ESCONDIDO — Earlier this month, the Escondido City Council approved taking out a federal loan to help partially fund the city’s $133 million Lake Wohlford Dam replacement project.
The council approved a $66 million loan from the Water Infrastructure Finance and Innovation Act (WIFIA) federal loan program at its May 11 meeting.
In addition to the federal loan, the city will use $15 million from California’s Proposition 1E Grant, which is used for flood management, and another $52 million from the city’s water fund capital improvements reserve to help replace the 127-year-old dam.
Staff has estimated the project’s overall cost sits around nearly $133 million, but Angela Morrow, deputy director of utilities, construction and engineering, pointed out that the estimate is conservative and has the potential to be lower.
“Extra contingencies have been added to the total project cost to accommodate for unforeseen conditions during construction,” Morrow said.
The WIFIA loan will have a 2.72% interest rate with annual payments of $3 million beginning once construction is complete sometime in mid-2027. The city anticipates the loan’s total 35-year lifetime cost to be $107.9 million, however Morrow explained that could be lower if the city makes prepayments during construction at a lower interest rate.
Christopher McKinney, deputy city manager and director of utilities, noted his concerns about the uncertainty regarding the dam’s bedrock conditions, noting costs will be on the lower end as long as the bedrock is sound and doesn’t require additional excavating.
“Our staff and consultants have done their very best to assess the condition of the bedrock under the dam, but often the issue is we never know until we start digging,” McKinney said.
However, Councilmember Mike Morasco pointed out that the project’s cost has gone up by four times its original amount of $33 million when it was first proposed years ago.
Lake Wohlford Dam was first built in 1895 with earth and rockfill, standing 76 feet tall. Thirty years later, a hydraulic fill process helped raised dam’s height by 24 feet.
But in 2007, experts learned the dam’s hydraulic fill section had the potential to liquefy in an earthquake with a magnitude greater than 7.5, prompting state and federal regulators to mandate the dam’s height be lowered back down to 76 feet.
A replacement for the dam has been designed and already reviewed by state and federal regulators, according to city staff. The replacement would restore the lake to its pre-2007 capacity and would be built to current seismic standards.