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Committee forwards PUC request to increase Parsons contract to full Board, asks for stronger oversight
Summary
After detailed questioning about rapid expenditure rates and vacant engineering positions at the PUC, the Budget & Finance Committee voted to forward a request to increase the Parsons Water Infrastructure contract from $38 million to $57 million to the full Board without recommendation and asked the PUC for biannual reporting and a reprocurement plan.
The Budget & Finance Committee voted to forward to the full Board for consideration a PUC request to amend and increase an existing agreement with Parsons Water Infrastructure for pre‑construction management services on the Water System Improvement Program from $38 million to $57 million. The committee voted to send the matter forward without recommendation, and it asked the PUC to return with additional reporting and to pursue a new RFP for remaining program construction management work.
Budget analysts and committee members pressed the PUC on the rate of expenditure: the budget analyst noted that the PUC had expended roughly 94 percent of the authorized contract funds 2½ years into a five‑year agreement. PUC staff explained Parsons was brought on to perform a top‑to‑bottom program review and to provide specialized technical expertise (tunnels, dams), accelerate rescoping work as the program grew from an earlier $3.6 billion scope, and to fill critical skill gaps while the PUC recruited or reclassified city engineers. PUC staff presented a program cost breakdown showing roughly $2.9 billion in construction costs, about $960 million in 'soft' project delivery costs and finance costs of approximately $460 million; PUC said program delivery costs are within industry ranges.
To bridge to a competitive rebid of program construction management, the PUC requested a smaller interim authorization (about $7 million) while it prepares a program construction management RFP; committee members requested biannual reporting on expenditures and variances. City Attorney staff advised that the Board may approve or reject the PUC action and that reporting can be added as part of the Board package but cannot be conditioned outside legal process. The committee voted to forward the amendment/appropriation to the full Board for March 18 without recommendation and asked the PUC to return with updates during the budget cycle and again in August.
