Adding $39.5 million to Lake Mead project worries water authority board member

With the largest change order in agency history, the Southern Nevada Water Authority has bought itself some risk-free time to get its troubled third intake project back on track.

But one water authority board member worries that the massive construction job at Lake Mead could see its cost spiral out of control.

Clark County Commissioner Steve Sisolak said he cast the lone vote against the almost $40 million change order because of its "sheer magnitude" and his growing skepticism about the project's overall budget.

"I'm not comfortable moving forward blindly with no idea what the final cost will be," he said. "It's just an enormous risk to take when you're spending someone else's money and, ultimately, the ratepayers will pay the bill."

Sisolak's fellow board members voted Friday to add $39.5 million to the project's roughly $700 million budget.

The increase will help pay for changes in the project's design and for the damage and delay caused by several floods at the work site 600 feet underground.

In exchange for the money, the project's designer and general contractor, Vegas Tunnel Constructors, has agreed to accept all liability for any additional problems between now and when the next phase of the project begins in nine months or so.

That's when the contractor is expected to start drilling a 3-mile-long, 23-foot-diameter shaft beneath the bed of Lake Mead using a tunnel boring machine that stretches the length of two football fields and weighs more than three Boeing 747 jetliners.

Authority spokesman Scott Huntley said the change order guarantees that the agency will be liability free until the machine is "in, assembled, operational and when they push the button to actually begin boring."

What concerns Sisolak is that the authority just approved a change order approaching 10 percent of Vegas Tunnel Constructors' total contract, and only about one-third of the work has been completed.

The contractor has abandoned the flood-prone portion of the work site, and is now excavating a new underground assembly area and starter tunnel for the boring machine.

The project's overall completion date has slipped from early 2013 to sometime in 2014.

Sisolak said the third intake is starting to remind him of Boston's Big Dig, the expensive and trouble-plagued transportation project now synonymous with budget-busting mismanagement.

That network of tunnels, ramps and bridges took 16 years to complete and wound up costing more than $14.6 billion, up from an original estimate of $2.8 billion in 1985.

Roughly 90 percent of the Las Vegas Valley's drinking water is drawn from Lake Mead through two existing intake pipes. The so-called third straw will draw from deeper in the reservoir, allowing the flow to continue even if the lake level drops far enough to shut down one of the upper intakes.

Henderson City Councilman Steve Kirk was on the water authority board when the project was approved in 2005, and he voted in favor of the change order last week.

"I don't think we really have any choice," he said. "We have to do what's in the best interests of our constituents. We can't allow them to go without water. That just can't happen."

Huntley said this change order is the largest ever approved by the water authority in terms of "pure dollars," but not by percentage. During construction of the River Mountains Water Treatment Facility in 2000, authority officials decided to expand the design to allow for future expansion of the plant. That change order totaled $31.3 million, or 21 percent of the project's total cost of $146.6 million.

Kirk said he doesn't like the idea of massive cost overruns any more than Sisolak does, especially for a project that might not even be needed right away should the drought suddenly lift and Lake Mead recover.

But that's a gamble the board simply can't afford to take, and neither can the community, Kirk said.

"What's the price tag of running out of water? We can't just sit on our hands and hope the drought doesn't happen or it doesn't get worse," he said.

Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.