1 WD-2825R Alameda Creek
Recapture Project
Recommendation to Terminate
Contract for Convenience
April 11, 2023
Operated by the San Francisco Public Utilities Commission 2 Project Goals & Objectives
Recapture future in-stream flow releases from Calaveras Reservoir and Alameda Creek Diversion Dam required
under the Calaveras Dam Replacement Project permits.
• Annual average recapture objective: 6,856 acre-feet (AF) (range: 4,045 – 8,031 AF)
• Minimize impacts on water supply during drought, system maintenance, and in the event of water supply problems or transmission disruptions in the Hetch Hetchy system.
• Maximize local watershed supplies.
• Maximize the use of our existing facilities and infrastructure. • Provide flow to the Sunol Valley WTP to meet its minimum operating requirements.
3 Project Site – Quarry Pond F2
Project Location: Sunol, CA
4 Project Scope
• Four floating barges with vertical turbine pumps and mooring systems;
• Four 16-inch diameter flexible discharge pipelines connecting pumps to pipe manifold on the shore;
• 36-inch diameter welded steel pipeline connecting to existing Sunol Pump Pipeline;
• Electrical control building;
• Associated valves, instruments,
electrical and communication systems;
• Paving and site restoration.
Existing Site Conditions (Slope
Erosion)
5 New Pipe Alignment
New Pipe Alignment
Access Road
Access Road
Status
• Geotechnical Investigations (2011-2022)
• Quarry leaseholder obligations and actions
• Construction Notice to Proceed – June 2021
• Ongoing erosion near new facilities
• Redesign and Change Orders ongoing,
will exceed 50% initial contract value
• Concern about operating and maintenance O&M complexity
6 Recommend Termination for
Convenience
• Request approval of General Manager’s determination
that it is in the City’s best interest to terminate for convenience Contract No. WD-2825R with Anvil Builders,
Inc., and
• Request authorization to negotiate close-out terms and final payment to contractor.
• Provides time to perform:
• Long-term slope stabilization in coordination with quarry leaseholder;
• Revisit design to better assure operations and maintenance are sustainable and manageable;
• Perform project construction with stabilized conditions and improved design.
7 Questions
8 DEPARTMENT Infrastructure Division AGENDA NO. 11
MEETING DATE Apr il 11, 2023
APPROVAL:
COMMISSION
SECRETARY Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Terminate for Convenience: Regular Calendar
Project Manager: Bryan Dessaure
Terminate for Convenience Contract No. WD-2825R, Alameda Creek Recapture Project Summary of
Proposed
Commission Action:
Approve the General Manager’s determination that it is in the City’s best interest to terminate for convenience Contract No. WD -2825R, Alameda Creek Recapture Project with Anvil Builders, Inc.; and authorize the General Manager to negotiate closeout terms and final payment to the contractor in accordance with the terms of the contract.
Background: The Alameda Creek Recapture Project (Project) provides for the San Francisco Public Utilities Commission (SFPUC) to construct facilities to recapture water that the SFPUC r eleases from Calaveras Reservoir , which bypass es the Alameda Creek Diversion Dam (ACDD) in order to comply with federal and state environmental regulatory permits. The instream flow releases help protect the Central California Coast Steelhead species, which is designated as threatened under the Federal Endangered Species Act, in the creeks below the ACDD and Calaveras Dam. The project is designed to recapture water from the Alameda Watershed historical contribution to the SFPUC Regional Water System in accordance with the City and County of San Francisco’s existing water rights.
The Project is one of two final project s that SFPUC is constructing under the Water System Improvement Program , and the SFPUC reports its progress annually to the State.
The p
roject-specific objectives are as follows:
• Recapture the water that would have otherwise been stored in Calaveras Reservoir that is released from Calaveras Dam and/or that bypasses the ACDD to meet instream flow requirements, thereby maintaining the historical annual transfers from the Alameda Watershed system to the SFPUC Regional Water System.
• Minimize impacts on water supply during drought, sys tem maintenance, and in the event of water supply problems or transmission disruptions in the Hetch Hetchy System.
Contract: WD-2825R Alameda Creek Recapture
Commission Meeting Date: April 11, 2023
• Maximize local watershed supplies.
• Maximize the use of existing SFPUC facilities and infrastructure.
