CC#14 - Legistar Item 26-1300
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Report regarding a resolution awarding a construction contract to JDB and Sons Construction, Inc. of San Francisco, California, for the Mission Road Underground Utility District Project (No. st1904, Bid No. 2711) in an amount not to exceed $6,688,000 and related actions. (Jeffrey Chou, Senior Civil Engineer)
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RECOMMENDATION
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Staff recommends that the City Council adopt a resolution awarding a construction contract to JDB and Sons Construction, Inc. of San Francisco, California, for the Mission Road Underground Utility District Project (No. st1904, Bid No. 2711) in an amount not to exceed $6,688,000 authorizing a total construction contract authority budget of $7,691,200, contingent upon confirmation of funding through work credits under PG&E’s Rule 20A Program, and authorizing the City Manager to execute the agreement on behalf of the City; execution of a Work Plan Agreement between the City and PG&E; and approving associated Budget Amendment Number 26.061.
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BACKGROUND/DISCUSSION
On August 22, 2018, the City Council adopted Ordinance No. 1561-2018 establishing the Mission Road Underground Utility District (District) pursuant to the Rule 20A program of the California Public Utilities Commission (CPUC), administered by Pacific Gas and Electric Company (PG&E).
The District extends approximately 2,500 linear feet along Mission Road between Grand Avenue and the southern entrance to the Bay Area Rapid Transit (BART) station, where the project will connect to existing underground utility facilities. The purpose of the District is to underground existing overhead electric and communication lines to improve safety, enhance system reliability, and reduce visual impacts within the public right-of-way. A map of the District is included in Attachment 1.
The City has previously established the Antoinette and Spruce Underground Utility Districts as part of its broader effort to underground overhead utilities. The Antoinette Underground Utility District was successfully completed in late 2020. However, the Spruce Underground Utility District will not be completed under the Rule 20A program due to rising construction costs, the limited availability of Rule 20A work credits from PG&E, and the ongoing phase-out of the program by the California Public Utilities Commission, as discussed in more detail later in this staff report.
Under Ordinance No. 1561-2018, the City serves as the lead agency responsible for managing the joint trench design and construction. The City constructs the shared underground trench infrastructure, after which participating utilities install their respective facilities. The utilities subsequently reimburse the City for the portions of design and construction costs attributable to their facilities in accordance with applicable agreements.
Government Code Section 54957.5
SB 343 Item #14 04/22/2026 REG CC
City staff engaged the engineering design firm - Sanbell, to prepare the project’s construction plans and specifications. The design team coordinated closely with PG&E, AT&T, Comcast, and Astound Broadband to ensure the proposed design would accommodate the needs of all participating utilities. Following completion of the final design, Astound Broadband elected not to install new underground facilities as part of this project.
The design consultant further coordinated with the utilities to develop the construction cost allocation, commonly referred to as “Form B.” In accordance with Rule 20A requirements established by the CPUC, undergrounding costs are allocated among all participating parties, PG&E, AT&T, Comcast, and the City, based on their respective shares of the work. Rule 20A also allows the City to invoice each utility for one-half of its Form B cost commitment upon award of the construction contract, with the remaining balance invoiced upon final acceptance of the construction work.
The Mission Road Underground Utility District Project (Project) includes the following key components:
• Undergrounding existing utilities: Overhead electric and communication facilities owned by PG&E, AT&T, Comcast, and City streetlights will be relocated into a shared underground trench system constructed within the public right-of-way. • Relocating equipment: Equipment currently mounted on utility poles, such as transformers and switches, will be relocated to ground-mounted cabinets, typically installed within sidewalks or other designated areas.
• Installing service connections: New underground service connections will be installed to serve adjacent properties. The City will also replace existing pole-mounted streetlights with new facilities compatible with the underground system.
The Project will improve public safety by reducing the risk of hazards associated with downed power lines and pole-mounted equipment, while enhancing the reliability of electric, telephone, and cable services by protecting infrastructure from storms, accidents, and other disruptions. In addition, the Project will improve the visual character of the corridor and provide safer, more accessible sidewalks and streets for pedestrians and transit users.
City staff and the contractor will work closely to minimize construction impacts on nearby businesses, schools, and residents. During construction, the public may experience temporary noise, dust, vibration, parking restrictions, and the presence of construction equipment. Temporary lane, road, or sidewalk closures may be necessary, and advance notice will be provided. Driveway and business access will be maintained at all times.
