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PUC reports WESIP construction momentum, flags soft-cost increases and environmental permitting risks
Summary
PUC staff reported progress across WESIP projects — $210M completed locally, $1.1B in regional construction — but warned of soft-cost increases, a $12M variance on the Harry Tracy project and schedule risks due to environmental permits and migratory-nest discoveries.
The San Francisco Public Utilities Commission received its WESIP (water and related infrastructure) quarterly update, which showed significant movement into construction but also new cost and schedule pressures.
Julie Labonte, presenting the third-quarter report, said 31 of 40 local projects are in construction or completed, with $210 million of local projects finished. Regionally, the value of projects in construction rose to approximately $1.1 billion and additional projects moved into bid and award stages. Labonte said the program is ‘‘marching steadily towards 50% completion in the construction phase.’’
Labonte and General Manager Harrington highlighted emerging risks: permitting agency responsiveness could impact schedules for dam projects (Calaveras and Lower Crystal Springs), environmental discoveries such as migratory bird nests and archaeological sites may require workarounds, and new stormwater and CEQA guidance raised additional work by July 1. Project-level variances include a 12-month schedule extension and a $12 million forecast variance for the Harry Tracy plant, and a $99 million increase projected for the Crystal Springs pipeline replacement based on new 95% design cost estimates. Labonte said some increases are placeholders while permitting and environmental conditions are negotiated with agencies.
Commissioners pressed staff on earned-value reporting and apparent underperformance numbers; staff said earned-value metrics reflect approved baselines from July and that construction performance can be on track while project-level metrics lag due to preconstruction delays. Staff said they will propose dual reporting in the new quarterly format to show both project-level and construction-phase performance.
Labonte said ten contracts worth about $866 million were slated to be awarded in the remainder of the year and projected substantial work ahead, including EIRs and system shutdown work. She also said staff has asked Parsons and the project-control team to scrub soft costs and report back to the commission.
Why it matters: The program is central to San Francisco’s long-term water reliability; early construction gains reduce some delivery risk, but rising soft costs and permitting delays could increase program contingency needs and affect rates or schedule.
