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WSIP quarterly update: bidding savings offset regional overruns; Calaveras Dam and Harry Tracy drive largest variances
Summary
PUC's WSIP quarterly report showed $71M in forecast savings due to favorable bidding, but large variances remain—chiefly a 42‑month delay and higher cost at Calaveras Dam (asbestos, constructability) and issues at Harry Tracy—that will require further contract authority and oversight.
At the committee's June 3 meeting the Water System Improvement Program (WSIP) team presented a quarterly update showing mixed results: favorable bidding produced approximately $71 million in reduced near‑term cost forecasts, while two regional projects—Calaveras Dam and Harry Tracy—account for the majority of outstanding variance and projected increases.
Julie Labonte, presenting the quarterly report, said favorable market conditions had driven a $71 million decrease compared with the previous quarter and that more than half the WSIP projects (45 or more) were in construction or complete. She said the total forecasted cost for WSIP at the end of the quarter was $4.59 billion, down $71 million from the prior quarter but still above the approved program of $4.39 billion.
Labonte identified the largest schedule and cost variances: Calaveras Dam carries a projected 42‑month delay with 24 months attributed to environmental review and permitting and 18 months to constructability and field conditions, including significant naturally occurring asbestos at concentrations requiring conservative mitigation measures. She said the presence of one of the more toxic forms of naturally occurring asbestos in the rock has forced a major change in construction sequencing, additional monitoring, worker decontamination and protective measures, and reduced daily production rates. At Harry Tracy the program completed a value‑engineering exercise and continues independent reviews to identify possible savings, but both projects still carry large, largely unavoidable costs tied to safety and environmental constraints.
Labonte said the favorable bidding climate had produced bids 20–40% under engineering estimates for many projects and that the program planned to push work into construction while verifying costs on specialty projects. She also noted the program will seek further contract authority for Calaveras Dam in July to fund engineering and environmental services.
Supervisors asked whether the program could bring the total forecast back in line with the approved budget; PUC staff said some overruns are likely unavoidable given field conditions but that they would continue value engineering and independent review while timing debt issuance to limit rate impacts (noting Proposition E authority and use of commercial paper until needed). The committee agreed to continue Item 7 to the next quarterly report.
Next steps: PUC intends to request additional contract authority for Calaveras Dam later in July and will continue quarterly reporting; supervisors requested further detail on asbestos mitigation plans and related cost controls.
