Costs have spiked $130 million for the first phase of San Diego’s Pure Water sewage recycling system because of lawsuits over which workers would build the system and higher costs for steel and other materials during the pandemic.
The City Council this week approved the project’s 12 percent cost increase for Phase 1 from $1.08 billion to $1.21 billion, which comes just as construction of Pure Water’s first phase is kicking into high gear.
Lawsuits filed by contractors delayed by more than two years the city’s plan to seek construction bids for the dozen projects that make up Pure Water, making the contracts more expensive because of inflation during the pandemic.
City officials helped solve the problem last year by approving San Diego’s first-ever project labor agreement, a union-friendly deal. Pure Water projects are expected to create 4,800 construction jobs.
Even without the delays blamed on lawsuits, city officials say the higher cost of materials would have increased Pure Water’s price tag. They attribute $90 million of the $130 million spike to litigation and $40 million to materials costs.
Construction has begun on most of Pure Water’s key elements, including a sewage purification plant in western Miramar, a pipeline through Clairemont and University City that will bring sewage to that plant, and a Morena Boulevard pump station to make that possible.
A few remaining projects will break ground either this winter or next spring, Shauna Lorance, director of the city’s Public Utilities Department, told the council during a Tuesday public hearing.
Lorance said city officials have also begun preliminary work on the second phase of Pure Water, which will produce more drinking water than the first phase — 53 million gallons a day versus 30 million gallons a day.
Together, the two phases are slated to produce half of San Diego’s drinking water when phase two is complete in 2035.
A required demonstration project for phase two is planned for Point Loma at a cost of $40 million. That project will prove to regulators that phase two is a viable plan, city officials said.
City officials may also adjust the purification process. The purified sewage might be pumped directly into the city’s water supply, instead of being placed first into a city reservoir — Lake Miramar is being used for phase one.
Big decisions remaining for phase two include where to locate the purification plant. City officials have previously mentioned sites in Mission Valley.
The $130 million spike for phase one will increase the overall costs for Pure Water, which have been estimated at somewhere between $4 billion and $5 billion.
While much of those costs will be passed on to sewer and water ratepayers, city officials stress that the city’s only other option would have been spending an estimated $3 billion upgrading the Point Loma sewer plant and continuing to have expensive imported water make up 85 percent of the city’s supply.
Lorance said Tuesday that Pure Water costs less per gallon of water than desalination.
Councilmember Vivian Moreno said that with climate change and drought becoming steadily more impactful, it is especially crucial for San Diego to seek water independence and a reliable local supply.
“The financial commitment is significant, but the investment we make today is a drop in the bucket compared to the potential costs of water in the future,” she said.
Councilmember Sean Elo-Rivera agreed.
“We’re securing the water future of our city and investing in a more livable city for future generations,” he said. “That’s a very important and powerful thing.”
The council also got good news on the expensive and complex federal waivers San Diego repeatedly needs to secure for the Point Loma sewage plant. The waivers allow the plant to continue operating without any upgrades despite it releasing more pollutants into the ocean than the Clean Water Act allows.
Legislation related to the waiver that the U.S. House of Representatives approved in June is scheduled for discussion soon by the U.S. Senate’s Committee on Environment and Public Works.
The legislation, which is sponsored by Congressman Scott Peters, would streamline and simplify the waiver approval process, which typically costs the city about $500 million each cycle.
The council also agreed to let Mayor Todd Gloria approve — without a council vote — increases to Pure Water construction contracts as large as $2 million. Gloria has had discretion to approve increases as large as $1 million.
Council members, who would still get a memo about such spikes, said giving the mayor additional discretion would help keep Pure Water construction moving.
For details on the program, visit purewatersd.org.
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October 28, 2021 at 07:00PM
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