By Theresa Miller
$8.1 million is the loan amount the City is now requesting from the Orange County Water District (OCWD) for the Lampson Well project, an increase of $3.65 million.
In the Sun Newspapers May 14, 2026 article “City to borrow up to $8.1 for well project,” Public Works attributed the increase to “ongoing industry volatility.” However, the estimate used for the OCWD loan application and later relied upon in the City’s budgeting and financial planning was still largely based on a project estimate prepared in 2022.
Consider the timeline:
• March 2022: Pacific Advanced Civil Engineering (PACE) prepared the original project estimate at roughly $4.24 million.
• February 2025: Nearly three years later, OCWD approved the loan application signed by the Public Works Director and a PACE registered engineer using a revised estimate of $4.45 million, only slightly higher (5%) than the original March 2022 estimate.
• June 2025: The City’s Water and Wastewater Financial Plan and Rate Study and FY 2025-26 Proposed Budget both relied on the same $4.45 million estimate. When the project went out to bid, the engineer’s estimate was $4.35 million, excluding owner-furnished control panels, yet the bids ranged from $5.4 million to $9.4 million.
• September 2025: The City Council rejected all bids and directed staff to re-evaluate the project parameters, including cost impacts, prior to rebidding.
• March 2026: The project went out to bid a second time and the contract was awarded for $6,677,200. The City is now requesting the OCWD loan amount be increased to $8.1 million.
Now compare the original $4.45 million OCWD loan request to the current $8.1 million loan amount:
• Base construction (including pressure vessels): approximately $4,010,000 vs. $6,677,200; increase: $2,667,200 (67%)
• Contingency: approximately $291,000 vs. $720,000; increase: $429,000 (147%)
• Supplemental construction support services: $150,000 vs. $670,000; increase: $520,000 (347%)
The $2,667,200 increase in base construction costs was largely due to 2026 pricing. However, the original estimate did not include roughly $949,000 in additional contingency and supplemental construction support costs, including engineering, construction management, and right-of-way inspection costs. Together, these factors show the $3.65 million increase in the loan amount was more than just “industry volatility,” especially since the estimate used for the OCWD loan application was only 5% higher than the 2022 estimate.
Increasing the loan amount will also increase the interest paid by ratepayers. This also raises questions about whether other Water and Sewer CIP project estimates are being updated before they are used in the City’s budgets, financial planning, rate studies, and future loan applications. Given the magnitude of the increase, the City Council should consider directing staff to review how the project estimates were developed, updated, and used throughout the loan application, budgeting, and financial planning process so similar problems can be avoided on future CIP projects.
Theresa Miller is a Seal Beach resident.
