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Committee advances $1.7 billion water-system bond authorization and WSIP update
Summary
The Public Utilities Commission updated the committee on the Water System Improvement Program and asked the committee to appropriate and authorize up to $1.7 billion in bonds for WSIP and related capital; analysts recommended reserves for large projects and inclusion of financing costs for the advanced-metering work.
The Budget and Finance Committee heard a program update on the Water System Improvement Program (WSIP) from Julie Labonte, WSIP director, and Todd Rystrom, PUC CFO/assistant general manager. Labonte traced major scope and budget changes since the program's early planning (2003), citing additions such as a Bay Division pipeline tunnel and expanded alternative water-supply projects that raised the approved program budget. She reported program status across local and regional projects (many projects in design or construction) and noted that construction value in the near term will rise to more than $1 billion in active construction.
Labonte said the PUC had convened an independent panel of experts to assess delivery readiness; the panel's findings were broadly positive and recommended periodic independent construction-management audits. PUC staff described recent bid results that produced substantial savings relative to engineer estimates and discussed community-benefit initiatives, including First Source/local-hire provisions, project labor agreements (PLAs) on city-built work and a proposed construction-assistance center to help smaller contractors compete.
Todd Rystrom presented financing details and requested appropriations and bond authorizations totaling roughly $1.7 billion (about $1.4 billion WECIP/WSIP and approximately $24.2 million in non-WSIP local capital in the packet described). He said the PUC plans to use commercial paper to defer long-term borrowing when possible and will return to the Board for individual bond-issue approvals; the PUC also sought authority to include advanced metering infrastructure in the revenue bond to achieve ratepayer savings. Budget analyst Mr. Rose recommended placing $116.8 million on the committee reserve pending further updates to project timing and recommended including $3,252,400 of financing costs for the advanced metering infrastructure item. The committee accepted the budget analyst recommendations, moved items 6 and 7 to the full Board with recommendation, and continued item 5 to the call of the chair.
