pays for cops, parks and recreation
and everything that people hold dear."
The city's diversion of the funds, though
legal, exploited a loophole in the City Charter and shirked its
obligation to maintain the Hetch Hetchy aqueduct that the city constructed
from Yosemite National Park to the Bay Area during the early 1900s.
The deteriorating condition of the system
has prompted a rebellion by Hetch Hetchy's suburban water customers,
who have raised the threat of seeking state control over the repairs
if the city -doesn't move speedily on its own.
Fiercest of San Francisco's critics are
lawmakers representing those communities where residents and businesses
depend solely or in part on Hetch Hetchy water.
"If we have a major disaster, all the Bay
Area will suffer," said Assemblyman Lou Papan, a Millbrae Democrat
who represents more than 400,000 Hetch Hetchy customers. "We can
no longer afford to put up with the child's play going on in San
Francisco. The deterioration rests on their shoulders."
Today, San Francisco officials say they
need $3.6 billion to put the Hetch Hetchy aqueduct back on a sound
This fall San Francisco voters will be
asked to approve Proposition A, a $1. 6 billion bond measure, to
cover the city's share of rebuilding and expanding the water system
over the next 13 years.
To pay for it, San Franciscans' water bills
would nearly triple by 2015. Suburban users of the system would
raise another $2 billion toward the project, requiring a more than
doubling of their water bills over the same period.
California historian Kevin Starr calls
the failure to maintain Hetch Hetchy more than just a matter of
dollars and cents. Recalling the system's creation in the early
1900s - an engineering marvel requiring an act of Congress and the
sacrifice of majestic, 3-mile-long Hetch Hetchy Valley - Starr said
the system's decline amounts to an abandonment of the public trust.
"For San Francisco to neglect Hetch Hetchy
is to neglect the public works project it used to bring itself into
metropolitan status," said Starr, the state librarian.
Much of the 167-mile Hetch Hetchy aqueduct
is more than three-quarters of a century old and vital sections
are in dire need of repair.For years, water officials have been
concerned about the dam's stability - in part because it failed
in 1918 during construction and because the Calaveras Fault runs
within a quarter-mile of the dam. "After it failed, they continued
to build the dam on top of the material that had slid into the reservoir,"
said Ron Delparte of the state Division of Dam Safety. "We -don't
do that anymore."
More than four years ago, the state warned
that the dam was in "an extremely high seismic environment" and
"its height, reservoir storage capacity and location create a very
high damage potential to life and property. "
More than a year ago the state told the
city "the stability of the dam would be in question in a major quake,"
Delparte said. The city agreed to lower the reservoir to a level
considered safe for now.
State officials say that if the 200-foot-high
dam failed, its water would cascade along Alameda Creek's path through
Sunol, Fremont and Newark, threatening lives and property.
Tentative plans call for replacing the
dam and increasing more than six- fold the total capacity of the
31 billion-gallon reservoir, a 64-year-old reservoir on a hill in
the heart of the city's residential Sunset District known as Sunset
Reservoir North Basin, has a seismically deficient concrete roof.
In addition, the dam's northwest corner, at 28th Avenue and Ortega
Street, sits on sand that could liquefy in a major quake. State
officials say the reservoir's 89 million gallons could spill out
to the west, threatening lives and property.
Four years ago, state dam safety officials
told the city to look at the stability of the reservoir's foundation,
and now - in 2002 - the city is preparing to design the repair and
finish the work by 2005.
Some sections of 75-year-old pipelines
carrying Hetch Hetchy water across San Francisco Bay sit on wooden
trestles that were constructed long before modern seismic-strengthening
techniques were developed. These pipelines are decaying and are
considered very vulnerable to failure, particularly because they
cross the Hayward Fault. The city says a fix -won't be finished
Meanwhile, the entire waterworks - 21 reservoirs,
25 tanks, two water treatment plants, 23 pump stations, 40 miles
of tunnels and 1,470 miles of water mains stretching from Yosemite
National Park to North Beach - is so overextended that one vital
tunnel bringing water to the Bay Area has not been shut down for
maintenance in decades, city utility officials say.
