DEPARTMENT
Infrastructure Division
AGENDA NO. 11
MEETING DATE
January 27, 2026
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Project Manager: Jimmy Leong
Approve an Increase to the Duration Contingency for Contract No. HH-1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower
Summary of Proposed
Commission Action:
Approve an increa se of 208 calendar days to the duration contingency for Contract No. HH-1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower , with Mountain Cascade Inc., for a revised duration limit of 765 calendar days (approximately two years and one month), with no change to the contract amount, to complete the replacement of a water sampling line.
Background: The S an Francisco Public Utilities Commission (SFPUC) Water Enterprise owns and operates four pipelines (collectively, Pipelines) that deliver Hetch Hetchy water to the San Francisco Bay Area. San Joaquin Pipeline Nos. 1, 2, and 3 consist of three parallel transmission pipelines (completed in 1932, 1953, and 1968, respectively) that cross the San Joaquin Valley from the east of Foothill Tunnel at Oakdale Portal to the west of Coast Range Tunnel at Tesla Portal, a distance of approximately 48 miles. A fourth partial pipeline (Pipeline No. 4, completed in 2012) consists of a 6.4- mile segment of pipe downstream of Oakdale and another 11- mile segment upstream of Tesla Portal. The Pipelines have been in service ranging from 13 to 93 years. SFPUC staff members and contractors must enter the Pipelines regularly to perform condition assessment, maintenance, and repair work.
A recent hydraulic study shows that several of the existing valves in the Pipelines may be under-rated in design pressure tolerance for the potential water system surge pressure that could be triggered from an unplanned closure of the valves at the SFPUC’s downstream Tesla Treatment Facility. For safety reasons, the SFPUC initiated the San Joaquin Pipeline Valve and Safe Entry Improvement Project (Project), to increase the pressure rating of the valves ; install an open-ended surge tower to avoid any system over-pressurization Agenda Title: HH-1009 San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower Commission Meeting Date: January 27, 2026
resulting from surges and/or valve closures ; provide safe pipeline isolations for personnel entry into the Pipelines; and allow shutdown of any section of the Pipelines without a complete system shutdown.
Staff has been implementing the Project in multiple phases, specifically phases 1A, 1B, 2A, 2B , 2 C, and 3. Contract No.
HH- 1009 is for the improvement work of Phase 3, to construct a new surge tower and ancillary facilities.
On January 9, 2024, by Resolution No. 24- 0002, this Commission awarded Contract No. HH -1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower , to Mountain Cascade Inc., in the amount of $11,051,305 and for a duration of 452 consecutive calendar days.
On January 14, 2025, by Resolution No. 25- 0002, this Commission approved an increase of 60 calendar days to the existing duration contingency, for a revised duration limit of up to 557 calendar days, with no change to the contract amount.
In September 2025, a 1- inch polyvinyl chloride ( PVC) water sampling pipeline, installed under this contract and connected to an existing 144-inch diameter main steel pipe, ruptured. The contractor immediately stopped the leakage using a temporary plug. A post - incident investigation determined that the failure occurred due to shear at the male adaptor threads of the PVC pipe. Following consultation with the Operations Department, the SFPUC project team recommend ed replacing the PVC water sampling
pipe with
stainless steel material to prevent similar incidents in the future. For worker safety and to maintain water supply reliability, the permanent repair will be scheduled during the planned winter system shutdown, when the 144-inch diameter main pipeline will be drained, between January and March 2026.
Scope of Contract: The contract work location is at Tesla Portal in San Joaquin County.
The contract work consisted of:
• Furnish and install 880 linear feet of 60-inch diameter welded steel surge pipe, fittings, and appurtenances.
• Furnish and install an approximately 63- foot-tall steel surge tower including a 60- inch diameter steel pipe surge shaft, a 132-inch diameter steel exterior shroud, a reinforced
concrete thrust block, and a transition spillway.
Agenda Title: HH-1009 San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower Commission Meeting Date: January 27, 2026
• Furnish and install a water recirculation system including a prefabricated pump building and the associated mechanical, electrical, and plumbing work.
• Demolish and rebuild approximately 195 linear feet of existing reinforced concrete spillway.
• Construct other associated works including culvert drainage improvements, grading, fencing, a new gravel access road, and removal of the old abandoned underground pipes.
Modifications to the
Contract:
Modification Nos. 1 -8: Staff issued Modification Nos. 1 to 8, increasing the contract amount by $465,659 and increasing the contract duration by 68 calendar days , within the original contingencies, to address California Department of Fish and Wildlife (CDFW) permit requirements, design modifications, and differing site conditions, for a revised contract amount of $11,516,964 and a revised contract duration of 520 calendar days.
Modification No. 9: Effective September 3, 2025, the SFPUC modified the contract, reducing the contract amount by $160,296, due to the credits from unused allowances, for a revised contract amount of $11,356,668, with no change in the contract duration.
Recommended Increase to Contract Duration Contingency:
Staff recommends the Commission approve an increase of 208 calendar days to the existing contract duration contingency, for a total revised duration limit of 765 consecutive calendar days, to allow time to design, and replace the PVC water sampling pipe with stainless steel pipe, with no change in the total contract cost limit.
