San Diego’s Pure Water sewage recycling system has faced significant cost overruns due to issues such as tunneling complications and flooding. These challenges have increased the project’s cost by $130 million, a 10% rise that will likely result in higher water and sewer rates.
The city has nearly exhausted its $115 million contingency fund, set aside when the $1.14 billion project was approved in 2021. To maintain the construction schedule for pipelines, purification plants, and pump stations, officials now require an additional $130 million. This increase comes as the city aims to meet a federal deadline for completing the project by early 2027, as mandated by a settlement over the outdated Point Loma Wastewater Treatment Plant, which does not comply with Clean Water Act standards.
The City Council’s Environment Committee has approved the new contingency fund, although it expressed frustration and urged city officials to challenge cost increases asserted by contractors. One key issue with the project is the complexity of coordinating 12 separate projects managed by seven different contractors. Any change in one contract can have ripple effects on the others, as noted by Amy Dorman, Assistant Director of Public Utilities. She emphasized the importance of keeping schedules synchronized to avoid delays. To address these challenges, the city has hired a consultant with legal expertise to scrutinize contractors’ claims and ensure a stronger position in negotiations.
Council member Marni von Wilpert commended the new vetting team and stressed the need to maintain accurate records in case disputes arise after the project’s completion. While acknowledging the rising costs, she expressed satisfaction that the project remains on schedule. Council President Sean Elo-Rivera urged caution, expressing concerns that contractors might exploit external factors, such as the pandemic and the war in Ukraine, to justify cost increases.
To cover the additional costs, the city plans to issue bonds, with $80.9 million allocated for the water division and $49.1 million for the sewer division. The annual interest on these bonds, which will be paid by ratepayers, is estimated at $4.8 million for the water bond and $3 million for the sewer bond over 30 years. City officials acknowledged that rate increases would likely be necessary but said the exact amounts are still being evaluated.
On a positive note, the city’s long-standing collaboration with San Diego Gas & Electric has yielded savings by reducing utility conflicts. Originally estimated to cost $120 million, this aspect of the project is now expected to cost only $44 million. Additionally, the city has addressed major issues such as the flooding at the Morena Boulevard pump station, which required a $20 million secant wall, and boulder-related delays in tunneling under Interstate 805, which were resolved by adjusting the tunneling approach.
With these issues behind them, officials report that the project is now about 61% complete. Crews have installed 15 of the 30 miles of pipeline, completed eight of the 14 tunnels required under freeways, and finished the subaqueous pipeline at the bottom of Lake Miramar. For updates on road closures and construction progress, the public can visit purewatersd.org.