The scope of work for the Project , located in and around Pond F2 in the Sunol Valley, includes the construction of floating barges and pumping systems, mooring systems, pipelines, a valve vault and an electrical control building with the objective to pump water from Pond F2 in the Sunol Valley to San Antonio Reservoir and/or the Sunol Valley Water Treatment Plant (SVWTP).
Pond F2, currently leased by a quarry operator to assist in mining activities, is one of the pond designations used in the Sunol Valley Resource Management Element of the Alameda Creek Watershed Management Plan adopted by the Commission in 2000.
On April 13, 2021, by Resolution No. 21-0058, the Commission award ed Contract No. WD-2825R, Alameda Creek Recapture Project to Anvil Builders, Inc. (Anvil). The original contract amount was $ 19,511,500, and the original contract duration was 547 consecutive calendar days.
The attached memorandum provides Staff’s recommendation that it is in the City’s best interest to terminate the Contract. The primary reasons for the recommendation set forth in the memorandum include: ( 1) conditions and circumstances related to slope and bank stabilization at the site have evolved since the project was designed ; (2) Staff anticipates that c onstruction change orders for unforeseen conditions will exceed 50% of the current contract value with significant remaining risk for additional costs , and; (3) the facility will be the first of its kind in the Regional Water System and, recently, Water Enterprise staff responsible for operation, maintenance and repair have raised concerns about maintaining the facility due to design changes and continuing erosion.
The contract termination will provide time to coordinate with the quarry operator and site leaseholder, Mission Valley Rock, to perform repairs to on- going slope and bank erosion around the quarry pond, to reassess the long - term geotechnical conditions , and to perform design improvements to assure this first of its kind facility in the Regional Water System can be readily operated and maintained once constructed.
As indicated in the attached memorandum, pursuant to Subsection 6.22(l) of the Admi nistrative Code and in accordanc e with Paragraph 14.03 of the Contract’s General Conditions, section 00 72 00, Staff recommends that is in the City’s best interest to t erminate for convenience Contract WD -2825R Alameda Creek Recapture Project.
Description of Scope
of Work:
The contract work is located in Sunol, California. The contract work consists of furnishing and installing:
• Four 400- horsepower vertical turbine pumps on floating barges with mooring systems;
• 16-inch-diameter high density polyethylene (HDPE) flexible discharge pipelines extending from each vertical turbine pump to a new pipe Contract: WD-2825R Alameda Creek Recapture
Commission Meeting Date: April 11, 2023
manifold;
• 100-foot-long, 36-inch-diameter welded steel pipeline; • Throttling valves;
• Underground valve vault;
• Flow meter;
• Electrical control building;
• Electrical transformer;
• Electrical, communication and HVAC systems; and
• Paving and site restoration.
Anvil is performing contract work for the Alameda Creek Recapture Project under construction contract WD -2825R; the contract work is approximately 23% complete as of the end of January 2023. (Percent complete is based on expenditures to date and the original contract amount plus approved change orders to date.)
Changes and
Modifications to the
Contract:
Modification Nos. 1 to 7 increased the contract amount by $407,362 (within original contingency) to implement various changes related to differing site conditions, including exploratory work on the existing Sunol Pump Pipeline to locate a suitable connection point for facility effluent pipe due to existing pipe corrosion, valve vault revisions, increase in quantity of pipe demolition material, and site entrance safety improvements including paving and permitting, for a total contract amount of $ 19,918,862, with no change to the contract duration.
On September 13, 2022, by Resolution No. 22- 0154, the Commission approved an increase of $2,600,000 to the existing contract cost contingency and an increase of 252 calendar days to the contract duration contingency for a total contract amount of up to $24,062,650, and a total contract duration of up to 853 consecutive calendar days.
Modification Nos. 8 to 14 inc
reased the contract amount by $1,756,992 (in
accordance with Resolution 22-0154) and increased the contract duration by 152 cons ecutive calendar days (in accordance with Resolution 22-0154) to implement changes to the mooring analysis, programable logic controller, procurement for long lead flexible hoses and HDPE appurtenances, and time extension due to changes in encroachment permit, for a total contract amount of $21,675,854 and a total contract duration of 699 consecutive calendar days.
Environmental
Review:
On April 16, 2020, the Planning Commission by Motion No. 20684 certified a Final Environmental Impact Report (FEIR) for Project No. CUW35201, Alameda Creek Recapture Project (Case No. 2015-004827ENV). The FEIR can be found here:
https://sfpuc.sharefile.com/d-sc 0ccca3d7c764defa7888118a9eb6f33 This contract termination includes restoring disturbed areas to their preconstruction conditions. This work is within the scope of the project authorized under the FEIR.
