Department of Water Resources: The Unexpected Complexity of California WaterFix Has Resulted in Significant Cost Increases and Delays

From the California State Auditor

Summary: The California WaterFix Project (WaterFix) is intended to address environmental and water supply reliability issues related to pumping water from the Sacramento?San Joaquin Delta (the Delta). The Department of Water Resources (DWR) began collaborating with state and federal entities as well as local water agencies (water contractors) in 2006 to develop an approach to restoring the Delta and improving water reliability, referred to as the Bay Delta Conservation Plan (BDCP). In conjunction with developing the BDCP, DWR also initiated the Delta Habitat Conservation and Conveyance Program (conservation and conveyance program) to evaluate how to implement the BDCP, which included considering alternatives to the BDCP, performing preliminary design, and assessing environmental impacts.

Through this evaluation, DWR identified one of the alternatives—referred to as WaterFix—as its preferred approach. WaterFix focuses on the construction of a new water conveyance facility to improve water reliability and separates the large?scale Delta restoration effort originally included in the BDCP into a separate program called California EcoRestore. Water contractors of the State Water Project and the Central Valley Project, and the U.S. Bureau of Reclamation have primarily funded the project planning efforts that began with the BDCP and that have now shifted to WaterFix.

Key findings (from fact sheet): The costs and timeline of the planning phase increased significantly due to the scale and unexpected complexity of the project—as of June 2017, the planning phase cost had reached approximately $280 million.

• Although DWR used a robust selection process to select its first program manager, it later used other methods to select a replacement program manager.

» DWR directed its contractor to replace their program manager with a specific vendor without demonstrating that this new program manager was qualified to provide such services or had the required professional license. » DWR later awarded this new program manager its own contract without a competitive process, and the program manager has had to subcontract many of the program management functions for which DWR is generally paying a markup of 5 percent.

• DWR has not ensured that it is prepared for the transition of WaterFix to the design and construction phase.

» It has not completed either an economic or a financial analysis to demonstrate the financial viability of WaterFix. » It has not fully implemented a governance structure for the design and construction phase of the project. » It has not updated required program management documents for the planning phase yet WaterFix has evolved since it began.

For more information …

Click here for the report.

Click here for the summary.

Click here for the fact sheet.