Temporary interruptions to electric, telephone, and cable services may occur as existing overhead lines are disconnected and new underground connections are activated. These interruptions will be scheduled in advance, with notifications provided to affected properties.
Undergrounding projects are typically completed in multiple phases to limit disruption. Trench installation, utility placement, service connections, and street restoration are completed sequentially, with advance notice provided to residents, businesses, and commuters.
Funding for the underground electric facilities is partially offset by the City’s accumulated Rule 20A credits from PG&E, which reduce the overall cost to the City and its residents while supporting the successful completion of the Project.
PG&E Rule 20A Program
The project is partially funded through PG&E’s Rule 20A program, which was established by the CPUC in 1967 to allow local jurisdictions to underground overhead electric distribution lines using utility-provided “work credits.” These credits are funded through electric ratepayer allocations and distributed annually to jurisdictions within PG&E’s service territory based primarily on the number of customers served.
Rule 20A projects are typically initiated by local governments, which must formally establish an underground utility district, coordinate project design and construction, and ensure that adjacent property owners convert their service connections to underground facilities. While Rule 20A credits may cover a substantial portion of the electric utility conversion costs, local agencies are generally responsible for additional project expenses such as civil construction, streetlight replacement, and other associated infrastructure improvements.
In recent years, the CPUC has taken steps to phase out the Rule 20A program. Key milestones include:
• December 31, 2022: PG&E stopped issuing new Rule 20A work credits to local jurisdictions.
• December 31, 2033: Final deadline for all previously issued Rule 20A credits to be used.
Any remaining credit balances after this date will expire and cannot be redeemed.
As part of the program wind-down, remaining Rule 20A credits were prioritized for underserved communities and Environmental and Social Justice areas, including jurisdictions that have not completed a Rule 20A project since 2004 and projects located in communities with high environmental burdens or low-income census tracts as identified by CalEnviroScreen. Because the City of South San Francisco did not meet these prioritization criteria, the City did not receive additional Rule 20A credit allocations.
The City of South San Francisco currently has an available Rule 20A credit balance of $6,364,955, which may be applied toward eligible undergrounding projects, including the Mission Road Underground Utility District, prior to the program’s expiration deadline.
Bid Process and Results
The Project was advertised using formal bid procedures for public projects greater than $200,000 in accordance with the City’s purchasing policy, which falls under Procurement Type 1:
Competitive Bidding for Construction Projects. For more details on the City’s Procurement Process, refer to Attachment 2.
This procedure awards the contract to the lowest responsive and responsible bidder.
Staff advertised a notice inviting bids for the Project on December 22 and December 29, 2025. On February 3, 2026, staff received seven (7) bid proposals in response to the notice inviting bids.
The following is a summary of all bids received:
Rank Contractor "Base Bid" Results
1 JDB and Sons Construction, Inc. of San Francisco, CA $6,688,000.00 2 Liffey Electric of San Francisco, CA $6,758,616.50
3 Phoenix Electric Company of San Francisco, CA $6,883,231.50 4 SubTerra Construction Inc. of San Francisco, CA $7,586,356.50 5 Casey Construction, Inc. of Emerald Hills, CA $7,968,372.00 6 West Valley Construction Company Inc. of Campell, CA $8,036,883.50 7 Azul Works, Inc. of San Francisco, CA $8,713,415.23
Engineers Estimate (by Sanbell) $6,260,000.00
The selection of award of a contract is based on the lowest responsive bid for the “Base Bid” schedule.
Staff reviewed all bid proposals and identified that the lowest responsible bidder was JDB and Sons Construction, Inc. of San Francisco, California. Staff has verified the low bidder’s current contractor’s license with the California State Licensing Board and found it to be in good standing.
JDB and Sons Construction, Inc. submitted a bid that is approximately 6.8% higher than the Engineer’s Estimate. Staff and City’s engineering consultant reviewed the bid and found it consistent with current market prices, considering the current construction climate and rising cost in material and labor.
Upon review, staff determined that the bid is competitive and not materially unbalanced.
Staff recommends awarding the “Base Bid” to JDB and Sons Construction, Inc.
