construction activities. he is one of the young city staff had a project in the field and has a very bright future for the organization. a recap here on the project -- this is a $61 million project that spans the valley, one of our most critical seismic reliability projects involving the construction of the seismically reliable conduit's across calaveras fault and tunneling under the sensitive alameda creek. elements for the construction of 3,000 feet of 66 inch diameter pipe across the calaveras fault, including an engineering crossing over the fault. a new structure before it is delivered to our customers. new chemical interdiction

facilities on the siphon floor. new isolation and valves to allow us to move water between the various siphons following a seismic event. to minimize the environmental impact on alameda creek, our construction contract specified the 550 foot segment of the new siphon to be located under the creek had to be built using a trench less technology. the contract specified the creek crossing is to be completed prior to october 15th to make sure we met the requirements outlined in a permit issued by the california department of fish and game. the subcontractor performing the tunneling work mobilized on site on august 24th and actual micro tunnelling operations started on some timber eight.

then on september 22, the first days following the operation with the micro boring machine, and the advanced further beneath the creek. what is shown here is a simplified diagram of the sequence that took place to resolve the issue. there were a number of meetings involving the contractor and the team that took place to deal with the issue. we considered leaving the crossing as an open cut. we considered abandoning tunnelling operations. we also looked at an auction where we would take a smaller -- we looked at an option where we

would did a smaller shaft. a decision was made within two days to pursue the last option. within a week, we were starting to dig their recovery shaft. in the meantime, we had contacted the california department of fish and game to ask for an extension of the october 15 deadline. that was granted. we had until november 30 to dig in alameda creek. we also had an expert opinion to determine why the machine did break down. finally -- it was found that the gear box of the machine was defective and it was replaced. and the tunneling operation

resume nine days later on october 15 and was completed on november 14, will before the new deadline by the permit agency. whenever a machine get stopped in at tunneling project, that is your worst case scenario. the fact that we were able to troubleshoot the situation within 24 days was pretty remarkable in my view. that shows that the measures put in place under our cm program were pretty effective. i am pleased with the overall organized response, with all the parties involved and in the project together. we pulled onion power engineering team. we brought in project

management. environmental compliance very early on. the contractor tried to work with us proactively on identifying the best course of action. i think that's finally this third party for tunneling consultant -- that was also a good decision. that person made the recommendation, despite the methodology that was going to be used in the tunneling operation. the cm program includes well over 50 procedures. whenever staff or at consultant is added to the program, they are fully trained. they are expected to be familiar with all of them. the key function of some of these procedures involve

business processes, some of which are automated, to our construction management information systems. there are some key figures that did come into play with the resolution of the tunneling issue. still, there are a number of reasons why this creaky enhances our ability to efficiently deal with issues like this one issues like all our team's work in coordination with preestablished procedures. we have high visibility to all team members on important issues. we are able to follow these issues, the progress made on resolving them, from anywhere. it can be done.

we can facilitate e functions such as court administration and -- key functions such as core administration. we promote a lot of pro active -- pro-active activity. i think, in yen, timely decision making and great cooperation were the key reasons we were able to resolve this so efficiently. we recognize that we had a time line here. the fact that an established business processes also allow this to results as quickly. -- to resolve this quickly.

vice president moran: first of all, congratulations on an excellent process, which i think is remarkable. he currently think the project is 82% complete. >> for essential completion, i guess. vice president moran: who covers the cost on the days that were lost? work started 24 days after the machine broke down. >> yes. do you want me to cover that now? vice president moran: no. i want you to answer my question. the covers that cost? >> part of the answer is on this slide here. he immediately entered into an

agreement -- be immediately entered into an agreement with the contractor. we did not spend a lot of resources trying to establish responsibility. we agreed we would share ongoing costs until we could determine responsibility. interestingly, we never did exercise the agreement because we quickly found out the reason for the breakdown. i was going to cover that later. basically, the breakdown was due to defective -- to a defective gear box, which produces the energy for the cutter head -- short in answer, the contractor -- short answer, the contractor suffered the loss. putting it back, the lost time

-- no. we have not started negotiation on this. we have yet to receive a change order. we had a team conduct a very thorough assessment of the situation, the reason for the breakdown. we feel very strongly in is the responsibility of the contractor. so, we have directed our team to be ready to respond to any possible change order, but we have yet to see a change order. commissioner torres: were you involved in this? commissioner caen: john white was involved with this. he worked with julianne. -- julia. >> the contractor was aware of

our position. if they want to pursue this issue further, they will need to call our office and file a formal request. commissioner torres: do we have a case where the contractor is not as cooperative as this one allegedly is? >> that would be more of a department question. >> if he said jubilation was that it was a -- if the situation was that it was a change in conditions, it could be argued that it was different then the conditions within the contract. it could be talked about, ok, that is a change. we will pay for that. they are the supplier of the machine, so it is their responsibility.

however, if we were to purchase the machine and use it, that would be best, because they could not complain that you broke it. commissioner torres: i understand now. one last question. when you are looking at this process and how we got to this point -- which is very important. the nature of so many of these contracts, it is prospectively as well. what extent are we taking to make sure future machine is taking care of? >> this is an incredibly useful -- unusual situation.

eric -- >> first time ever. >> first time ever that the manager can recall. i do think we have this on a slide. when something like that happens, i require our team get together. i believe we handled it extremely well. there is always room for improvement. the two areas we discussed to look at potentially -- revising our own process to avoid something like that and andy future -- the specification for what we call the pressure balancing method. it is home to funnel, and we basically would change that specification. not only was there a malfunction of the machine, but the method was insufficient. the contractor was tunnelling using water.

