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Stage 5: 40% – 50% target water savings results in $8.8 million shortfall Stage 6: Greater than 50% target water savings results in greater than $8.8 million shortfall Proposed addition: insert the following "Lookback" paragraph at the end of the Revenue Reductions subsection (after the stage list, before "Mitigation Actions"): Lookback — Financial Consequences of the 2021–2023 Water Shortage Emergency. In November 2021, the SFPUC declared a Water Shortage Emergency and called for system-wide voluntary water-use reductions. At the time of the declaration, SFPUC system storage was at approximately 4.5 years of supply; storage never fell below approximately 4 years of supply during the entire 2020–2023 drought. The City's response — the 15% voluntary reduction described on p. 97 — produced an estimated $2.5 million revenue shortfall for the City and contributed to a long-term ~10% per-account reduction in water use that persisted through FY 2025 (see p. 53). The SFPUC itself experienced an FY 2023–24 revenue shortfall of approximately $25 million in retail sales and $5 million in wholesale sales after declining to lift the drought surcharge until May 2023, despite SFPUC system storage reaching 92% of capacity by mid-January 2023. Going forward, the City should weigh these revenue and rate-stability consequences when responding to future voluntary or mandatory conservation calls and should request from the SFPUC the supply-storage data underlying any future Water Shortage Emergency declaration before the City implements corresponding WSCP stages. Editor's note — The current paragraph quantifies revenue shortfalls per WSCP stage but provides no historical context on whether the conditions that triggered prior shortages were warranted. The 2021–23 episode is the most relevant, recent case study and is directly responsive to the Water Code §10632(a)(8)(A) requirement to describe potential revenue reductions associated with shortage response actions. The lookback is factual, sourced to SFPUC's own drought- conditions updates and budget reports, and it provides Council and staff a basis for setting more deliberate triggers for future WSCP activations. ────────────────────────────────────────────────────────────────────────────────────────── Edit 5 — Section 8, Dry Year Scenarios (p. 116) Subject: add a one-sentence reservation of rights regarding >20% allocations. Existing draft text (verbatim, UWMP p. 116): For water shortages up to 20%, the Tier One water shortage plan will be applied. The Tier One plan does not apply to system-wide shortages greater than 20%. Implementing water use reduction greater than 20% requires the SFPUC to meet and discuss with Wholesale Customers a strategy for meeting incremental reductions above the Tier One plan. The SFPUC has the authority to make final allocation decision for the portion above 20%, though the Wholesale Customers have the contractual right to challenge the proposed approach. This analysis assumes the relative split of available water between SFPUC Retail and Wholesale Customers will be the same for shortages greater than 20% as shortages of 20%. Proposed revision (edits shown inline):