water we talked about just now o, a similar evaluation of the facilities consent -- plant, and the intent is to come up with the same level of critical scrutiny and that clearly the power they received over the next year commoand to make sure those are instructed as economically as possible. the second thing is to revisit the financial plan. we also talked about the general fund subsidy issue, about how we

structure rates to explain to people out there is a need for the rate increases, and i would like to make sure we take a look beyond. all of them have the option of postponing various elements, so we need to look of what we are doing. we are continuing to work on the plan. the third is to put together how

we think about resources portfolios, and i mean water as well as clean water, and the same basic thinking applies. how much water supply do we need to develop and what logic, and what a life travois is -- what i would like to avoid is putting together appliance -- a plan.

>> i think that is an excellent suggestion, so we can have them well in advance of next year's budget. >> thank you. >> any other comments or questions before we go to the next item? >> item 10 was called. >> item 10 is a motion to calendar a public hearing on may 10 for the environmental enhancement surcharge. is there a motion? >> second. >> all those in favor? it carries. next item please. >> item 11 has been called.

>> retail power rates, the adoption of charges. is there a motion? >> i suggested at our last meeting is something that did not make it into the packet that was history did, but we did have a red line version of fat -- of that, and it basically says but during the time reports came and the reason for it. i would move that as an amendment. >> all those in favor? of pose, -- opposed?

is there a motion to adopt osama -- to adopt those thomas -- those? >> thank you. >> any public comments? all those in favor? thank you very much. next item. >> the next item is the report to general management theory. >> we did not want to flood you with more information, but we did have an independent review. i wanted her to give you an update on from the last quarter,

but we asked the person in charge to give comments also. >> if you would not mind connecting the computer please. i am here to give you the highlights of our quarterly report for fiscal year 2010 through 2011, and that basically covers october 3 through the 25th. starting with the status update of our local project, once again, the numbers in parentheses are the total number in each phase of the program, and you can see the value in each phase. we only ask seven out of 40 local projects.

the recycled water project went to construction, and we also completed one project. the design phase is still the phase where we have the greatest project value. you should be aware of the phase, and finally, construction has been completed on 29 projects. a similar format for the regional program. the biggest piece of the pie is in construction. we only have seven remaining projects, and during the reporting quarter, the total volume reached $1.8 billion. you can see we have additional projects worth half a billion

dollars that are about to start construction. the total value it is the equivalent to more than 50% of the total value. another important project moved into construction, and we also completed the facilities project. at the end of december 3 completed 15 or one-third of our regional projects. this compares the last quarter to this quarter. the numbers in the black arts could -- are good. there is no change in the

original completion date. once again the project controls about completion date. we are forecasting a $175 million fund for the program. the variances on the local program remains the same. we are still forecasting to be 31 million over the approved budget. what i would like to point out is it is scheduled to be 42 million over, and we have local projects that offset that, bringing it down to 31 million. the 13-month delay is also controlled by the project, the water supply project.

all projects will be completed nine months earlier. you can see the downward trend on the project cost. we have been forecasting the cost to be below budget, and we lowered it by 81 million in the last quarter. we awarded two contracts in the corridor, and the chart shows we continue to benefit from the climate. the two total 66 million, which is 19 million less than budgeted. the interesting thing i wanted

to point ops is that we received only two saves, -- point out that we received only two davis -- bids. we also awarded two other contract since january, and in both cases they were 25% lower than budgeted. here is a summary of some of our achievements since the close of the last quarter. those include a harry traci water fund contract as well as calaveras county. we also had a for your project including calaveras, which was of a milestone and -- had a for

your project including calaveras, which was a vague -- had 4 projects, including calaveras 3 and we completed one project. technicalities were not quite done. the total value is $2 billion total. i also want to highlight an agreement we reached confirming the standard procedure isolates segments that are acceptable. this could impact costs greatly, not only on the program but on

puc operations. i will elaborate on those a little bit at the end of my presentation. i also wanted to point out one of the projects is the water supply project and two are what i consider the support project. these are cost projections that

have gone up $5 million, and the schedule has been increased three months. this includes relocation of existing lines in our proposed project area. >> of $5 million increase? what caused that? >> two major issues. one is that additional work had to be done for the crossing of the hayward fault. we have a process for that, but we completed a further adjustment for that, and they have still increase. there are pipelines that have to be relocated. those have to be read estimated

-- re-estimated as far as engineering costs and additional repair work. >> these are not amendments to an existing contract? >> we have yet to do the advertisement. >> who advised you? parts we have a consultant -- >> we have a consultant. >> they were called in because you had some questions? >> they were engineers. we have worked with them on refining the design, and this is a design that has been refined over the last six months, and you go through the various stages. when you are at 35%, you have a total amount of accuracy, and you are able to lower the cost further. those are estimates at this point.

because it's solidified as we award the contract -- the cost get solidified as we all mourn the contract. on the ground water storage and recovery, there were no changes last quarter, but we are having significant schedule impact on that project, and this is due to the fact that we need to add two new wells stations to the project. there is also a need to conduct additional studies. system security -- this is a project where we perform following completion of the project. the completion date was pushed back two months this past

quarter. this is another support type project your ego -- support tarp project. -- support project. we will have an impact on that habitat reserve program. considering the amount of work that is going on in the field, and they are resolving the issues as they arise.

