SFPUC Commission Meeting
January 14, 2025
Approve Modification No. 17 Decreasing the
Contract Amount and Approve an Increase to
Cost Contingency for Contract HH-1000R
Mountain Tunnel Improvements Project
Presented by: Randy Anderson, PM
2 Mountain Tunnel Overview - Location
Project Scope and Contract Work
to be Removed
Siphon
Extension
Early Intake Adit
Second Garrote
Flow Control
Facility and
New Priest
Adit
Tunnel Repairs &
Contact Grouting
Invert Paving
Roadway
Improvements
19-Mile-Long Mountain Tunnel
RED = HH-1000R Contract scope to be removed; to be completed in a future contract
South Fork Shaft and
Siphon Extension
➢ South Fork Siphon Improvements
o 100-foot x 17-foot diam. deep shaft
o 750-foot bypass tunnel (siphon extension)
o Roadway and Slope Improvements
4 Safety concerns due to access road
and shaft location
Area for Improvement
Adit 5/6 and 8/9 Roadway
Improvements
5 Constructability challenges with
the gabion walls (approximately
one mile of walls)
HH-1000R Contract Modification No. 17
• South Fork Siphon Extension and South Fork Access Road:
$8,325,088
• Adit 5/6 and 8/9 Roadway Improvements: $6,975,350
• Concrete Invert Paving inside Tunnel: $410,000
• Second Garrote Roadway Improvements: $16,645
Modification No. 17: ($15,727,083)
• Original Award Amount: $138,973,189
• Modifications Nos. 1 through 16: $9,630,106
• Requested Modification No.17: ($15,727,083)
• Proposed Revised Contract Amount: $132,876,212
6 Contract Scope Removal
Proposed Revised Contract Amount
Construction Cost Contingency
Increase
Anticipated cost increases for remaining work:
• Tunnel Lining Repair: Increase in bid item quantities and price to complete the tunnel lining repair. Contract anticipated quantities were already exceeded during shutdown No. 3.
• New Priest Adit Final Lining: Change order being negotiated revising the lining from shotcrete sprayed lining to reinforced concrete lining for constructability and better long-term durability. • Temporary Water Filtration Unit: Required for Moccasin Camp during winter tunnel outages.
• Owner-requested changes to the contractual start and end dates for tunnel outages due to water quality issues at downstream reservoirs. • Additional roadway improvements to Rickson Road at the Priest Reservoir site.
7 Tunnel Lining Repair
8 Priest Adit Concrete Final Lining and
Moccasin Camp Water Filtration Unit
9 Horseshoe shaped tunnel 1000 feet
long and 15 feet wide by 15 feet tall
Requested Cost Contingency Increase
Recommended:
• Original Cost Contingency: $13,897,318
• Modifications Nos. 1 through 16: ($9,630,106)
• Remaining Cost Contingency: $4,267,212
• Recommended Additional Cost Contingency:
+ $13,029,702
Total Revised Cost Limit: $150,173,126
(Revised Contract Amount($132,876,212) + Remaining Cost Contingency + Recommended Additional Cost Contingency)
No change to Contract duration.
10 Questions
11 DEPARTMENT
Infrastructure Division
AGENDA NO. 11
MEETING DATE
January 14, 2025
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Project Manager: Randy Anderson
Approve Modification No. 17 to Contract HH-1000R, Mountain Tunnel Improvements Project, Decreasing the Contract Amount, and Approve an Increase to Cost Contingency
Summary of Proposed
Commission Action:
Approve Modification No. 17 to Contract No. HH -1000R, Mountain Tunnel Improvements Project, with Mountain Tunnel Constructors, Inc., decreasing the contract amount by $15,727,083, for a new total contract amount of $132,876,212, to remo ve scope of work from the contract to be completed under separate future contract(s); and approve an increase of $13,029,702 to the cost contingency for the contract, for a new total cost contingency of $17,296,914, and a revised cost limit of $150,173,126, to account for additional tunnel lining repair, a new concrete final lining for the Priest Adit, and other additional contingency increases within the contract, with no change to the contract duration.
Background: The San Francisco Public Utilities Commission (SFPUC) Water Enterprise ’s Mountain Tunnel conveys the Hetch Hetchy water supply approximately 19 miles from Kirkwood Powerhouse to Priest Reservoir. The tunnel , which is horseshoe-shaped, is approximately 15 feet tall and 15 feet wide. It delivers a minimum of 300 million gallons of water p er day, and i t is a critical, non - redundant link in the Hetch Hetchy water system. Having been in service since 1925, sections of the tunnel’s original lining have deteriorated due to age, original construction deficiencies, and deferred maintenance, resulting in vulnerabilities to meeting water quality and delivery reliab ility level- of- service objectives. The Mountain Tunnel Improvements Project (Project) is a multi-year project to perform rehabilitation and improvements to extend the life of this critical water conveyance facility.
