BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Receive Report of Bids, Ratify Addenda, Approve the Contingency Fund, and Award the Construction Contract to Hanford Applied Restoration & Conservation for the Federal Energy Regulatory Commission Order Compliance Project Live Oak Restoration Reach Project, Project No. 91864005, Contract No. C0726 in the sum of $3,829,918.75 (Morgan Hill, District 1).
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RECOMMENDATION: Recommendation
A. Ratify Addenda Nos.1 and 2 to the Contract Documents for the FERC Order Compliance Project (FOCP) Live Oak Restoration Reach Project;
B. Award the Construction Contract to Hanford Applied Restoration & Conservation, located in Petaluma, California, in the sum of $3,829,918.75; and
C. Approve a contingency sum of $574,487.81 and authorize the Chief Executive Officer or designee to approve individual change orders up to the designated amount.
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SUMMARY:
The Live Oak Restoration Reach Project (Project) serves as compensatory mitigation for impacts associated with other Federal Energy Regulatory Commission (FERC) Order Compliance Projects “FERC Project No. P-5737-007 (FOCP).”
The Project will enhance steelhead (Oncorhynchus mykiss) spawning and rearing habitat along an approximately 2,600-foot section of Coyote Creek, extending from the Coyote discharge line (CDL) outlet on the South Channel downstream along the Live Oak Area of Anderson Lake County Park. Project features such as spawning gravel augmentation sites, large woody debris and boulder placement, and vegetated gravel bars will enhance approximately 2.6 acres of creek habitat.
Project construction is expected to take approximately seven (7) months to complete. In-channel work will be limited to the dry season, from June 15, 2026, through October 15, 2026. A map of the Project location is shown on Attachment 1.
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Federal Energy Regulatory Commission (FERC) Order Compliance Project (FOCP) as a result of the February 20, 2020, directive from the FERC to implement interim risk reduction measures at Anderson Dam. In addition to lowering the reservoir at Anderson Dam to its lowest point, Valley Water collaborated with environmental regulatory agencies to develop measures to mitigate the impacts of the lowered reservoir.
The Live Oak Restoration Reach Project restores aquatic habitat within Coyote Creek, directly downstream of Anderson Dam at Live Oak Park. This Project was identified in the FOCP Habitat Mitigation and Monitoring Plan and designated as a mitigation project to address the potential effects of reservoir dewatering and sediment deposition on steelhead spawning and rearing habitat associated with the FOCP and subsequent Anderson Dam Seismic Retrofit Project.
Addenda Ratification
Two (2) addenda (Attachment 2) were issued during the bid advertisement period to clarify the Project Contract Documents and answer bidders’ questions. To formally incorporate the addenda into the Project Contract Documents, staff recommends that the Board ratify the addenda.
Contract Award
Due to the sensitive nature of the work and specialty construction related to fish habitat creation and natural channel construction, staff concluded that the Project meets the requirements of Valley Water’s process for “Contractor Prequalification Determination for CIP Projects.” Pre-qualification of Bidders for the Project was conducted in compliance with Public Contract Code Section 20101.
The bidder prequalification process was conducted in November 2025 and completed in February 2026. As a result of that process, five firms were prequalified to proceed to bid and were notified. Only the prequalified contractors were eligible to submit bids for the Project.
A report of bids received at the bid opening for the Project on May 13, 2026, is summarized in Table 1.
Table 1: Bid Summary
|
Contractor, Location |
Bid Price |
Award Amount |
|
Hanford Applied Restoration & Conservation, Petaluma, CA |
$3,829,918.75 |
$3,829,918.75 |
|
Mountain Cascade, Inc., Livermore, CA |
$4,666,519.00 |
|
|
A. Teichert & Son, Inc., Pleasanton, CA |
$4,799,080.00 |
|
|
Granite Rock Company, San Jose, CA |
$5,686,341.00 |
|
|
Engineer’s Estimate: |
$5,536,760.70 |
Of the four (4) total bids submitted, the lowest responsive bid was submitted by Hanford Applied Restoration & Conservation of Petaluma, California. The bid submitted by Hanford Applied Restoration & Conservation is approximately 19% lower than the average of the bids received and 31% lower than the Engineer’s Estimate.
