The Delta Conveyance Design and Construction Authority (DCA) is a Joint Powers Authority created in 2018 by Metropolitan Water District, Santa Clara Valley Water District, Kern County Water Agency, and the State Water Contractors. The DCA was delegated the powers of the Department of Water Resources to design and construct the WaterFix / twin tunnels project.
In January of 2019, the DCA signed a $93 million contract with Jacobs Engineering for engineering design services for the WaterFix project and a $75 million contract with Fugro for geotechnical services. In April, the DCA signed a contract for $40 million with Parsons Transportation Group for a Project Management Information System, cost and schedule controls, and program reporting. But at the direction of Governor Newsom, all WaterFix project approvals were rescinded on May 2, 2019. Work has nevertheless continued under the engineering contracts.
The continuing engineering work is being financed under a June 2019 amendment to the WaterFix Joint Exercise of Powers Agreement (JEPA,) The amendment allows DWR to authorize and pay for design work on a single tunnel project, retroactive to May 2019. The budget in the JEPA amendment (shown below) states that the DCA is planning to spend over $100 million for each of fiscal years 2019-2020, 2020-2021, and 2021-2022.
The DCA appears to be attempting to continue the original WaterFix engineering design schedule as much as possible, given the new direction on the project. The WaterFix project engineering design was originally scheduled to be completed in 2022.
But how is the engineering work on the single tunnel being paid for, given that all project approvals were rescinded? The meeting materials for the July 2019 Design and Construction Authority Board meeting show no current funding commitments. The cash flow projections (shown below) show the DCA is relying on a $19.7 million loan from DWR for expenses for the next few months. Future cash flow relies on yet-to-be-made commitments by State Water Project contractors starting in September 2019. A footnote below the graph states that the majority of State Water Project contractors are “anticipated” to “seek and receive funding approval from their respective Boards between November 2019 and February 2020.”
The DCA is also signing a $10 million lease for office space at 980 9th Street. According to the July meeting packet, the DCA Director is seeking authorization for a letter of credit from a bank that the landlord could draw on as necessary “if the DCA defaults on the lease.”
Well, in theory public agencies and employees cannot do what they are not authorized to do, and private companies and persons are as responsible as the public employee to see that contracting rules are followed. The bigger and more sophisticated the private party, the more likely this would be enforced.