Contract: WD-2825R Alameda Creek Recapture
Commission Meeting Date: April 11, 2023
Budget & Costs: Funding: Project No. 10015281, Alameda Creek Recapture Project; 10015072, Pipeline Inspection and Repair
Original Award Amount: $19,511,500
Original 10% Cost Contingency: $1,951,150
Approved Increase to Cost Contingency: $2,600,000
Total Revised Contract Cost Limit: $24,062,650
Final Contract Amount: To be determined during closeout
Schedule: Notice-to-Proceed Date: June 21, 2021
Original Contract Duration: 547 consecutive calendar days Original 10% Duration Contingency: 54 calendar days
Approved Increase to Duration Contingency: 252 calendar days Total Revised Contract Duration Limit: To be determined during closeout
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachments: SFPUC Memorandum: Recommendation to Terminate for Convenience
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) needs to construct facilities to recapture water that the SFPUC must release from Calaveras Reservoir that bypasses the Alameda Creek Diversion Dam to comply with federal and state environmental regulatory permits; and
WHEREAS, On April 13, 2021, by Resolution No. 21-0058, the Commission awarded Contract No. WD-2825R, Alameda Creek Recapture Project to Anvil Builders, Inc.; and WHEREAS, The original contract amount was for $19,511,500 and the original contract duration was 547 consecutive calendar days; and
WHEREAS, The construction contract Notice-to-Proceed date was June 21, 2021; and WHEREAS, On September 13, 2022, by Resolution No. 22- 0154, the Commission approved an increase of $2,600,000 to the contract cost contingency for a total contract amount limit of up to $24,062,650, and approved an increase of 252 calendar days to the contract duration contingency for a total duration limit of up to 853 consecutive calendar days; and WHEREAS, Pursuant to Section 6.22(1) of the San Franc isco Administrative Code, the SFPUC may terminate the performance of wo rk under a public works contract for the City’s convenience when the General Manager determines, with the approval of the Commission, that such determination is in the best interest of the City; and WHEREAS, The General Manager has determined t hat it is in the City’s best interest to terminate for convenience Contract WD-2825R in order to coordinate with Mission Valley Rock on its repairs to on-going slope and bank erosion around the quarry pond, to reassess long-term geotechnical conditions at the project site , and to perform design improvements to assure this first of its kind facility in the Regional Water System can be readily operated and maintained once constructed, for the reasons set forth in the Staff’s memorandum dated March 17, 2023, a copy of which is attached hereto; and
WHEREAS, On April 16, 2020, the Planning Commission by Motion No. 20684 certified a Final Environmental Impact Report (FEIR) for Project No. CUW35201, Alameda Creek Recapture Project (Case No. 2015-004827ENV); and this contract termination includes restoring disturbed areas to their preconstruction conditions; and this work is within the scope of the project authorized under the FEIR; now, therefore, be it RESOLVED, That this Commission hereby approves the General Manager ’s determination to terminate for convenience contract WD-2825R with Anvil Builders, Inc. for the Alameda Creek Recapture Project because termination for convenience is in the City’s best interest and authorizes the General Manager to negotiate closeout terms and final payment to the contractor in accordance with the terms of the contract.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of April 11, 2023.
Secretary, Public Utilities Commission
OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
MEMORANDUM
DATE: March 17, 2023
TO: Stephen Robinson, Assistant General Manager – Infrastructure Steve R. Ritchie, Assistant General Manager – Water
FROM: Katie Miller, Director Water Capital Programs – Infrastructure SUBJECT: Contract WD-2825R: Alameda Creek Recapture Project Recommendation to Terminate for Convenience
Staff recommends termination for convenience of Contract No. WD-2825R with Anvil Builders in accordance with San Francisco Administrative Code Chapter 6, Article II, Section 6.22(l), and Contract No. WD-2825R, Alameda Creek Recapture Project, General Conditions (Section 00 72 00, Article 14.03).
Background
Contract No. WD-2825R, Alameda Creek Recapture Project (Project), provides for construction of a new facility designed to seasonally recapture a portion of the water released from Calaveras Reservoir; the water releases are required for compliance with fishery-related regulatory permits for the construction of the new Calaveras Dam and the operation of Calaveras Reservoir. The Project is designed to return the recaptured water to the SFPUC Regional Water System under the SFPUC’s existing pre-1914 appropriative water rights for Calaveras Dam and the Alameda Creek Diversion Dam.