The bid submitted by Hanford Applied Restoration & Conservation was substantially lower than the other three bids received. The difference can be attributed to non-standard material sourcing. These methods may include alternative suppliers, locally sourced materials, existing supplier networks, and other cost-efficient procurement practices that reduce transportation, handling, and material acquisition costs while still meeting project specifications and quality requirements.
In addition, the Contractor’s expertise and extensive experience completing similar restoration and conservation projects throughout California likely contributed to a more competitive pricing structure.
Staff reviewed the bid proposals and deemed the bids responsive and recommends that the Board award the Construction Contract to Hanford Applied Restoration & Conservation as the responsible bidder submitting the lowest responsive bid.
Contingency Funds
The Contract award sum for the Project is $3,829,918.75. To allow staff to quickly address unforeseen or changed site conditions and other unanticipated occurrences, without causing unnecessary delays or consequential costs to the Project, staff recommends that the Board approve encumbering a contingency amount of $574,487.81 (15% of the contract amount) for the subject Project.
The contingency amount described above was estimated due to known and unknown risks, such as:
1. Unanticipated variances in quantities and cost of various lump sum items estimated in the Bid Proposal;
2. Unforeseen or differing site/field conditions that may be significantly different from the baseline or as-built information used in the preparation of Project Contract Documents; and,
3. Coordination issues and risks associated with weather conditions and unplanned water releases in the channels that may pose construction delays.
Approval of individual change orders for the Project will be subject to approval at the following designated amounts:
Engineering Unit Manager: $100,000
Deputy Operating Officer: $300,000
Chief Operating Officer: $400,000
Assistant CEO: $500,000
CEO: Up to the total amount of the contingency
Relevant Prior Board Actions
On June 23, 2020, the Board adopted a resolution approving the Engineer’s Report, approved the CEQA Exemption determination for the FOCP, and approved the Project.
On October 10, 2023, the Board approved Agreement No. A4932A with Stillwater Sciences for planning and permitting services to provide creek restoration modeling and design support for Project conservation measures, federal Endangered Species Act Section 7 consultation for fisheries resources, biological monitoring of fisheries resources for FERC Order Compliance Project environmental compliance, and general environmental support services for fisheries resources topics, as needed.
On June 24, 2025, the Board approved Amendment No. 1 to Agreement No. A4932A with Stillwater Sciences for continued support on regulatory permitting and compliance for the Anderson Dam Seismic Retrofit Project and FOCP.
On April 14, 2026, the Board adopted the plans and specifications and authorized advertisement for bids for the construction of the FOCP Live Oak Restoration Reach Project.
Outreach to Bidders
The Notice to Bidders was made available through Valley Water's Vendor Portal in PlanetBids exclusively to the prequalified contractors for the Live Oak Restoration Reach Project. The prequalified contractors were posted in February 2026.
The following five contractors were prequalified: (1) A. Teichert & Son, Inc.; (2) Granite Rock Company; (3) Ground Control, Inc.; (4) Hanford Applied Restoration & Conservation; and (5) Mountain Cascade, Inc.
Small Business Program
The Project was advertised incorporating the Small Business Enterprise (SBE) Outreach Program that establishes a small business subcontracting participation goal of at least 30 percent for non-SBE Bidders. The contractor met the goals of the program by demonstrating compliance through the Good Faith Effort process.
Right of Way
This Project will be constructed within Valley Water’s existing rights-of-way, the City of Morgan Hill rights-of-way, and County of Santa Clara rights-of-way.
Staff is working with the County of Santa Clara to obtain a lease agreement for the Live Oak Picnic Area. The County of Santa Clara anticipates executing this agreement by June 1, 2026. The Live Oak Picnic Area will be closed starting June 1, 2026, and will reopen following completion of the Anderson Dam Seismic Retrofit project.
Permits
Environmental permits and other approvals necessary for the construction of the Project are included in the contractor bid package. Permits already obtained for the project include:
• U.S. Fish and Wildlife Service, Biological Opinion
• National Marine Fisheries Service Final Biological Opinion
• Section 106 National Historic Preservation Act Compliance
• State Water Resources Control Board, 401 Water Quality Certification/Waste Discharge Requirements
• California Department of Fish and Wildlife (CDFW), Lake and Streambed Alteration Agreement (LSAA)
• Valley Habitat Plan Certificate of Compliance
• Santa Clara County Parks and Recreation Department Memorandum of Understanding
• CDFW LSAA Major Amendment covering construction of the LORRP Plan
The following approvals are still pending:
• U.S. Army Corps of Engineers, 404 Permit Modification
o Receipt of permit is expected to be received prior to issuing the Notice to Proceed. There are no unknown permit conditions.