This tunnel lies between the Hayward and
Calaveras faults, and if it were to break in a quake or other catastrophe,
that could halt the flow of more than 85 percent of the system's
water to Bay Area customers for 30 to 60 days, city-hired experts
While deferring system maintenance, city
officials have moved slowly to meet water demands created by growth
in Hetch Hetchy's service area.
When Hetch Hetchy was built, San Francisco
had about 417,000 residents while Alameda County had 246,000 and
San Mateo County 27,000. Today San Francisco has about 770,000 residents,
Alameda County 1.4 million and San Mateo County 707,000.
On Hetch Hetchy's list of customers are
thousands of businesses crucial to the economy of the Bay Area and
the nation - in particular Silicon Valley's high-tech industry.
With such growth occurring and more to
come, critics say San Francisco failed to plan adequately where
to get more water. Even with the revamp, city officials say, the
Hetch Hetchy system still would be 10-20 percent short of projected
need in a long drought and, without Proposition A, shortages could
be in the 45 percent range.
This state of affairs exists despite the
fact that San Francisco has known since 1994 that the Hetch Hetchy
system was going to fall short of customers' demands, according
to a state audit.
"The San Francisco Public Utilities Commission
has been slow to assess and upgrade its water delivery system so
it can survive catastrophes such as earthquakes, floods and fires"
and meet future supply demands, auditors said in a 2000 report.
"San Francisco has not been aggressively
looking at increasing the system's reliable water supplies to tide
its customers through dry years," said Nicole Sandkulla of the Bay
Area Water Users Association, representing Hetch Hetchy's 29 wholesale
customers. "If there is a drought, we'd all suffer - there's not
Within the Hetch Hetchy system, there are
two branches - one providing water and another generating hydroelectric
power. The City Charter called for the water and power systems to
be merged when completed. When merged, hydroelectric revenues could
be declared surplus if they were not needed to maintain the water
and power system. Only then could those revenues be used for other
But city officials have never declared
the systems complete and merged. Thus city officials can declare
the hydroelectric profits as surplus to that branch of the Hetch
Hetchy system and then use the revenues for general city needs -
even though the system's waterworks are in desperate need of repairs
The city began diverting the hydropower
revenues at least as early as the late 1960s. About $25 million
in Hetch Hetchy funds went to fund Muni electrical maintenance work
in the following decade, which spanned the mayoral administrations
of Joseph Alioto, George Moscone and Dianne Feinstein.
Since 1979, the earliest year for which
the San Francisco Public Utility Commission (SFPUC) officials say
they have records, more than $236 million in Hetch Hetchy power
revenues were transferred during Feinstein's administration ending
in 1987; $95 million during Art Agnos' four-year administration
ending in 1991; more than $104 million during Frank Jordan's administration
ending in 1995; and more than $233 million through Willie Brown's
In 1999, Brown began reducing the amount
of money the city took in Hetch Hetchy power revenues, believing
the city should be weaned from using those funds, Brown aides said.
In the 2002 budget year, there was no transfer.
City Hall politicians who took the Hetch
Hetchy money say it went to pay for police, public health and other
important services and that it helped San Francisco stave off municipal
budget cuts during lean economic times.
Former Mayors Agnos and Jordan said they
approved the transfers only after being assured by their staffs
that the moves would not have a negative effect on the Hetch Hetchy
Agnos said the transfers in his administration
declined over time because of his concern about the need to protect
the system, and Jordan said the city's budget problems forced him
to continue transfers. "I walked into office with a $300 million
deficit and was having to consolidate services," Jordan said. "The
public was clamoring for health care for AIDS, social services for
the homeless, Muni, affordable housing, the libraries."
Jordan said he toured the Hetch Hetchy
system and knew it had long-term infrastructure needs, "but it -wasn't
something I could take on as an immediate priority given what I
was dealing with."
Critics say the transfers were done out
of expedience by elected officials. "They milked the cow and chose
to ignore an asset when they should have been putting its revenues
back in the system to protect all who depend on it," said Assemblyman
Papan, who sponsored legislation this year that sets specific deadlines
for the repair of Hetch Hetchy.
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