The Project’s design objective is to recapture water that is released from storage in Calaveras Reservoir and/or bypassed around the Alameda Creek Diversion Dam (which diverts water to storage in Calaveras Reservoir) and return it to the SFPUC’s water system through existing and new facilities in the Sunol Valley. A portion of the water that is released or bypassed upstream flows underground beneath Alameda Creek in Sunol Valley, entering quarry pits excavated on land that the SFPUC leases to two mining operators. The scope of work for the Project includes the construction of floating barges and pumping systems, mooring systems, pipelines, a valve vault and an electrical control building with the objective to pump water from Pond F2 in the Sunol Valley to San Antonio Reservoir and/or the Sunol Valley Water Treatment Plant (SVWTP). Pond F2 is one of the pond designations used in the Sunol Valley Resource Management Element of the Alameda Creek Watershed Management Plan adopted by the Commission in 2000.
SFPUC initiated the Project in 2003 during the early planning stage of the Calaveras Dam Replacement Project. The Project underwent years of significant planning; SFPUC selected the current Project alternative in the Alternatives Analysis Report in 2009 as further detailed in the Conceptual Engineering Report
Contract WD-2825R: Alameda Creek Recapture Project
Recommendation to Terminate for Convenience
March 17, 2023
in 2014. Pumping water from Pond F2 was selected in part because this alternative avoided construction of diversion facilities within the Alameda Creek channel and associated environmental impacts. Environmental analysis required another six years, with full environmental approval in 2020. The longer than normal six-year environmental review process can be attributed to comments related to water supply and fishery impacts by the Alameda County Water District, a SFPUC wholesale water customer downstream that diverts water from Alameda Creek into quarry ponds in Fremont for purposes of groundwater recharge.
Between 2011 and 2014, to inform the planning phase, T&R/RYCG Joint Venture completed three geotechnical evaluation reports. T&R/RYCG and AECOM completed three additional geotechnical reports between 2017 and 2022 to inform construction activities and assess existing erosion conditions around Pond F2.
These reports generally concluded that erosion may continue if not repaired, and they recommended erosion repairs; however, they did not conclude that the project could not be built under existing geotechnical conditions.
The project site is currently leased to Mission Valley Rock Co. (MVR) under the auspices of Surface Mining Permit (SMP)-24, which the Alameda County Community Development Agency issued pursuant to authority delegated under the State Surface Mining and Reclamation Act. MVR uses Pond F2 to provide water management for mining extraction activities at a different leased site, SMP- 32, just north of the project site, as well as sand and gravel processing across Alameda Creek. MVR holds a lease agreement with the City and County of San Francisco (CCSF) to mine SMP-32 until 2040. Upon completion of mining activities at SMP-32, the lease requires MVR to complete remediation work under the reclamation plan for SMP-24 and SMP-32 that has been approved and adopted by Alameda County with concurrence of CCSF as the landowner. The surface mining permit, which is incorporated into the lease, requires MVR to complete reclamation work by the time the lease expires in 2040. The project site, SMP-24, currently has very steep slopes that are not in compliance with the reclamation plan, which requires slopes generally at 1.5/1 vertical-to-horizontal (vH). In 2017, large areas of the bank and slope eroded, potentially compromising construction at the location of Project facilities. Under the lease, MVR is required to repair damage to the site.
In the past five years, during conversations between SFPUC and MVR about the emerging erosion, MVR suggested it would consider addressing reclamation requirements at SMP-24 in lieu of site-specific erosion repairs even though associated mining activities will continue until 2040. MVR also began conversations with Alameda County to revise its reclamation plan. During the process of considering a revised reclamation plan, Martin Marietta (dba MVR) purchased MVR. Under the new ownership, conversations with the SFPUC have accelerated, and the SFPUC is currently reviewing a concept for a revised reclamation plan that MVR is considering implementing if approved by SFPUC and Alameda County.
Contract WD-2825R: Alameda Creek Recapture Project
Recommendation to Terminate for Convenience
March 17, 2023
Contract Status
Following environmental approval in 2020, SFPUC advertised Contract No. WD- 2825R (Contract) for construction and awarded the Contract to Anvil Builders (Contractor) with a Contract value of $19,511,000. SFPUC issued Notice to Proceed (NTP) on June 21, 2021. Subsequently, the Contractor has invoiced $5.1M to date, and the SFPUC has issued 24 change orders in the amount of $2.16M. Currently, Staff forecasts that the Contract’s risk trends and recent cost estimates for requested changes to the Contract are likely to result in another approximately $8M in near-term change orders.