• SWRCB approval of the LORRP Plan in partial fulfillment of the FOCP Habitat Mitigation and Monitoring Plan
The Contractor will be required to obtain encroachment permits from the City of Morgan Hill and the County of Santa Clara for use of the public right-of-way for hauling and traffic control.
Public Outreach
Staff has coordinated with the County of Santa Clara for the planned implementation of the Project.
Prior to construction, Valley Water will inform the surrounding neighborhood about the upcoming Project and potential construction impacts. A mailer and social media posts will be used to reach out to neighbors, and construction site signage will be installed at the Project site. Project construction and updates will be shared at Anderson Dam public meetings.
Residents, commercial businesses, and visitors will be informed of potential temporary impacts, as appropriate. Construction contract documents include requirements and measures to minimize impacts during the construction.
Next Steps
If the Board approves the recommendations, staff will proceed with contract administration managed by Valley Water staff to facilitate the construction of the Project, which is anticipated to begin in June 2026 and be completed by December 2026. The Project Delivery Process Chart (Attachment 3) highlights the current Project phase and the staff recommendation before the Board.
ENVIRONMENTAL JUSTICE IMPACT:
There are no environmental justice impacts associated with the Live Oak Restoration Reach Project. This action will not result in disproportionate impacts on any specific communities relative to the general population from the implementation of this project.
FINANCIAL IMPACT:
The Live Oak Restoration Reach Project is part of the Anderson Dam Seismic Retrofit Project, Project No. 91864005, and is included in the Capital Improvement Program (CIP) Fiscal Years (FY) 2026-30 Five-Year Plan and in the FY 2025-26 (FY26) Adopted Budget. There are adequate funds in the Project FY 2026-27 Adopted Budget to encumber construction expenditures for Project construction. The total cost for the recommended construction contract, including the change order contingency of $574,487.81, is $4,404,406.56, which does not increase the overall Total Project Cost (TPC) reflected in the CIP 2026-30 Five-Year Plan.
The ADSRP may receive up to $54.1 million from the renewed Safe, Clean Water & Natural Flood Protection Program (Fund 26), with the remainder of the total project cost funded by the Water Utility Enterprise Fund (Fund 61), with 81.7% of the costs allocated to North County Zone W-2, 7.5% to South County Zone W-5, and 10.8% to South County Zone W-7.
The Live Oak Restoration Reach Project is receiving $80,000 from the Fish Habitat Improvement Project, Project No. 26042002, within the Safe, Clean Water and Natural Flood Protection Program’s Project D4: Fish Habitat and Passage Improvement. This funding supports key performance indicator (KPI) #5 “Complete five (5) habitat enhancement projects based on studies that identify high-priority locations for large wood, boulders, gravel, and/or other habitat enhancement features.”
CEQA:
The Project is part of the mitigation strategy for impacts of the FOCP and supports the implementation of the FOCP Habitat Mitigation and Monitoring Plan. Since the project serves as a mitigation to offset FOCP impacts, implementation of the LORRP is required to help complete the FOCP. CEQA provides a statutory exemption for emergency projects, which includes specific actions necessary to prevent or mitigate an emergency (Public Resources Code §21080(b)(4) and CEQA Guidelines §15269(c)). After analysis of the facts and applicable law, on June 23, 2020, following a public hearing, the Board determined that the FOCP, inclusive of the Live Oak Restoration Reach Project, qualifies for the statutory exemption for emergency projects. Valley Water filed a Notice of Exemption for FOCP with the County of Santa Clara Clerk/Recorder on June 29, 2020. Valley Water subsequently filed a Notice of Exemption specifically for the Live Oak Restoration Reach Project on April 16, 2026.
ATTACHMENTS:
*Attachment 1: Project Map
*Attachment 2: Addendum No. 1 and 2
*Attachment 3: Project Delivery Process Chart
UNCLASSIFIED MANAGER: Manager
Ryan McCarter, 408-630-2983