South Coast Water District pulls $570k Doheny Desal amendment amid board revolt over risk

South Coast Water District pulls $570k Doheny Desal amendment amid board revolt over riskDirectors at the South Coast Water District withdrew a proposed $570,000 contract amendment for the Doheny Ocean Desalination Project's progressive design-build team, citing mounting financial risks and a lack of commitment from partner agencies.

The board pulled a $570,000 amendment for the Filanc-Acciona Desal Partners Joint Venture, questioning why the proposed pre-procurement and design work was not included in the original $6.8 million Phase 1 task order.

Directors expressed deep concern that the district is fronting costs from its own reserves while partner agencies decline to take additional funding requests to their boards before Phase 2.

The board reluctantly approved a separate $298,849 amendment for owner's engineer GHD to continue permitting and technical support through November 2026.

The district also awarded a $5.1 million contract for the Del Obispo Recycled Water Expansion Project and a $1.2 million contract for the Pump Station 6 Improvements Project.

The South Coast Water District (SCWD) Board of Directors abruptly pulled a $570,000 contract amendment for the Doheny Ocean Desalination Project on July 9, following intense pushback from directors over escalating Phase 1 costs and the shifting of financial risk onto the district. The amendment was intended to fund additional design and pre-procurement services by the Filanc-Acciona Desal Partners Joint Venture, the project's progressive design-build-operate-maintain (PDBOM) contractor. Staff argued the advance work would allow for immediate procurement of time-sensitive materials for slant well and microtunneling construction, potentially generating $3 million in net project savings. However, board members forcefully questioned the scope of the amendment, arguing that the tasks—including value engineering implementation and permitting updates—should have been covered under the joint venture's original $6.8 million 60% design contract. "I don't feel like there's a real partnership between Filanc and Acciona and the water district," one director stated. "I feel like they're coming back here and asking us for a lot of adders for things they should have already been doing... Feels like they're getting all the benefit and we're taking all the risk." The board's frustration was compounded by the financial positioning of the project's partner agencies, Eastern Municipal Water District and Laguna Beach County Water District. Staff disclosed that the partner agencies had contributed their initial $2.65 million shares but preferred not to return to their respective boards for additional Phase 1 funding. As a result, SCWD has been forced to cover cost overruns from its own reserves, with the expectation that the funds will be rolled into the final project financing if the partners agree to proceed with Phase 2 construction. "We don't know that this project's going forward because we don't know what our partners are going to say about it," a director warned. "If we lose a partner, we could be in deep trouble on this thing." Acknowledging errors in the staff report's scope description and the board's unified resistance, staff withdrew the Filanc-Acciona amendment, noting it would be revised and brought back at a later date. Earlier in the meeting, the board reluctantly approved a separate $298,849 amendment to Task Order 20 with GHD, the district's owner's engineer. The funds will carry GHD's technical support, contract negotiation, and permitting services through November 2026, when the Phase 2 contract award is anticipated. In other business, the board approved two construction contracts: a $5.1 million award to CHI Construction for the Del Obispo Recycled Water Expansion Project, and a $1.2 million award to Cora Constructors for the Pump Station 6 Improvements Project. In both cases, the lowest bidders were rejected due to a lack of specific pipeline and pump station experience.