As required by the Wholesale Regional Water System Security and Reliability Act (AB 1823) annual reporting requirements, this document reports the progress achieved on the Water System Improvement Program (WSIP) during Fiscal Year (FY) 2006-2007.

The purpose of the WSIP is to deliver capital improvements aimed at enhancing the ability of the San Francisco Public Utilities Commission (SFPUC) to meet its water service mission of providing high quality water to its 2.4 million customers in a reliable, affordable and environmentally sustainable manner. The WSIP is structured to bring about, in an expeditious manner, water quality, seismic reliability, delivery reliability and water supply improvements.

The program which is being reported for FY 2006-2007 consists of projects that provide improvements to treatment, transmission and storage facilities, and are as listed in the “AB 1823: Notice of Changes to the Water System Improvement Program” document of January 2006. It should be noted, however, that to maximize delivery efficiency and reduce costs, two projects have been combined in the San Joaquin region, and also two in the Sunol Valley region. In the San Joaquin region, Advanced Disinfection and Tesla Portal Disinfection have been combined, and the combined project is now reported as Tesla Treatment Facility. In the Sunol Valley region, Sunol Valley Treated Water and Additional 40 MGD Treated Water Supply have been combined and are now reported as SVWTP Expansion & Treated Water Reservoir.

This past reporting period the public draft Program Environmental Impact Report (EIR) for the SFPUC’s Water System Improvement Program was issued by the San Francisco Planning Department, Major Environmental Analysis (MEA) Division. SFPUC efforts focused on better defining the environmental review, environmental permitting, and right-of-way activities and schedules; revising the Work Breakdown Structure for the cost-loaded project schedules; determining necessary system shutdowns; analyzing construction sequencing and schedules; and planning construction management and organization. In addition, a schedule and budget realignment exercise was initiated along with a risk assessment by WSIP program consultants, Parsons and CH2M Hill. Both the schedule and budget realignment efforts and the risk assessment task are expected to be completed near the end of the first quarter of fiscal year 2007-2008.

The Quality Management Program initiated at the end of fiscal year 2006-2007 continues to be utilized, with numerous reviews at various project milestones. In regards to labor initiatives, negotiations for the Project Labor Agreement (PLA) were completed between the SFPUC and all affected local, regional and national construction craft organizations. The PLA will assure the timely, cost-effective and efficient construction of the WSIP by facilitating communication, education and partnerships among the SFPUC, unions, contractors, and contract-enforcement agencies, identify and resolve issues to enhance understanding and compliance with labor related policies and regulations, and provide the means for peaceful settlement of labor disputes and grievances without strikes or lockouts.

The SFPUC strived to move the WSIP forward again this past reporting period, focusing on expediting planning, environmental review and design efforts for all the regional projects. The last two WSIP projects that had yet to start, Watershed and Environmental Improvement Program, and Bay Division No. 4 Slipline PCCP Sections, were initiated this past fiscal year.

As of June 30, 2007, there are seventeen (17) projects/sub-projects in the planning phase. Twenty-nine (29) projects/sub-projects undergoing environmental review, and twenty-five (25) projects/sub-projects in the design phase, including the following major projects:

• SJPL System
• New Irvington Tunnel
• Alameda Siphon No. 4
• Calaveras Dam Replacement
• Bay Division Pipeline Reliability Upgrade (Pipeline and Tunnel)
• BDPL Nos. 3 & 4 Crossovers
• New Crystal Springs Bypass Tunnel

In addition, a total of five (5) regional project/subprojects are in the bid and award phase, and ten (12) are in construction.

The Annual Progress Report For Implementation of the Water System Improvement Program is attached below.