IEUA adopts $1.77B capital plan, shifts strategy to address execution bottlenecks

IEUA adopts $1.77B capital plan, shifts strategy to address execution bottlenecksThe California utility is reevaluating its project delivery pipeline after historical execution rates fell short, prompting strategic deferrals and an $89.2 million reduction in planned new debt.

The IEUA board adopted a $1.77 billion Ten-Year Capital Improvement Plan for FY 2026/27 through FY 2035/36, featuring $1.62 billion for 145 capital projects.

Historical capital execution rates have hovered between 55% and 68%, prompting the agency to strategically defer certain projects to align with internal engineering capacity.

The board approved a mid-year budget amendment that eliminates $89.2 million in proposed new debt, opting instead to utilize existing capital capacity reimbursement accounts.

Major upcoming investments include the $231.5 million Advanced Water Purification Facility and the $160 million RP-1 Thickening Building & Acid Phase Digesters.

The Inland Empire Utilities Agency (IEUA) Board of Directors adopted a $1.77 billion Ten-Year Capital Improvement Plan (TYCIP) at its June 17, 2026, meeting in Chino, California, while acknowledging the need to correct historical shortfalls in project execution. The sweeping infrastructure roadmap, which covers Fiscal Year 2026/27 through FY 2035/36, designates $1.62 billion for 145 capital projects and $148.2 million for 95 non-capital projects. More than half of the capital spending (56%) is allocated to the Regional Wastewater Capital Improvement Program. Despite the ambitious financial targets, agency staff highlighted a persistent gap between budgeted capital plans and actual project delivery. Manager of Asset Management Travis Sprague noted that over the past decade, actual execution rates have ranged from 55% to 68% of the projected budgets. "There is a clear need for improvement of our forecasting methods," Sprague told the board, attributing the execution gap to unspent contingencies and shifts in scope and schedules as projects enter construction. General Manager Kevin Alexander addressed the board's concerns over the backlog, noting that the agency currently has more planned work than its internal engineering staff can handle. To balance the workload and mitigate risks, IEUA plans to adjust its delivery pipeline. "We are going to be deferring some of the projects... because we physically can't do it unless we bring outside resources to do that," Alexander said. "We've got to pay attention to staffing, the amount of work we're asking them to do." The TYCIP outlines several massive infrastructure investments, including a $231.5 million Advanced Water Purification Facility and a $160 million project for the RP-1 Thickening Building and Acid Phase Digesters. The plan also accounts for ongoing delays at the RP-5 Expansion project, which recently incurred an 808-day construction delay. To bridge the gap for the RP-5 delays, the board separately approved a $4.7 million contract amendment for Parsons Water & Infrastructure Inc. to provide extended engineering services during construction. In a parallel move to optimize the agency's financial position, the board approved a mid-year budget amendment for FY 2026/27 that eliminates $89.2 million in proposed new debt. Instead of borrowing, regional wastewater projects will be funded through capital calls from the Capital Capacity Reimbursement Accounts held by customer agencies. Acting Treasurer Paula Hooven noted the strategic shift was made in direct response to feedback from member agencies, including the City of Chino, and will help keep rates lower across the region.