On October 13, 2020, by Resolution No. 20- 0210, this Commission awarded Contract No. HH -1000R, Mountain Tunnel Improvements Project , to Michels Tunneling, in the amount of $138,973 ,189 and a duration of 2,160 consecutive calendar days.
Scope of Contract: The objective of the Project and Contract No. HH-1000R is to improve the reliability and control of water flow, water quality, and maintenance access through the rehabilitation of the Mountain Tunnel and related improvements.
Agenda Title: HH-1000R, Mountain Tunnel Improvements Project Commission Meeting Date: January 14, 2025
The work includes concrete lining repairs, contact grouting, concrete invert paving, a large flow control valving facility, new tunnel adit and access portals, new siphon extension, deep shafts, access road stabilization and improvements, environmental mit igations, and other site work and restoration.
Modifications to the
Contract:
On June 13, 2023, by Resolution No. 23 -0110, this Commission approved the assignment of Contract HH-1000R, Mountain Tunnel Improvements Project, from Michels Tunneling to Mountain Tunnel Constructors, Inc., a wholly owned Michels Corporation affiliate.
Modification Nos. 1 to 16: Prior modifications to Contract HH -1000R increased the contract amount by $9,630,106, cumulatively , for a total contract amount of $148,603,295, with no change to the contract duration and within the original contract cost contingency.
Proposed Modification No. 17: SFPUC s taff recommends Commission authorization to decrease the contract amount by $15,727,083, for a new total contract amount of $132,876,212 , with no change to the contract duration.
SFPUC staff recommends removing the South Fork and Adit 5/6 and 8/9 Roadway Improvements from the contract scope of work. The primary reasons for this recommendation are as follows: (1) the contractor is unwilling to initiate construction of the South Fork Shaft and Siphon Extension and the remaining South Fork Access Roadway improvement work due to perceived safety/constructability concerns ; (2) the construction of the gabion walls on Adit 5/6 and 8/9 R oadways presents a significant construction challenge due to the narrow roads , requiring a significant redesign that would result in change orders and delays to the project completion date ; and (3) the tunnel invert paving work is depe ndent upon improving Adit 5/6 Roadway and therefore is also being removed from the Contract.
The roadway improvements at Second Garrote are no longer needed because the shaft at Second Garrote will not be utilized as originally intended as an access shaft for the contact grouting inside the tunnel.
Negotiations with the contractor have concluded. B oth parties have agreed to remove the described scope of work from the Contract and have signed a change order in the amount of $15,727,083 to be deducted from the Contract.
Commission approval is required for the scope change because the Contract deduction is greater than 10% of the Contract value.
SFPUC s taff recommends removing this scope of work from the C ontract and completing it under separate future contract(s).
Agenda Title: HH-1000R, Mountain Tunnel Improvements Project Commission Meeting Date: January 14, 2025
The proposed modification will delete the following scope of work from the Contract:
South Fork ($8,325,088)
• Construct a 100-foot-deep access shaft with a concrete bulkhead • Construct a 750-foot-long siphon extension
• Construct a bulkhead inside the tunnel
• Construct a rock trap inside the siphon extension
• Install steel lining in fractured rock zone in siphon extension • Pour a concrete plug in the abandoned siphon
• Drill air vents (holes drilled through rock above tunnel to the surface) • Various roadway improvements along the South Fork Access Roadway
Adit 5/6 and 8/9 Roadway Improvements ($6,975,350)
• Widen roads to 12 feet (minimum)
• Install a new gravel road section to the portion of the widened roadway • Construct gabion walls (structural enclosure filled with rocks) which facilitate the road widening; total length of gabion walls is approximately 5,200 linear feet
• Install two zones of reinforced concrete deck supported on micropiles (Adit 5/6 only)
• Resurfacing roadways with gravel
• Install water bars to facilitate roadway drainage
In Tunnel Work ($410,000)
• 5,000 feet of tunnel invert concrete paving
Second Garrote Road Improvements ($16,645)
• Surface roadway improvements
Recommended Increase to Cost Contingency : Staff recommends the Commission approve an increase in the amount of $13,029,702 to the remaining existing cost contingency in Contract No. HH-1000R, for a revised cost limit of $150,173,126, with no change to the contract duration. The purpose of the increase is to account for: unforeseen additional quantities for the concrete lining repair inside the Mountain Tunnel ; a design change in the Priest Adit final lining from a sprayed shotcrete lining to a reinforced concrete lining ; temporary, portable water filtration unit located at the existing Moccasin domestic water treatment facility for the Moccasin Camp water supply during outages; unanticipated City delays to the contract outage start/end dates; and additional roadway improvements for Rickson Road at the Priest Reservoir Site.
