ITEM:		CONSENT CALENDAR
3.	CONSIDER EXPENDITURE OF BUDGETED FUNDS FOR PURCHASE OF INJECTION EQUIPMENT FOR THE PHASE 1 ASR PROJECT
Meeting Date:			October 15, 2007	Budgeted:	Yes
From:			David A. Berger,	Program/	Water Supply Projects
			General Manager
Prepared By:			Joe Oliver	Line Item No.:	1-2-1 A -- Account No. 4-04-7860.04
				Cost Estimate:	$87,163
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee considered this item on October 4, 2007 and recommended approval.
CEQA Compliance: N/A

SUMMARY: As part of the Phase 1 Aquifer Storage and Recovery (ASR) Project, Monterey Peninsula Water Management District (District) consultants and staff have been preparing project plans for construction of permanent ASR facilities at the District’s Phase 1 ASR site off of General Jim Moore Boulevard in Seaside. One of the required permanent facilities is a downhole “Flow Control Valve” (FCV) and associated operating equipment for the newly-constructed ASR No. 2 well. This FCV, which will be installed within the ASR No. 2 well, is a specially-designed valve that controls the flow of water into the well, to prevent lost well performance and potential well clogging due to air or particle entrainment during injection operations. A similar FCV is also installed in the District’s existing ASR No. 1 well, and has been in use successfully for the past five years.

Currently, Baski, Inc. is the only known active manufacturer of downhole FCV’s for ASR operations in the United States. The price quote from Baski, Inc. for the FCV specifically-sized for the ASR No. 2 well is $78,875 (Exhibit 3-A). The projected lead time for manufacturing this FCV is 3 to 3 ½ months, so time is of the essence for placing the order and getting the equipment installed so that injection testing can be conducted at the new ASR No. 2 well during the upcoming Water Year 2008 injection season.

RECOMMENDATION: District staff recommends that the General Manager be authorized to expend budgeted funds to purchase and ship the FCV for ASR Well No. 2, for a not-to-exceed payment of $78,875 to Baski, Inc. Also, it is recommended that an additional 10% of the cost ($7,887) be held as contingency to be used only in the event of unforeseen circumstances regarding any complications that could arise upon installation. This would negate the need to delay installation until additional Board authorization can be executed, should there be the need for any contingency expenditure. The Administrative Committee considered this matter at its October 4, 2007 meeting and voted 2 to 0 to recommend approval of an expenditure up to $86,763. Subsequent to the Committee’s review, it was determined that this price includes taxes and packing of the FCV, but not shipping to the ASR site. Accordingly, the $400 shipping fee has been added to the total cost estimate shown above.

BACKGROUND: The District has been pursuing the Phase 1 ASR Project since 2004. During that time, the District undertook an extensive effort in engineering and planning studies for the project, culminating in the Board’s adoption of a certified Environmental Impact Report / Environmental Assessment on August 21, 2006. Subsequently, the U.S. Army granted a Right-of-Entry to the District for the Phase 1 ASR site expansion on September 19, 2006, and the City of Seaside issued a Conditional Use Permit for the site expansion on October 11, 2006. Drilling and construction of the new ASR No. 2 well at the site was completed in April 2007. The purchase and installation of the downhole FCV is necessary prior to initiating injection testing at the ASR No. 2 well during the upcoming recharge season. The FCV operates under high pressure to regulate the flow of water into the ASR well, and is therefore comprised of precision parts meant to withstand many years of use. The FCV is approximately 20 feet in length, and fabricated from Stainless Steel 316 and reinforced rubber elements.

IMPACT ON STAFF AND RESOURCES: A significant staff effort has been expended in planning, coordinating, analyzing and overseeing work on the District’s ASR testing program in the Seaside Basin. It is expected that this level of effort will continue to expand with implementation of the Phase 1 ASR Project during FY 2007-2008. Budgeted amounts to allow purchase and installation of the FCV under this item are included in the District’s FY 2007-2008 budget (Goal: Augment Water Supply, Water Supply Projects, Objective 1-2-1 Evaluate non-dam alternatives, A. Seaside Basin ASR Project, page 16 of June 18, 2007 adopted budget). While the budgeted expenditures are offset by bond proceeds on the revenue side of the budget, the debt issuance has not yet taken place so these ASR expenditures are temporarily being funded from reserves.

EXHIBITS

3-A September 25, 2007 letter from Baski, Inc.

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