In accordance with Section 73502(c) of the California Water Code, the San Francisco Public Utilities Commission (SFPUC) is pleased to submit the annual report describing progress made on the implementation of the Water System Improvement Program (WSIP) during Fiscal Year (FY) 2007-2008.

The WSIP is a multi-billion dollar, multi-year program to upgrade the SFPUC’s Regional and Local Water Systems. The program will deliver capital improvements that enhance the SFPUC’s ability to provide reliable, affordable, high quality drinking water to its 27 wholesale customers and regional retail customers in Alameda, Santa Clara and San Mateo Counties, and to 800,000 retail customers in the City and County of San Francisco, in an environmentally sustainable manner. The proposed WSIP is structured to cost-effectively meet water quality requirements, improve seismic and delivery reliability, and meet water supply objectives for the year 2030.

This report addresses progress made on meeting program Level of Service (LOS) goals and objectives, and implementation of specific improvement projects for the SFPUC Regional Water System. Section 1 of the report describes major program-level accomplishments, whereas Section 2 focuses on project-level accomplishments in the various WSIP regions. The last two sections of the report document formal actions and financial events associated with the WSIP.

One of the program’s most significant undertakings this past fiscal year involved an assessment of the various conditions and aspects of the WSIP that could impact the SFPUC’s ability to deliver the program as planned. Two programmatic efforts – Risk Assessment and Program Re-alignment Initiative - resulted in the formulation of a Risk Mitigation Action Plan and the identification of project scope, schedule and budget adjustments necessary to best deliver the program while still continuing to meet all underlying WSIP LOS goals. These efforts culminated with the formal approval of program changes and the subsequent submittal of a Notice of Changes to WSIP report to the California Seismic Safety Commission and the California Department of Public Health in March 2008.

The program is on target to achieve an overall completion date of December 2014. The program, as a whole, is in the design phase and transition of large regional projects to the construction phase is anticipated to begin in late 2008/early 2009. As of June 30, 2008, there are eight (8) regional projects in planning, twenty-eight (28) in design, one (1) in bid & award, five (5) in construction, five (5) in closeout; three (3) regional projects were completed, and three (3) had multiple active phases.