The proposed project construction budget is:
JDB and Sons Construction, Inc.’s Construction Contract $ 6,688,000 Construction Contingency (15%) $ 1,003,200
Total Project Construction Budget $ 7,691,200
The construction contingency will be used for any additional costs related to design changes during the construction operations. There are no Disadvantaged Business Enterprise (DBE) requirements since no federal funds are being utilized on the Project.
FISCAL IMPACT
The Mission Road Underground Utility District Project (CIP No. ST1904) is included in the City of South San Francisco’s Fiscal Year 2025-26 Capital Improvement Program.
Rule 20A credits represent reimbursement to the City for PG&E’s share of project costs, as defined in the Form B cost allocation. PG&E funds its portion of the work using Rule 20A work credits allocated to the City. As of December 31, 2025, the City has an available balance of $6,364,955 in Rule 20A work credits. AT&T and Comcast will reimburse the City for their respective shares of project costs directly from their capital budgets.
With the updated project costs from the low bidder, the Form B cost allocation is as follows:
PG&E AT&T COMCAST CITY
$3,763,916* $1,643,749 $1,576,480 $1,449,984
*In addition to PG&E’s Form B cost allocation, PG&E has identified direct project costs estimated at $4,6000,000, resulting in a total PG&E project cost of $8,7,7363,916. This amount exceeds the City’s available Rule 20A work credits, requiring the City to fund a shortfall of approximately $1,9398,961 to move the Project forward. A Work Plan Agreement between the City and PG&E will be required to document and authorize the City’s responsibility for this funding gap.
While this represents an additional investment, proceeding with the Project at this time can be fiscally and strategically justified. The City has accumulated a substantial balance of Rule 20A credits that must be used before the program expires under direction from the CPUC. The City is currently engaged in discussion with PG&E to confirm the manner in which the Rule 20A credits would be applied to this Project to ensure that the City can advance the Project now and maximizes the benefit of ratepayer funded credits while they remain available. The staff recommendation thus includes awarding of the contract contingent on confirmation of this funding mechanism.
Furthermore, construction costs for undergrounding projects continue to escalate, and postponing the Project would likely increase the overall cost and funding gap. The Project is fully designed, coordinated with utilities, and ready for construction, meaning delays could result in redesign costs, additional coordination efforts, and potential loss of favorable bid pricing.
Finally, the Project delivers important long-term public benefits, including improved safety through the removal of overhead lines, enhanced utility reliability, and aesthetic improvements along a key corridor. When weighed against the risk of losing available funding and incurring higher future costs, moving forward now represents a prudent and time-sensitive investment.
The proposed Budget Amendment Number 26.061 will amend the current CIP to:
1. Include the remaining $2,364,955 of PG&E Rule 20A credits; these remaining funds must be used prior to the spending deadline on December 31, 2033.
2. Include $1,643,749 as the anticipated reimbursement from AT&T for its share of the joint trench work.
3. Include $1,576,480 as the anticipated reimbursement from Comcast for its share of the joint trench work.
4. Include $396,915 in Bicycle and Pedestrian Impact Fee (Fund 822); these are unallocated funds that can be used to support the Project’s pedestrian improvements such as corner curb extensions and safer crossings along Mission Road.
The proposed project expenses and budget are detailed below:
Purpose Estimated Costs
Design Budget $581,916.00
Construction Budget $7,691,200.00
PG&E’s Direct Project Costs $4,6000,000.00
Construction Management and Inspection $850,000.00
Miscellaneous (including staff time) $100,000.00
Total Expenses $13,8223,116.00
Funding Source Amount
Infrastructure Reserves $3,500,000.00
Gas Tax $355,845.42
PG&E Rule 20A Credit $4,000,000.00
Remaining PG&E Rule 20A Credit* $2,364,955.00
Reimbursement from AT&T* $1,643,749.00
Reimbursement from Comcast* $1,576,480.00
Bicycle and Pedestrian Impact Fee Fund* $396,915.00
Total Project Budget $13,837,944.42
*Budget Amendment Number 26.061.
RELATIONSHIP TO PRIORITIES ACTION PLAN
Approval of this action will contribute to the City Council’s Priorities Action Plan Major Focus Area of Quality of Life by maintaining and improving infrastructure to serve the public.
CONCLUSION
Awarding the construction contract to JDB and Sons Construction, Inc. of San Francisco, California, for the Mission Road Underground Utility District will improve public safety and enhance the reliability of electric, telephone, and cable services.
Attachments:
1. Project Location Map
2. Overview of City’s Procurement Process