goowe have had to work on a schedule amendment to to some operational constraints for our system shutdown. you have to monitor it, and we did that. it ran into an obstruction under the railroad. we are working that issue out right now.

we are expecting to start tunnelling with a different alignment this march. there has been done contaminated groundwater in the east bay, and we have modified our construction effort. there has been the discovery of a number of archaeological sites. in one instance, we have to tunnel to avoid a sensitive site. we tried to identify any potential other sites that will be in our way. native american artifacts -- i do not believe we did identify any human remains common -- human remains, but there is a process we need to go through to

assess what is found, and it involves the closest to the sentence -- descendants. they do get removed and inspected by the experts 3 your -- by the experts. in most cases we put him in the exact location. >> they are reburied in? >> in most cases, yes. >> i understand remains, but the procedure for artifacts is to read very -- rebury. >> it is interesting.

>> i could inquire. >> is a practice or the law? >> all of these are controlled by various resources. but there are regulations that require you to do that? >> thep control all the procedures that need to be followed, yes. >> we will be tunneling under and leaving them because it was felt it would be too much destruction to go through them and replace them. we have the waste water pipeline where there is already a pipeline in there, proposing to replace it with a new pipeline

that would have less of a cut, and we are required to do an archaeological study, because we could have previously disturbed remains from the first time needed it to reagan and -- the first time we did it superior -- did it. >> there is already a pipeline, but there could be previously disturb archeological remains. they are very concerned about the work we do. >> with the new real estate department? >> all of these challenges i have mentioned will have an impact, but when we have managed to move around them. as usual, i like to share some

photos, because there is so much going on, and the progress is astonishing. this project is 92% complete. i am sure you are going to be pleased to hear that for increased energy efficiency, we will install solar panels on top of the roof. >> i was just going to ask. >> construction is scheduled to be complete by april, which will give us a full year to test the facility before thue state mandates. this is a photo of the work is taking place in the treatment plan.

this is where the new reservoir will be. work on this project as a whole is now 23% complete. >> where does that material go? >> by the calaveras road. there is a whole area where we are filling an area that used to be an old landscaping or -- what do you call it? >> not a quarter mile. it is one side of our sunol ballot treatment plant. >> in the lower area by the road. there was a whole design. >> it is tested, right? >> yes, thoroughly. just down the road from the plant is the siphon four

project, and we achieved a significant milestone in november when we were able to complete tunneling under alameda creek. you will recall we had some technical issues with a micro tunneling machine, but our team worked closely with our contractor, and we were successfully able to complete operations. in the coming months, i will give you a presentation on how we resolve the issue in the field. the project is now 77% complete, and we're going to blow water through the siphon by the end of the month, which will significantly increased seismic reliability on the system, so that is another very major milestone. work on the new title is also proceeding very quickly here. what you see here is the east portal of the tunnel, and the contracts are there mobilized last summer. the three rove headers that are

required to tunnel -- one of the three is on site, and we will start actual, excavation by the end of this month on that project. moving on to our other tunnel, the bay tunnel. this project so far has gone also very smoothly. this is a launching shaft, and it will be completed very soon here. we expect the tunnel boring machine for the project to arrive on site in may, and the contractor is planning to lower the machine into the shaft this summer. this photo of the structural rehabilitation and roof project was taken a few months ago, i believe, because the roof structure is much more advanced now. the one challenge we encountered there was that some of the existing peers were somewhat misaligned. our cm team had to work with the

contractor to come up with a creative solution to address that in the field, which we did. completion right now is about 25%, and we are estimating that we will be substantially complete by may of this year. the otp order to proceed -- you see the inflation of the bridge -- demolition of the bridge on top of our dam. that was done on time for us to begin our work shortly. my last two slides basically our report cards on our key project milestones. the first two columns in blue, compared to what we actually accomplish compared to what is planned, and we've missed one milestone on the local program. it was categorical exemption for one of our projects.

we are on track now to obtain that this coming quarter. there were some issues with the design of the improvements. on the regional side, we actually missed four milestones. two of those are associated with one of our support projects. we missed a bid advertisement and a construction notice to proceed. we changed the contract thing strategy, which delayed the contract and going out to bid. it will have no impact on any of our ongoing projects. we also missed the completion of two small projects. the data system as well as the lawrence livermore project. they are both essentially complete. we technically cannot call them complete because of some additional payments and paperwork that needs to be done, but the improvements are in place.

i just wanted to -- i know this is a long meeting, so i will try to be brief. in late 2010, we performed two independent reviews on the program, and i believe that your packet included reports on both of these assessments. in general, staff and wsip team does agree with the findings of these assessments. in the first assessment, we had to independently review our schedule and determine whether it was compressed and also address some of the questions raised by this commission as well as bawsca. carson did conclude that our construction and closeout schedule were compressed, but they did also find that our reports of systems and procedures are or should be adequate to deliver the program as is. they also pointed out that the they also pointed out that the fact that we have more projects