Met Water District advances $1.1B capital plan amid board warnings over $4B deferred maintenance backlog

Met Water District advances $1.1B capital plan amid board warnings over $4B deferred maintenance backlogThe Southern California wholesaler's proposed two-year budget funds major drought mitigation and the Pure Water reuse project, but forces the deferral of hundreds of aging infrastructure projects due to funding constraints.

The $1.1 billion two-year capital plan includes $150 million for the design of the 45 MGD Pure Water Southern California project.

Budget ceilings forced staff to squeeze the 10-year project pipeline from $9.6 billion down to $5.7 billion, deferring over $3 billion in work.

Board members sharply criticized the deferred maintenance, warning against a "run to failure" approach for the nearly century-old system.

MWD is also bracing for a 50% share of an estimated $3 billion reimbursable capital fix for State Water Project subsidence, prompting a push for state and federal funding.

The Metropolitan Water District of Southern California (MWD) is weighing a $1.1 billion two-year Capital Investment Plan (CIP) that balances new supply investments against a mounting backlog of aging infrastructure. During a February 24, 2026, board workshop, staff detailed a capital strategy that advances major drought mitigation efforts but leaves billions in rehabilitation work unfunded. The proposed CIP includes roughly $500 million in spending for the first year and $600 million for the second. A major component is a $150 million carve-out for the Pure Water Southern California reuse project. The funding will cover final design and planning for a 45 million-gallon-per-day (MGD) first stage, with $92 million expected to be offset by grants. Staff noted that alternative delivery methods will be used, providing downstream off-ramps before a final construction decision is required around 2029. However, the capital plan's constraints drew significant concern from the board regarding existing assets. Capital Program Management Unit Manager Michael Thomas explained that the district's raw 10-year project pipeline totals approximately $9.6 billion. To meet budget ceilings—which currently assume a 7.5% baseline rate increase for each of the next two years—staff utilized software to prioritize and constrain the portfolio to $5.7 billion. This process squeezed the number of funded rehabilitation and replacement (R&R) projects from 558 down to 380, pushing roughly $3 billion to $4 billion of work outside the planning window. Multiple directors criticized the level of deferred maintenance on a system approaching its centennial. Director Dennis Erdman warned against adopting a "run to failure" philosophy, emphasizing that the district cannot afford catastrophic failures on critical infrastructure. Director Seckel echoed these concerns, noting that the agency is still digging out from prior years of underinvestment and urging a stronger focus on existing system reliability over advancing new projects. Adding to long-term capital pressures, the district is also facing significant external infrastructure costs. MWD expects to bear roughly half of an estimated $3 billion in reimbursable contractor costs to fix severe subsidence issues along the State Water Project, particularly the California Aqueduct and San Luis Canal. Driven largely by agricultural groundwater overdraft, the subsidence has reduced flow capacity in some sections by up to 60%, necessitating massive engineering fixes like raising concrete liners. Staff confirmed that while these costs are built into the 10-year forecast, the district will aggressively seek state and federal legislative appropriations, as well as reimbursement from the responsible parties in the Central Valley, noting that current groundwater regulations fund future prevention rather than past damage remediation.