REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, Acting City Manager
VIA: Eric McCoy, Fire Chief
PREPARED BY: Steve Eros, Deputy Fire Marshal Patrick Bannon, Capital Projects Administrator
Subject:
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Approve and authorize execution of Amendment No. 2 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 Huntington Beach Fire Department (HBFD) and the Public Works Department have been working on the abandonment of oil wells at the City Center and is requesting an additional $498,500 to complete the Project. During the abandonment of Civic Center #2, the abandonment contractor, Excalibur Well Services, Corp. (Excalibur) discovered that the down-hole conditions did not match Cal-GEM’s as-built records for the well. Updating the well’s history led to multiple delays in the project and the need to increase Excalibur’s scope to ensure the oil well was abandoned properly. The same conditions exist in Civic Center #1, but the strategies applied during the abandonment of Civic Center #2 have been applied to shorten the timeline for abandonment. The HBFD is requesting $498,500 to complete this portion of the abandonment project.
Financial Impact:
Staff is requesting an appropriation of $498,500 in HB Recovery Fund to Business Unit 31465001.82800 to cover the remaining cost of the project.
Recommended Action:
recommendation
A) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 2 to Service Agreement between the City of Huntington Beach and Excalibur Well Services, Corp. for Civic Center Well Abandonment;” and
B) Approve an appropriation and transfer of $498,500 in HB Recovery Funds to Oil Well Abandonment business unit 31465001.82800.
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Alternative Action(s):
Do not approve, and direct staff accordingly.
Analysis:
In February 2024, the City Council approved a contract with Excalibur Well Services, Corp. (Excalibur) for the abandonment of Civic Center Wells #1, #2, and #3. In October 2024, the City Council approved additional funding for Excalibur to address unforeseen down-hole conditions that extended the scope and timeline for the abandonment of Civic Center Well #2. These conditions were required to be managed in accordance with Cal-GEM regulations, which contributed to the delay in the project timeline. The original contract was based on a time-and-materials agreement, and as a result, the extended timeline has led to an increase in project costs.
Down-hole operations for Civic Center Well #2 were successfully completed in December 2024, with work on Civic Center Well #1 commencing immediately afterward. Currently, Civic Center Well #1 is 20 days into the abandonment process, with an anticipated completion date of the end of January. The methodologies employed during the abandonment of Civic Center Well #2 will also be applied to remaining wells #1 and #3.
The change in scope and timeline has led to the request for additional funds of $498,500 to complete the abandonments of Civic Center #1 and #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. This amount does not include the Miley Keck Tank Farm scope.
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. 2 to Service Agreement Between the City of Huntington Beach and Excalibur Well Services, Corp. for Civic Center Abandonment
2. Agreement and Amendment No. 1