REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Scott M. Haberle, Fire Chief
PREPARED BY: Steve Eros, Deputy Fire Marshal Patrick Bannon, Capital Projects Administrator Janice Van Mullem, Fire Marshal
Subject:
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Approve and authorize execution of Amendment No. 1 with Excalibur Well Services, Corp; approve additional funding and appropriation of funds for the Civic Center Oil Well Abandonment Project
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Statement of Issue:
The City of Huntington Beach Fire Department (HBFD) and the Public Works Department have been working with Walker Engineering, Inc on the abandonment of oil wells at the Civic Center and is requesting an additional $1,150,000 to complete the Project. During the abandonment of Civic Center #2, the abandonment contractor (Excalibur Well Services, Corp.) discovered that the down-hole conditions did not match Cal-GEM’s as-built records for the well. The limited well file led to multiple delays in the project and the need to increase Excalibur’s scope to ensure the oil well was abandoned per Cal-GEM standards. As of September 24, 2024, the cost to abandon Civic Center #2 is $1,155,774.16 and HBFD anticipates that similar conditions exist in both Civic Center #1 and #3. In anticipation of the increased scope of work, HBFD is requesting an additional $1,150,000 in funding to complete the abandonment project and amend the Excalibur Well Services, Corp agreement.
Financial Impact:
Staff is requesting an appropriation of $1,150,000 in HB Recovery Funds to business unit 31465001.82800 to cover the remaining estimated costs of the project.
Recommended Action:
recommendation
A) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Service Agreement between the City of Huntington Beach and Excalibur Well Services, Corp. for Civic Center Well Abandonment;” and,
B) Approve an appropriation of $1,150,000 from HB Recovery Funds to the Oil Well Abandonment business unit 31465001.82800.
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Alternative Action(s):
Do not approve, and direct staff accordingly.
Analysis:
The Civic Center #2 oil well abandonment presented unique challenges that were not envisioned in the original request for proposal and subsequent proposal submitted by Excalibur Well Services, Corp. In 2000, the well was equipped with an inner liner, however details are limited as to what led to this installation and the means in which the liner was installed. As a result, additional challenges were later identified, leading to a necessary modification to the Project scope of work.
The change in scope has led to this request for additional funds $1,150,000 ($1,000,000 plus 15% contingency) for abandonment of Civic Center #1-3. Approval of this additional funding and amendment of the existing Excalibur Well Services, Corp. Agreement will allow for the Civic Center Oil Well Abandonment Project to proceed.
Environmental Status:
The requested action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Furthermore, since the proposed well abandonment and lease restoration activities are considered ministerial, the project is statutorily exempt from CEQA in accordance with Section 15268 of the CEQA Guidelines. The contractor will obtain permits from the California Geologic Energy Management Division (Cal-GEM) consistent with applicable requirements.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Amendment No. 1 to Service Agreement Between the City of Huntington Beach and Excalibur Well Services, Corp. for Civic Center Well Abandonment
2. Service Agreement between the City of Huntington Beach and Excalibur Well Services Corp. for Oil Well Abandonment