PUC staff previews WESIP revisions: schedule slips, major project cost increases and risk options

San Francisco Public Utilities Commission staff on Wednesday previewed proposed revisions to the Water Enterprise System Improvement Program (WESIP), telling commissioners the program’s overall completion horizon has moved about six months and that several large projects are driving cost risk.

Julie Labonte, VSIP director, said staff’s updated schedules shift the program’s peak spending modestly but push the program completion from June to December 2014 under the revised baseline. Labonte told the Commission that eight projects were accelerated, 22 were largely unchanged and 14 were extended by more than three months.

Labonte identified three projects with significant cost increases — the Bay Tunnel (Bay Division Reliability Upgrade), Calaveras Dam and the Irvington Tunnel — and said the increases largely reflect unforeseen site and geotechnical conditions discovered after earlier estimates. On the Bay Division Pipeline 3–4 seismic upgrade, Labonte said the selected alternative would require custom ball joints (fabricated overseas), which add roughly 18 months to that project’s schedule, and pledged to reassess alternatives and report back.

On schedule risk, Labonte said staff reanalyzed the effect of the program’s environmental review. "If the PEIR stays on its current schedule, which calls for its certification in May of '08, we have no projects being impacted," she said, adding that a three‑month PEIR delay would affect the Bay Tunnel and longer delays would affect more projects.

City Attorney’s Office counsel advised commissioners on legal exposure under CEQA: depending on a court’s later decision, plaintiffs could seek to stop work if the EIR were found inadequate, though certification gives the Commission a basis to rely on the document while proceeding with construction.

On cost, Labonte said the recommended program shows about a $39 million (roughly 0.9%) net increase assuming a 3.5% escalation and no added program‑level contingency; she described construction costs as largely unchanged but said soft costs and right‑of‑way increases contributed to the program delta. Labonte also flagged a separate consultant recommendation to raise the escalation assumption to 4.5%, which Parsons estimated would add roughly $95 million to the program, and Parsons’ separate recommendation for a 5–10% program contingency (a 5% fund would add about $219 million).

Commissioners pressed staff about staffing and shutdown resources for simultaneous projects. Labonte and operations managers said design and environmental staffing is adequate now, construction‑management capacity will be supplemented with consultants and internal reassignments, and staff committed to deliver a project‑level staffing plan.

On next steps, the general manager and city attorney said staff can publish the state notice required under AB 1823 and continue the public process; staff recommended moving forward with Option 1 (implement the risk‑mitigation plan, post notice and return with final recommendations in January). "We will post all the documents on the web," Labonte said, and staff agreed to broaden outreach to regional partners and stakeholder groups.

Public comment included a local resident’s request that the Commission publish the program critical‑path schedule for public review; Labonte pointed commissioners and the public to handouts and said detailed schedules and handouts would be posted online.

The Commission did not take a formal vote at the workshop; staff were directed to publish the AB 1823 notice, provide more detailed staffing and project‑level assessments, and return with formal actions in January.