The additional cost contingency will account for additional potential unforeseen costs related to:
Agenda Title: HH-1000R, Mountain Tunnel Improvements Project Commission Meeting Date: January 14, 2025
• Increasing bid item 5 (Tunnel Lining Removal) and bid item 6 (Tunnel Lining Repairs) to account for anticipated additional work inside the tunnel to completely repair all the deteriorated concrete lining. The bid item quantities were exceeded in the previo us outage and are anticipated to increase in quantity during the remaining shutdowns.
• Upcoming change order directing the contractor to construct a reinforced concrete final lining instead of a sprayed shotcrete final lining for the New Priest Adit. A par tial change order has been administered to facilitate the procurement of steel forms, but the final change order is still being negotiated.
• Upcoming change orders to pay for a temporary water filtration plant for drinking water at Moccasin Camp for outage
s 4 and 5. Outages 1,
2 and 3 were previously paid for out of the existing contract contingency. The use of a temporary water filtration plant was not originally envisioned for the Contract ; however, construction of the new permanent filtration plant was delayed.
• Additional funds to pay for anticipated change orders for unanticipated City changes to the contract start and end dates for the outages due to water quality issues in the downstream reservoirs.
• Additional roadway improvements to Rickson Road, which includes larger turnouts, longer retaining walls, additional culverts, and additional road paving needed for safety.
Funding and Costs: Funding Source: Project No. 10014114, Mountain Tunnel Improvements Project
Original Contract Amount: $138,973,189
Modification Nos. 1 through 16 Amount Change: $9,630,106 Requested Modification No. 17 Amount Change: ($15,727,083) Proposed New Contract Amount: $132,876,212
Remaining Cost Contingency after Modification Nos. 1 through 16:
$4,267,212
Recommended Additional Cost Contingency: $13,029,702
Total Revised Cost Limit: $150,173,126
Schedule: Notice-to-Proceed Date: January 29, 2021
Original Contract Duration: 2,160 consecutive calendar days Modification Nos. 1 through 16 Duration Change: 0 days
Requested Modification No. 17 Duration Change: 0 days
Total Contract Duration: 2,160 consecutive calendar days Agenda Title: HH-1000R, Mountain Tunnel Improvements Project Commission Meeting Date: January 14, 2025
Original Contract Duration: 2,160 consecutive calendar days Original Contract Duration Contingency: 216 days
Requested Additional Duration Contingency: 0 days
Total Contract Duration Limit: 2,376 consecutive calendar days
Local Business
Enterprise Utilization
and Non-
Discrimination in
Contracting:
The Contract Monitoring Division established a 3% Local Business Enterprise (LBE) subcontracting requirement for this contract. The contractor committed to a 5.347% LBE subcontractor participation with its bid submittal, and this amount remains unchanged.
Environmental
Review:
On October 23, 2019, the San Francisco Planning Department issued the Final Mitigated Negative Declaration for the Mountain Tunnel Improvements Project (Case No. 2017-
014249ENV), as required by the California
Environmental Quality Act (CEQA).
On November 12, 2019, by Resolution No. 19- 0213, this Commission adopted the Final Mitigated Negative Declaration, approved the Project, and adopted the CEQA Findings contained in Resolution No. 19- 0213 and the Mitigation Monitoring and Reporting Program, as required by CEQA. The work under Modification No. 17 is within the scope of the project authorized under the Final Mitigated Negative Declaration.
