AB 2437

Legislation to Amend the Wholesale Regional Water System Security and Reliability Act (2008)

(Author: Assembly Member Ira Ruskin)

Question:What is the Wholesale Regional Water System Security and Reliability Act (AB 1823)?

Answer:  AB 1823 provides a process, established by the State Legislature, to ensure that the San Francisco Bay Area Regional Water System is rebuilt as soon as possible.

It is designed to help protect the health, safety and economic well being of 2.4 million residents, businesses and community organizations in Alameda, San Mateo, San Francisco and Santa Clara counties who depend on the system.

Question: What does AB 2437 (Ruskin, 2008) do?

Answer: Developments between 2003 and 2008indicate that three amendments should be made to AB 1823 to recognize present realities.

The Act requires San Francisco to take a number of steps to ensure the reliability of water supply to this region. These requirements include:

  • Adoption of a capital improvement program, now called the Water System Improvement Program (WSIP), to rebuild the system.  When first adopted and submitted to the State the estimated cost was $3.6 billion. The estimated cost is now $4.3 billion.  All costs will be paid by users of the water system.
  • The original program schedule was to require projects representing 50 percent of the total program cost be completed on or before 2010.  San Francisco now estimates that only 20 percent of the projects will be completed by 2010.
  • Annual progress reports by San Francisco to the Joint Legislative Audit Committee (JLAC), the California Seismic Safety Commission (CSSC), and the California Department of Health Services (CDHS).
  • Additional, prompt reports to the CSSC and the CDHS if San Francisco deletes one or more projects from the WSIP or postpones the scheduled completion dates for projects.  These two agencies are to evaluate the significance of those changes for public health and safety and send their assessment to San Francisco and JLAC.  Major changes to the schedule were made by San Francisco and evaluated by CSSC and CDHS in 2005.  San Francisco has just recently given notice of additional changes, which delay project completion dates.

AB 1823 also contains a “sunset provision” that this law shall be repealed when the CDHS certifies that construction contracts for nine specified projects have been awarded or following December 31, 2010, whichever comes first.  Following the legislative mandate, San Francisco has done a great deal of planning and environmental review, but construction has not begun on most projects. Major challenges remain and continued oversight will continue to be critical. For example, only 20 percent, not 50 percent, of the required work will be done by 2010. Because of the “sunset provision,” the state’s valuable oversight and the discipline imposed by state law will end when 80 percent of the program is yet to be completed.  Consequently, the “sunset provision” of AB 1823 should be extended to January 1, 2015.

Sect. 6 of AB 2437, and Sect. 4 of Chapter 841, Statutes of 2002, enacted by AB 1823 states that:

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.

The Act also ensures that the users of the San Francisco water system, not state taxpayers, will pay for the cost of state oversight provided by the Act.  Water Code Section 73512 provides:

“A regional wholesale water supplier shall reimburse the state for all costs incurred by the State Department of Health Services or the Seismic Safety Commission in carrying out the duties imposed by [the Act].  The bay area wholesale customers shall reimburse [San Francisco] for their share of those costs, as provided in the master water sales contract.”


Thus, AB 2437 will have no financial impact on State funds as costs are fully reimbursable.

In addition to the sunset extension, AB 2437 contains two other amendments to the Wholesale Regional Water System Security and Reliability Act:

  • Amends Section 73502(c) to require San Francisco’s annual progress reports to the State to identify any projects that are behind schedule and to describe the City’s plan and timeline for either making up the delay or modifying the schedule itself.


  • The name of the Department of Health Services in the present law should be changed to the new name, Department of Public Health.


This is an overview of the legislation. View entire document here (27K PDF)