The Authority also proceeded with construction in the Central Valley without completing agreements with utility companies or ensuring it had a full understanding of the magnitude of the utility infrastructure that it would need to relocate or how it would relocate those utilities. As a result, it could not properly budget for these costs. For example, the Authority originally expected to directly pay utility providers, such as PG&E and AT&T Inc., to relocate utilities for Project 1's planned sites before construction, and it set aside nearly $69 million for this work. However, the Authority later determined the utilities would not be able to complete the relocations in time to meet construction deadlines, and in June 2015, it reassigned the work to the construction contractor. In February 2017, the Authority estimated that completing all of this work for Project 1 would ultimately cost $216 million. However, in April 2018, it provided the board with another revised estimate, which projected that costs would rise to $396 million. Unlike delays in land acquisition, the Authority's poor estimates for utility work did not create costs where it might otherwise have had none. However, given that Project 1's original construction contract was for $970 million, we find it concerning that the Authority failed to anticipate what it now expects will be nearly $400 million in additional costs. Had it developed a better understanding of the costs related to relocating utilities before beginning construction, it might have explored ways of mitigating those costs.

Given that Project 1's original construction contract was for $970 million, we find it concerning that the Authority failed to anticipate what it now expects will be nearly $400 million in additional costs.