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<br /> 53 <br />2025 Amended and Restated WSA 21945395.2 <br />administration by other San Francisco departments for services ordered by the Water <br />Enterprise, such as legal services, risk management, telecommunications, employee relations, <br />purchasing, mail services, and workers compensation claims paid. <br />c. Litigation and Claims Paid: This includes charges incurred for <br />attorney services and claims and judgments paid in litigation arising from the operation of the <br />Water Enterprise. <br />2. Allocation: In each of these three subcategories, expenses that benefit <br />only Retail Customers will be excluded. For example, the cost of claims and judgments <br />resulting from a break in or leak from pipelines or reservoirs in the Retail Service Area (with the <br />exception of the three terminal reservoirs and pipelines delivering water to them) will be <br />assigned to the Retail Customers. Remaining Water Enterprise Administrative and General <br />expenses will be allocated between Retail Customers and Wholesale Customers on the basis of <br />the composite percentage of allocated operation and maintenance expense categories <br />described in Section 5.05. <br />D. Compliance Audit. The cost of the Compliance Audit described in Section 7.04 <br />will be assigned 50 percent to the Retail Customers and 50 percent to the Wholesale <br />Customers. <br />5.07. Water Enterprise Property Taxes <br />A. Description: This category consists of property taxes levied against property <br />owned by San Francisco located in Alameda, San Mateo and Santa Clara counties and used <br />and managed by the SFPUC. <br />B. Allocation: All property taxes paid, net of (1) reimbursements received from <br />lessees and permit holders, and (2) refunds from the taxing authority, are Regional expenses. <br />Net property taxes will be allocated between Retail Customers and Wholesale Customers on <br />the basis of Proportional Annual Use. <br />5.08. Hetch Hetchy Enterprise Expenses <br />A. Introduction. There are two steps involved in determining the amount of the <br />Wholesale Customers’ share of Hetch Hetchy Enterprise expenses.