The Final Mitigated Neg ative Declaration , Resolution No. 19- 0213, CEQA Findings contained in Resolution No. 19- 0213, and Mitigation Monitoring and Reporting can be found at the following link:
https://sfpuc.sharefile.com/public/share/web-
s4b638353655140a2acdc58395f53b596
Attachment(s): 1. CMD Memorandum
Agenda Title: HH-1000R Mountain Tunnel Improvements Project Commission Meeting Date: January 14, 2025
Location Map:
Mountain Tunnel Improvements Project
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, On October 13, 2020, by Resolution No. 20- 0210, this Commission approved the award of Contract No. HH- 1000R, Mountain Tunnel Improvements Project , to Michels Tunneling; and
WHEREAS, The construction contract Notice -to-Proceed date was January 29 th, 2021;
and
WHEREAS, On June 13, 2023, by Resolution No. 23- 0110, this Commission approved the assignment of Contract No. HH -1000R to Mountain Tunnel Constructors, Inc ., a wholly owned affiliate of Michels Corporation; and
WHEREAS, The original contract amount was for $138,973,189, and the original contract duration was 2,160 consecutive calendar days; and
WHEREAS, Staff recommends the Commission approve Modification No. 17 to Contract No. HH-1000R, decreasing the existing contract amount by $15,727,083, for a revised total contract amount of $132,876,212, to remove the following scope of work, which will be completed under separate future contract(s): the South Fork Shaft and Siphon Extension, remaining South Fork Access R oadway improvements, remaining Adit 5/6 and 8/9 Roadway improvements, tunnel paving and the road improvements at the Second Garrote site; and
WHEREAS, Staff also recommends approval of an increase of $ 13,029,702 to the existing cost contingency in Contract No. HH -1000R, for a revised cost limit of up to $150,173,126, and no change to the contract duration, to fund additional potential change order work related to increased scope of work for the tunnel lining repair, final lining in the New Priest Adit, temporary water filtration plant, changes to the contract outage start and end dates , and additional roadway improvements for Rickson Road; and
WHEREAS, The Contract Monitoring Division established a 3% Local Business Enterprise (LBE) subcontracting participation requirement for this Contract and Mountain Tunnel Constructors, Inc., committed to a 5.347% LBE subcontractor participation with its bid submittal, and this remains unchanged; and
WHEREAS, Funds for this contract are available from Project No. 1 0014114, Mountain Tunnel Improvements Project; and
WHEREAS, On October 23, 2019, the San Francisco Planning Department issued the Final Mitigated Negative Declaration for the Mountain Tunnel Improvements Project (Case No. 2017-014249ENV), as required by the California Environmental Quality Act (CEQA); and
WHEREAS, On November 12, 2019, by Resolution No. 19- 0213, this Commission adopted the Final Mitigated Negative Declaration, approved the Project, and adopted the CEQA Findings contained in Resolution No. 19- 0213 and the Mitigation Monitoring and Reporting Program, as required by the CEQA , and the work under proposed Modification No. 17 to Contract No. HH -1000R is within the scope of the project authorized under the Final Mitigated Negative Declaration; and
WHEREAS, The San Francisco Planning Department is the custodian of records, located in File No. 2017- 014249ENV, at 49 South Van Ness Avenue, Suite 1400, San Francisco, California 94103, which have been made available for review by this Commission and the public, and those files are part of the record before this Commission; and
WHEREAS, Staff has made the Project files, including the Final Mitigated Negative Declaration, the CEQA Findings contained in Resolution No. 19- 0213, and the Mitigation Monitoring and Reporting Program available for review by this Commission and the public, and those files are part of the record before this Commission; and
WHEREAS, This Commission has reviewed and considered the information contained in the Final Mitigated Negative Declaration, Resolution No. 19 -0213, the CEQA Findings contained in SFPUC Resolution No. 19-0213, the Mitigation and Monitoring Reporting Program, and all written and oral information provided by the San Francisco Planning Department, the public, relevant public agencies, SFPUC and other experts and the administrative files for the Project; now, therefore be it
RESOLVED, This Commission ha s reviewed and considered the Final Mitigated Negative Declaration and the record as a whole, and finds that the Final Mitigated Negative Declaration is adequate for its use as the decision –making body for the Project and incorporates the CEQA Findings contained in Resolution No. 19- 0213 by this reference thereto as though set forth in this Resolution; and be it
FURTHER RESOLVED, This Commission further finds that since the Final Mitigated Negative Declaration was finalized, there have been no substantial Project changes and no substantial changes in Project circumstances that would require major revisions to the Final Mitigated Negative Declaration due to the involvement of new significant environmental effects or an increase in the severity of previously identified significant impacts, and there is no new information of substantial importance that would change the conclusions set forth in them; and be it
FURTHER RESOLVED, This Commission hereby approves Modification No. 17 to Contract No. HH -1000R, Mountain Tunnel Improvements Project , with Mountain Tunnel Constructors, Inc., decreasing the existing contract amount by $15,727,083, for a new total contract amount of $132,876,212, and with no change to the contract duration; and be it
FURTHER RESOLVED, That this Commission hereby approves an increase to the existing cost contingency for Contract No. HH -1000R, Mountain Tunnel Improvements Project, in the amount of $13,029,702,for a new total contract cost limit of $150,173,126, and with no change to the contract duration.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of January 14, 2025.