Funding and Costs: Funding Source: Hetchy Capital Improvement Program, Project No. 10035575, San Joaquin Pipeline Valve and Safe Entry Improvements
Original Contract Amount: $11,051,305
Original 10% Cost Contingency: $1,105,130
Approved Increase to Cost Contingency: $0
Modified Increases to Contract Amount: $305,363
Total Current Contract Amount: $11,356,668
Current Cost Contingency: $799,767
Requested Additional Cost Contingency: $0
Total Cost Limit: $12,156,435
Schedule: Notice-to-Proceed Date: February 26, 2024
Original Contract Duration: 452 consecutive calendar days Original 10% Duration Contingency: 45 calendar days
Agenda Title: HH-1009 San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower Commission Meeting Date: January 27, 2026
Approved Increase to Duration Contingency: 60 calendar days Modified Increases to the Contract Duration: 68 calendar days Total Current Contract Duration: 520 consecutive calendar days Current Duration Contingency: 37 calendar days
Requested Additional Duration Contingency: 208 calendar days [Proposed] Total Revised Duration Limit: 765 calendar days
Environmental
Review:
On October 30, 2008, the San Francisco Planning Commission certified the Final Program Environmental Impact Report (Program EIR) (Case No. 2005.0159E) for the Water System Improvement Program, prepared pursuant to the California Environmental Quality Act (CEQA).
On December 18, 2008, the San Francisco Planning Commission certified the Final Environmental Impact Report (Final EIR) for the San Joaquin Regional Water Quality Improvement Project (Case No. 2007.0427E), which is tiered from the Program EIR. On December 18, 2008, by Resolution No. 08-0234, this Commission approved the Tesla Treatment Facility and Lawrence Livermore Water Quality Improvement projects, which were included in the scope of work analyzed in the Final EIR , and adopted the CEQA Findings and a Mitigation Monitoring and Reporting Program, as required by the CEQA.
On December 19, 2023, the San Francisco Planning Department issued an Addendum to the Final EIR for the addition of a new surge shaft (above -
ground tower) and related facilities at the Tesla
Treatment Facility, and a recirculation system to prevent stagnant water from sitting in the proposed new 60 -inch diameter surge pipeline.
On January 9, 2024, by Resolution No. 24- 0002, this Commission awarded Contract No. HH -1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower.
The work under this proposed modification to Contract No. HH - 1009 is within the scope of the Project authorized under the Final EIR and Addendum.
The Program EIR, CEQA Findings, and Mitigation Monitoring and Reporting Program can be found here:
https://sfpuc.sharefile.com/public/share/web-
s2fd0c503fa3a40428c99599227d2605e
Agenda Title: HH-1009 San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower Commission Meeting Date: January 27, 2026
The Final EIR, Addendum, Resolution No. 08 -0234 and the CEQA Findings and Mitigation Monitoring and Reporting Program, and Resolution No. 24-0002 can be found here:
https://sfpuc.sharefile.com/public/share/web-
s33fe7fb5d66d4fb88ca3b509a5f3e631
Local Business
Enterprise Utilization
and Non-
Discrimination in
Contracting:
The Contract Monitoring Division established a 9% Local Business Enterprise (LBE) subcontracting requirement for this contract. The contractor committed to 9.78% LBE subcontractor participation with its bid submittal, and this amount remains unchanged.
Agenda Title: HH-1009 San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower Commission Meeting Date: January 27, 2026
SITE LOCATION MAP
HH-1009 SAN JOAQUIN PIPELINE VALVE AND SAFE ENTRY IMPROVEMENTS PHASE 3 TESLA SURGE TOWER
Work will occur at Tesla Portal
Project Location 01 in the map below (circled)
HH-1009 Contract Work Location
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Public Utilities Commission (SFPUC) Water Enterprise owns and operates four San Joaquin Pipelines (Pipelines) that have been in service ranging from 13 to 93 years, and the SFPUC must enter the Pipelines regularly to perform condition assessment, maintenance, and repair work; and
WHEREAS, A recent hydraulic study shows that several of the existing valves in the Pipelines may be under -rated in design pressure tolerance for potential water system surge pressures that could be triggered by an unplanned closure of the valves at the SFPUC’s downstream Tesla Treatment Facility; and
WHEREAS, For safety reasons, the SFPUC initiated the San Joaquin Pipeline Valve and Safe Entry Improvements Project (Project), to increase the pressure rating of the valves; install an open-ended surge tower to avoid any system over -pressurization resulting from surges and/or valve closures; provide safe P ipeline isolations for personnel entry; and allow shutdown of any sections of the Pipelines without a complete system shutdown; and
WHEREAS, SFPUC staff is implementing the P roject in phases, specifically Phases 1A, 1B, 2A, 2B, 2C, and 3; and construction Contract No. HH-1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower, is for the improvement work of Phase 3, to construct a new surge tower and ancillary facilities; and
WHEREAS, On January 9, 2024, by Resolution No. 24-0002, this Commission awarded Contract No. HH-1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower, to Mountain Cascade Inc.; and
WHEREAS, The original contract amount was for $11,051,305 and the original contract duration was 452 consecutive calendar days; and