There are several reasons for the growing number of change orders and risk trends. First, the bank erosion observed in 2017 has significantly worsened at the location where Project plans show the flexible pump station pipelines connecting to a new pipeline manifold on the shore. The Contractor advised the SFPUC to review whether the approved design can accommodate existing and deteriorating conditions. The SFPUC and its design consultant, in order to provide additional pipeline flexibility, issued a design change order to provide more flexible braided steel pipeline segments; this revised design has a higher materials and installation cost than in the construction bid. Second, the Contractor discovered that the existing pipeline, from the new pump station pipeline manifold to the water system connection, has significant corrosion that requires repair. Third, sites for potential access roads have experienced significant erosion and need to be repaired or relocated for construction and long-term maintenance access. Finally, delays due to the unforeseen conditions, investigations, and design changes have extended the construction contract duration, resulting in additional administrative costs.
Considerations
Three issues factor into Staff’s recommendation to terminate this contract for convenience.
1. Site conditions and circumstances related to slope and bank stabilization at the site have evolved since the project was designed. In December 2020, SFPUC decided to initiate Project construction prior to either repair of site- specific erosion or stabilization work by the quarry operator due to uncertainty over the quarry operator’s timing to perform the work. However, now that the stabilization work may be imminent, it is prudent to delay the facility construction until this work has been completed. Furthermore, in light of the continuing erosion from recent storms, it is prudent to perform additional geotechnical work to recommend long-term stabilization improvements (such as for access roads) that may go beyond the requirements of the reclamation plan. Once MVR has obtained Alameda County’s approval to modify the slopes of Pond F2 at its own expense (in accordance with state law and the original reclamation plan approved by Alameda County and the SFPUC), and the SFPUC has performed its own geotechnical evaluation for any recommended additional long-term erosion mitigation plans, the SFPUC will be in a better position to award a new construction contract that will comprehensively address conditions necessary to achieve SFPUC’s goals Contract WD-2825R: Alameda Creek Recapture Project
Recommendation to Terminate for Convenience
March 17, 2023
and objectives for recovery of water released or bypassed from upstream facilities.
2. Staff anticipates construction change orders will exceed 50% of the current contract value with significant remaining risk for additional costs. Staff anticipates that change orders and contract risk due both to the site erosion since the initial geotechnical investigations and to unforeseen corrosion of the existing pipeline will cost at least $10M, requiring additional investigation and subsequent redesign of the new pipelines, connection to and repair of the existing Sunol Pump Pipeline, and relocation and improvements to the access road to the pond. With the unknown long-term geotechnical conditions, in addition to the complexity of the design changes, it will likely be more cost effective to terminate the current Contract and procure a new construction contract after design changes have been thoroughly vetted and reviewed for cost efficiencies, constructability, and long-term operability and maintenance of the facility, rather than implementing this work through change orders to the existing Contract.
3. The facility will be the first of its kind in the Regional Water System. Water Enterprise Staff responsible for maintenance and repair have raised concerns about maintaining the facility with the design changes and continuing erosion.
Even though the Water Enterprise accepted the Project’s components throughout the Project’s development, staff who will be responsible for maintaining and operating the facility have raised new concerns about the potential maintenance complexity. Accordingly, Staff recommends performing additional evaluations to investigate project improvements to provide greater assurance that operations and maintenance can be performed reliably, predictably, and with adequate resources.
Recommendation
Staff has concluded that it is more prudent to terminate this Contract now than to continue the construction with high risks of additional costs and unforeseen conditions, especially as new questions have arisen about the maintenance requirements for the facility. Staff will diligently continue efforts to complete the project as revised. Staff proposes to: (1) terminate the existing Contract for convenience; (2) reevaluate the project objectives and design taking into consideration long-term slope stability and maintenance requirements; (3) revise the Project design; and (4) procure a new contract after the pond banks are stabilized. While this will delay the planned operation of the facility, Staff estimates that the decision will reduce overall costs and result in a more reliable and maintainable asset.
Approved: _______________________
Stephen Robinson
Approved: _______________________
Steve R. Ritchie