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: Bonnie To, Principal Management Analyst Patrick Bannon, Capital Projects Administrator
Subject:
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Approve and authorize execution of Amendment No. 1 to the American Integrated Services, Inc. agreement for the Miley Keck Tank Farm Lease Closure and approve an appropriation of $241,039
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Statement of Issue:
In February 2024, staff requested Council authorization to execute three (3) contracts related to the well abandonment and lease restoration project and approve an appropriation of $1,236,763 in HB Recovery Funds.
During the oil well abandonment process, additional costs have been identified in the amount of $209,599 plus 15% contingency of $31,440. This brings to total budget request to $241,039 for the Miley Keck Tank Farm Lease Closure. Therefore, staff is requesting City Council approval and authorization to amend the agreement with American Integrated Services, Inc. for the Miley Keck Tank Farm Lease Closure, and to approve an appropriation of $241,039 from HB Recovery Funds.
Financial Impact:
Staff is requesting an appropriation of $241,039 from HB Recovery Funds for the Miley Keck Tank Farm Lease Closure. Additional contingency funding may be needed in the future depending on the progress of the work related to the project.
Recommended Action:
recommendation
A) Approve and authorize Mayor and City Clerk to execute Amendment No. 1 to the American Integrated Services, Inc. agreement for the Miley Keck Tank Farm Lease Closure, in the amount of $149,599 plus a 15% contingency; and,
B) Approve an appropriation of $241,039 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:
As the oil well managers, the Fire Department prepared three (3) bids for services to abandon the wells, remove the equipment and piping, and restore the well site at Civic Center and the Miley Keck Tank Farm (MKTF) to California Department of Conservation, Geologic Energy Management (CalGEM) standards.
In February 2024, staff requested Council approval and authorization to execute three (3) contracts Oil Well Abandonment, Civic Center Lease Closure, and Miley Keck Tank Farm Lease Closure, along with an appropriation of $1,236,763 in HB Recovery Funds for the Project.
As stated in February 2024, additional contingency funding may be needed in the future depending on the progress of the work for the three projects.
Currently, during the oil well abandonment process, additional funding is needed in the amount of $209,599 plus 15% contingency of $31,440, bringing the total budget request to $241,039 for the Miley Keck Tank Farm Lease Closure. Therefore, staff is requesting City Council approval and authorization of an amendment to the American Integrated Services, Inc. agreement for the Miley Keck Tank Farm Lease Closure and approval of an appropriation of $241,039 from HB Recovery Funds.
The additional funding would be split as follows: amendment to the American Integrated Services, Inc. contract in the amount of $149,599 plus a 15% contingency of $22,400, which would increase the existing agreement by $172,039, and an allocation of $69,000 ($60,000 plus a 15% contingency) for additional as-needed general environmental engineering services related to the Miley Keck Tank Farm Lease Closure process. Therefore, the total appropriation is $241,039 ($172,039 plus $69,000).
Environmental Status:
The requested action to approve a contract award for well abandonment and lease restoration 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 for which the contract is being awarded, is statutorily exempt from CEQA in accordance with Section 15268 of the CEQA Guidelines. The awarded contractor will obtain permits from the California Geologic Energy Management Division (Cal-GEM) consistent with applicable requirements.
Strategic Plan Goal:
Non Applicable - Administrative Item
For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>.
Attachment(s):
1. American Integrated Services, Inc. Amendment
2. American Integrated Services, Inc. Change Order Request