we may look at our specs. the tunnel boring -- the subcontractor also added another element. they were planning on using the same machine. they had to get another machine at the last minute. there is this whole issue -- would there be a process for us in capacties? when they are small like that, they may only have one machine. we may need to look at capacity. commissioner torres: one final question. at the end of the day, what did we say about why this project was delayed? >> without this, the entire

service area west of the irvington tunnel would be lost. commissioner torres: i have had feedback. "we do not understand what projects you are discussing." i think it is always in order to give a very simple explanation so that the average person understands what we are working with and begins to understand the tremendous savings to get this adjudicated and ameliorated. >> i appreciate the sentiment. president vietor: it may be helpful that when we get the 10% variance request in april to

break it into short sound bites on the specific projects. maybe thinking like that. >> desk. -- yes. president vietor: thank you. >> again, the idea of fostering a very cooperative environment was also a key. this team has been one of the teams that has been proactively partnering in practices. you know, i think working with the contractor, eric g., they have to be commended for how proactively they tackle the issue from the beginning. there are remaining steps there

are remaining steps, although we dealt with the issue in the field. the issue is what caused the breakdown of this machine. we believe strongly it was the fact that the machine's gearbox, and the contractor was responsible for the incident. we did receive a changeover request from the contractor, launching a receding shaft, but nothing about the incident itself. if a changeover request was to be submitted and if we were not able to negotiate an outcome, we would go to our dispute resolution board. we have one of those for every process. we have started having discussions on what we could change to avoid this in another

project. i just wanted to share, before i end, a few photos so you can see the actual work. like a said, within a week, we were digging and new shaft. we are very fortunate. the machine actually broke down under a small island in the middle of the creek, making it less interested in minimizing the environmental impact of taking the shaft. what you see here is the contract for cutting away the shoring place in the recovery shaft to allow us to access the machine.

we pushed the machine into this recovery shaft. what you see here are workers leaning into this. this is the machine, and the chamber behind it. it is being pulled out of the recovery shaft. this is what it looked like when it was sent back to the shop. it was in remarkably good shape. it is an indication that the problem was not with the cutter head itself, but with the internal parts of the machine, and this was confirmed later. before i end here, this is where we stand today. we are 80% done. we did encounter conditions on this project where the existing

areas were not on the same level. i am confident that unless we have any significant changes between now and into the project, that we will be able to complete the final 10%. i would be happy to answer any additional questions you may have. president vietor: [unintelligible] commissioner torres: i just of commons. this is the kind of response he would -- you would want to see. wendy's tunnelling projects go wrong, they go wrong in a big way. they certainly get your attention quickly enough. that is one reason why i think it is important to pay the same

kind of attention to issues when they, up, the scene in powering of people -- empowering of people. that is every bit as important in the small projects as the large projects, and they tend to get less attention. this is what a good process looks like. this is the kind of thing that hampers careers. i think this will serve as very well. thank you. >> thank you. >> the next item -- i believe commissioner caen was on the commission when the sustainability program was

adopted several years ago. one of the items on the action plan was to consolidate that puc sustainability plan with national efforts. this is the result. we will talk about how you can read this and look at it, but also if you have any feedback now or in the future, we would love to hear it. these are the key documents he will be looking at in july -- you will be looking at in july for our annual retreat. >> thank you. >> the day before my birthday. >> oh. [laughter] >> thank you. i am here to provide you an overview of our sustainability

plan. i am sorry. i understand you have this response and your packet. i will start with the first one. what is the strategic sustainability plan? this is for planning, managing, and evaluating performance. it takes out what is commonly called the triple bottom line. our focus is on environmental and social impact for business and environmental activities. it is considered a sustainability best practice. so -- what is the utility of

this plan to our stakeholders? to you, to external stakeholders, and to puc staff? it provides a view of activities across sfpuc that gives us a bird's eye view of how we are performing those activities. it also provides a framework to assist in fiscal year and long- term planning. it streamlines our performance, and and they know that the report twice a year to the comptroller's office on various performance indicators. we have been working with in the name -- we've been working so that we report on the same set.

from my perspective, it is the job saving goal in performance evaluations. how did we create the strategic sustainability program? we have the strategic action plan, which some of you may recall from 2010 needs. we also true from power -- we also drew from how empowering program. this is based on a 2005 study with quarterly reporting that updated that. we brought all the issues together, and we provided a material analysis of these issues, and along with them, our

budget staff brought in a third- party experts to gauge of performance indicators and best practices. you will see that the framework is made up of two. the dynamic section, if you will recognize. the durable section is something new. this primarily involves the integration of the offices. i will pause very quickly for comments. we have five goals that are consolidated from the strategic action plan and the sustainability plan. next, the six triple bottom line categories. you recognize the environment

and natural resources, the community work place, infrastructure. we have seven objectives that we integrated, and this was the primary focus for our material analysis. and associated with each of these objectives was at least one, if not more than one, performance per year. and you do not see them on this training. this is the durable section. the whole point of the durable section is to drive in inspire

the needs for the fiscal year, and to operate in order to identify inefficiencies where we can make the most progress leading our objectives and strategies. durable elements will be evaluated by a third party every two years. but not only will the durable section be evaluated. both sections, the framework as old, and -- the framework as a whole, and we will take into account in a valley with in a performance. the dynamic section -- to be repetitive, again -- is to make progress against our objectives and goals one thing to keep in

mind as you looked at the plan, this is the planning for fy2010- 2011. we initially did not have a dynamic element. we are anticipating the dynamic and durable sections will be seamless. so, just a couple of real quick examples. i am referring to the spreadsheets, the plan for fy 2010-2011. the first example is ries recycling. -- grease recycling. obviously,