WHEREAS, The contract Notice-to-Proceed date was February 26, 2024; and
WHEREAS, On January 14, 2025, by Resolution No. 25-0002, this Commission approved an increase of 60 calendar days to the existing duration contingency, for a new contract duration limit of up to 557 calendar days, with no change to the contract amount; and
WHEREAS, Staff issued Modification Nos. 1 through 8, increasing the contract amount by $465,659, and the contract duration by 68 calendar days, to address California Department of Fish and Wildlife (CDFW) permit requirements, design modifications, and differing site conditions, for a revised contract amount of $11,516,964 and a revised contract duration of 520 consecutive calendar days; and
WHEREAS, Staff issued Modification No. 9, decreasing the contract amount by $160,296, due to the credits from unused allowances, for a total current contract amount of $11,356,668, with no change in the contract duration; and
WHEREAS, A 1-inch diameter polyvinyl chloride (PVC) water sampling line ruptured in September 2025 due to the shear at the adaptor; to prevent similar incidents in the future, SFPUC staff recommends replacing the PVC line with stainless steel pipe; and
WHEREAS, SFPUC s taff recommends the Commission approve a n increase of an additional 208 calendar days to the existing duration contingency, for a revised duration limit of 765 calendar days, to allow time to design, and replace the PVC water sampling pipe with stainless steel pipe, with no change to the existing cost contingency; and
WHEREAS, The Contract Monitoring Division established a Local Business Enterprise (LBE) subcontracting participation of 9% for this contract, the contractor committed to a n LBE subcontractor participation of 9.78% with its bid submittal, and this amount remains unchanged; and
WHEREAS, On October 30, 2008, the San Francisco Planning Commission certified the Final Program Environmental Impact Report (Program EIR) (Case No. 2005.0159E) for the Water System Improvement Program, prepared pursuant to the California Environmental Quality A ct (CEQA); and
WHEREAS, On December 18, 2008, the San Francisco Planning Commission certified the Final Environmental Impact Report (Final EIR) for the San Joaquin Regional Water Quality Improvement Project (Case No. 2007.0427E), which is tiered from the Program EIR; and
WHEREAS, On December 18, 2008, by Resolution No. 08- 0234, this Commission approved the Tesla Treatment Facility and Lawrence Livermore Water Quality Improvement projects, which were included in the scope of work analyzed in the Final EIR , and adopted the CEQA Findings and a Mitigation Monitoring and Reporting Program, as required by the CEQA; and
WHEREAS, On December 19, 2023, the San Francisco Planning Department issued an Addendum to the Final EIR for the addition of a new surge shaft (above-ground tower) and related facilities at the Tesla Treatment Facility, and a recirculation system to prevent stagnant water from sitting in the proposed new 60-inch diameter surge pipeline; and
WHEREAS, The work under this proposed modification to Contract No. HH- 1009 is within the scope of the Project authorized under the Final EIR and Addendum; and
WHEREAS, The San Francisco Planning Department is the custodian of records, located in the file for Case Number 2007.0427E 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 Program EIR, Final EIR, Addendum to the Final EIR, Resolution No. 08-0234, Resolution No. 24 -0002, and the CEQA Findings 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 Program EIR, Final EIR and Addendum, the CEQA Findings and Mitigation Monitoring and Reporting Program, and all written and oral information provided by the San Francisco Planning Department, the public, relevant public agencies, SFPUC staff and other experts, and the administrative files for the Project; and
WHEREAS, Funds are available from Project No. 10035575, San Joaquin Pipeline Valve and Safe Entry Improvements; now, therefore, be it,
RESOLVED, This Commission has reviewed and considered the Program EIR, Final EIR the Addendum, and the record as a whole, and finds that the Program EIR, Final EIR , and Addendum are adequate for its use as the decision–making body for the Project, and incorporates the CEQA Findings and Mitigation Monitoring and Reporting Program and Resolution No. 08- 0234 and the CEQA Findings in R esolution No. 24-0002 by reference thereto as though set forth in these resolutions; and, be it,
FURTHER RESOLVED, This Commission further finds that since the Program EIR, Final EIR, and Addendum were finalized, there have been no substantial Project changes and no substantial changes in Project circumstances that would require major revisions to them 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, That this Commission hereby approves an increase of 208 calendar days to the existing duration contingency for Contract No. HH -1009, San Joaquin Pipeline Valve and Safe Entry Improvements Phase 3 Tesla Surge Tower, with Mountain Cascade Inc., for a total duration contingency of 313 calendar days, with no change to the contract amount; and, be it,
FURTHER RESOLVED, That this Commission hereby authorizes the General Manager, or the General Manager’s designee, to consider and, if appropriate, to approve any future modifications to the contract, up to a total duration limit of 765 calendar days.
I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting of January 27, 2026.
Director of Commission Affairs
San Francisco Public Utilities Commission