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Daly City Council awards $179.85 million contract to build Vista Grand drainage project
Summary
The council unanimously approved a $179.85 million construction contract to replace aging canal and tunnel infrastructure in the Vista Grand drainage basin, a multi‑benefit stormwater, water‑quality and resilience project estimated to finish in late 2029.
Daly City officials on March 9 awarded the largest construction contract in the city’s recent history to Shimik Construction Co. Inc. to build the Vista Grand Drainage Basin Improvement Project, a multi‑benefit program that will replace an aging canal and a century‑old tunnel and add treatment, storage and wetland features to improve water quality and coastal resilience.
City staff told the council the work will replace roughly one‑third of the open canal, remove and reconstruct the old brick‑lined tunnel under Fort Funston and build a new outlet structure farther from an eroding bluff. Staff estimated construction would take about 30 months, with completion projected around December 2029.
The council’s action followed staff presentations that included a technical overview of the tunnel‑boring approach, geotechnical and seismic design considerations, staging plans at Fort Funston and a financing update. Staff said the bid process drew three qualified proposals; the low, responsible bid of $179,850,000 from Shimik (with Drilltech as the tunneling subcontractor) was recommended for award. The recommended package includes tunneling, canal replacement, an upgraded diversion and box culvert and on‑site stormwater improvements.
City staff described the tunneling approach as a single pass in which a mechanized boring/shield machine demolishes the existing liner and constructs the new bore behind it. Staff also said they had completed geotechnical investigations, designed for expected fault‑related movement in a short fault crossing, and planned a deep, roughly 30‑foot‑diameter shaft and conveyor system to remove spoil. Engineers in the meeting said some of the recovered sand and brick 'muck' will be reused where appropriate and that reuse options are being coordinated with regional partners.
Council members pressed staff on worker sourcing and environmental controls. Council Member Manalo confirmed the contractor will follow the city’s community workforce/prevailing‑wage requirements; staff said the bidders included unions and local labor provisions in their proposals. Council members also asked about reuse of spoil and the project’s effect on Lake Merced; staff replied that diversion features should restore some lake turnover and improve water quality over time.
On financing, the city said the project is funded through a mix of already‑approved grants, partner contributions (including regional water agencies and the sanitation district), state loans and other financing mechanisms. Staff noted $7 million in approved grants, more grant applications pending and more than $50 million in partner contributions committed to the program; the city is also using state revolving fund and federal WIFIA credit structures in the financing plan.
Council voted unanimously to award the contract. Council Member Jesseline Manalo moved the award and Council Member Pam Diovani seconded; the roll call recorded all members present voting in favor. The city will return to the council for ministerial contract execution and preconstruction scheduling.
The project is the centerpiece of a long‑running regional effort to manage stormwater, reduce pollutant loads to Lake Merced and the Pacific Ocean, and add local water supply and recreation benefits in a coastal corridor where bluff erosion has exposed outlet infrastructure.