Director of Commission Affairs
San Francisco Public Utilities Commission
CONTRACT MONITORING DIVISION
CITY ADMINISTRATOR’S OFFICE
London N. Breed, Mayor
Naomi M. Kelly, City Administrator
Romulus Asenloo, Director
MEMORANDUM
Date: September 21, 2020
To: David Tsztoo, Project Manager, SFPUC
From: Linda Rainaldi, Contract Compliance Officer, CMD
Subject: HH-1000R Mountain Tunnel Improvement Project – CMD Review Memo
The Contract Monitoring Division (“CMD”) reviewed the bids submitted for the above referenced project, applied the appropriate bid discounts, and determined responsiveness to the Chapter 14B pre-award requirements. An LBE subcontracting requirement of 3% was established for this project. Below is a summary of CMD’s review.
Bidder LBE Status Base Bid LBE Bid Discount Adjusted Bid with LBE Bid Discount
Michels Tunneling, a
Division of Michels
Corporation
Non-LBE
$138,973,189.00
Not Applicable
$138,973,189.00
Flatiron-Drill Tech, a Joint
Venture Non-LBE JV $167,490,996.00 Not Applicable $167,490,996.00
Michels Tunneling, a Division of Michels Corporation (“Michels”) is the lowest responsive bidder. Michels met the 3% LBE subcontracting requirement by listing the following LBE firms on Section 00 43 36 (Subcontractor List):
Subcontractor Scope of Work LBE Status Listed Amount Credited Amount
Participation
(based on credited
amount)
Alta Engineering
Group, Inc. dba Alta
Group, Inc.
Furnish and Install
Reinforcing Steel
SF LBE-WBE
(Small)
$1,611,052.00
$1,611,052.00
1.159%
Canepa and Sons,
Inc.
Drilling (Grout
Delivery Shaft)
SF PUC LBE-
OBE (Micro) $254,408.00 $245,048.501 0.176%
M. Hernandez
Construction Inc.
DBA Hernandez
Engineering
Traffic Control SF LBE-MBE
(Micro)
$650,000.00
$650,000.00
0.468%
Pacific Engineering
and Construction,
Inc.
Survey, SWPPP,
Materials Testing
SF LBE-OBE
(Micro)
$650,000.00
$650,000.00
0.468%
Schrader Mechanical
Inc.
Electrical/HVAC/
Controls/Automation/
Instrumentation
SF PUC LBE-
OBE (Small)
$4,485,162.00
$4,274,162.002
3.076%
1155 Market Street, 4th Floor, San Francisco, CA 94103
Telephone (415) 581-2310 Fax (415) 581-2351
Total $7,650,622.00 $7,430,262.50 5.347%
1 Canepa and Sons, Inc.’s total listed amount was reduced for LBE credit as they will further subcontract out $7,632.00 to a non-LBE subcontractor, Columbia Concrete. In addition, Canepa and Sons, Inc.’s listed amount also includes well permits totaling $1,727.50; permit fees are ineligible for LBE participation credit and as a result, the total LBE listed amount was further reduced for applicable LBE credit.
2 Schrader Mechanical Inc.’s total listed amount was reduced for LBE credit as they will further subcontract $211,000 to a non-LBE subcontractor, Industrial Power Solutions.
Michel’s also listed the following non-LBE subcontractor on Section 00 43 36:
Subcontractor Scope of Work Listed Amount
Apex Rockfall Mitigation LLC Items- 35, 36, 37, 38, 39, 40, 41, 42, 43 $7,040,083.00 Cody Builders Supply Fabrication of Structural & Misc. Metals $1,900,000.00 GeoStructural Engineering Inc. FCF Pad & Priest Portal Walls $1,300,000.00 Kroner Environmental Services, Inc. Water Treatment $3,268,963.00 Renesco, Inc Waterproofing $847,463.08
Based on the foregoing, CMD has determined that Michel’s has complied with the pre-award Chapter 14B requirements. Should you have any questions, or if I can be of further assistance, please do not hesitate to contact Linda Rainaldi at (415) 554-3106.