SFPUC reports WESIP progress, approves contract adjustments and moves to issue up to $600M in bonds

Commission staff delivered a comprehensive capital program and budget briefing and the commission approved several contract and financing actions. Julie Levante and Ed Herring summarized construction progress across regional and local programs, noting $1.6 billion of projects in construction and several milestones completed ahead of schedule (e.g., Crystal Springs Bypass Tunnel). The local program was forecasted about $31 million over budget in the quarter, while the regional program was forecasted $94 million under budget.

Significant variances called out included a $11.5 million forecast increase on the San Antonio backup pipeline and an estimated 37‑month delay on that project’s schedule; added costs for Bay Division Pipeline No. 3 & 4 seismic upgrades (approximately $6.2 million over budget) were also described. Staff said some cost increases reflected newly discovered field conditions (archaeological sites, nickel‑contaminated soils, obstructions) and added necessary design components.

The commission approved several construction‑related items by voice vote: increased contract contingencies for Bay Division Pipeline No. 5 (East Bay and Peninsula reaches) and amendments to construction‑management agreements to support pre‑construction activities for habitat restoration sites. CFO Todd Reedstrom presented a bond‑sale proposal: staff seeks authority to issue up to $600 million in water revenue bonds under Proposition E, including tax‑exempt and Build America Bond structures and up to 40‑year terms; timing was chosen to capture a federal subsidy for BABs and reduce borrowing costs. The commission approved moving the bond authorization forward to the Board of Supervisors for final action.