ADMINISTRATIVE COMMITTEE
10.	AUTHORIZE expenditure of Budgeted Funds for COMPLETION OF INTERIM FACILITES AT PHASE 2 AQUIFER STORAGE AND RECOVERY SITE (WATER PROJECT 2)
Meeting Date:		July 11, 2011	Budgeted:	Yes
From:		Darby Fuerst,	Program/	Water Supply
		General Manager	Line Item No.:	1-2-1 B. 1
Prepared By:		Joe Oliver	Cost Estimate:	$198,260 (Cal-Am reimbursable)
General Counsel Review: NA
Committee Recommendation: The Administrative Committee considered this item on July 11, 2011 and recommended _______________.
CEQA Compliance: N/A

SUMMARY: The Board will consider approval of budgeted funds for completion of interim facilities at the Seaside Middle School Aquifer Storage and Recovery (ASR) site. Completion of this work will facilitate eventual development of a full two-well permanent ASR project expansion at this site (also known as Phase 2 ASR or Water Project 2). The Monterey Peninsula Water Management District (MPWMD or District) is working with California American Water (Cal-Am) on development of the first ASR well at the Seaside Middle School ASR site as part of Cal-Am’s compliance with requirements in State Water Resources Control Board (SWRCB) Order 2009-0060 (Cease and Desist Order or CDO) regarding near-term implementation of a small water supply project to reduce Carmel River water diversion-related impacts. Cal-Am recently completed the easement-acquisition process for this site from the Monterey Peninsula Unified School District.

The MPWMD and Cal-Am have entered into a cost reimbursement agreement for development of this new ASR well project, and the initial well construction was completed in late 2010. The next step in project implementation is to complete certain well and site improvements so that the new well can be operated during the upcoming Water Year (WY) 2012 injection period, which begins December 1, 2011 (subject to the availability of excess Carmel River bypass flows). The needed improvements include: (a) installation of Pacific Gas & Electric (PG&E) service equipment and intertie to the PG&E grid, (b) purchase of electrical metering, switchgear and shielded cable for the new well motor, (c) installation of the electrical equipment, and (d) construction of site security fencing. This work breakdown is provided in more detail in the budget recommendation letter from the MPWMD’s technical consultant on the project, Pueblo Water Resources (Exhibit 10-A).

It should be noted that although this work is being conducted in order to allow operation of the new ASR well at the site on an interim basis while the full site is still in design and development, the specified equipment and design for this planned work have been selected to facilitate the permanent site specifications to the extent possible, thereby minimizing the expenditure of funds redundantly. The proposed work is included in the District’s Fiscal Year 2011-12 budget as Cal-Am reimbursable costs. The Board’s authorization of this item is with the understanding that the District will incur these costs and subsequently invoice Cal-Am under the above-referenced reimbursement agreement. The District has recently received payment from Cal-Am under this agreement for costs incurred during initial construction of the new ASR well in 2010.

RECOMMENDATION: District staff recommends authorization for expenditure of budgeted funds up to the engineer’s estimated total cost for this work of $198,260 (Exhibit 10-A). This estimate includes a 15% contingency for unanticipated items or cost variations in the estimates. Staff is currently preparing bid notice documents for the necessary equipment and construction services. If this item is approved, staff expects to proceed with awarding contracts and authorizations for the required work components to qualified successful bidders and vendors.

IMPACT TO STAFF/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. The District and Cal-Am are in the process of expanding that level of effort with the implementation of this next phase of ASR expansion in the basin. Initiation of the Phase 2 ASR expansion is an ongoing significant staff commitment, as reflected in the District’s Strategic Plan. Funds for this work are included in the MPWMD FY 2011-12 budget under Line Item 1-2-1 B. 1 (adopted June 20, 2011).

BACKGROUND: In August 2008, the District began discussions with the Monterey Peninsula Unified School District (MPUSD) for potential use of an unused portion of the Seaside Middle (formerly Fitch) School property for potential expansion of the ASR program (i.e., Phase 2 ASR Project). In October 2009, the District drilled an exploratory borehole and constructed a monitor well array at the site. This work confirmed that the site would be suitable for drilling a full-scale ASR test well. The next step in development of this project was to construct and test a full-scale ASR well at the site. The purpose for completing the planned work to allow full operation of this new well on this accelerated schedule is to satisfy the time requirement in the SWRCB CDO (i.e., small project implementation within 24 months of the October 20, 2009 CDO adoption). If this proposed work cannot be completed in a timely manner, the well will not be ready for injection operations in December 2011 and the SWRCB CDO time requirement will not have been met.

Assuming successful completion the proposed work to activate the new Seaside Middle School ASR well, it is planned to continue development of this site into a permanent ASR facility, similar to the existing Santa Margarita (i.e., Phase 1 ASR or Water Project 1) site that is located approximately 1,000 feet to the southeast of the Seaside Middle School site. This will entail completion of the necessary engineering designs, environmental review, permitting and construction of permanent facilities, including: (a) a second full-scale ASR well, (b) permanent utility pipelines, (c) permanent electrical facilities and control building, and (d) a backflush percolation system. The schedule that was developed by the District calls for completion of the permanent facilities at this site in December 2013. However, the actual site development schedule is not certain at this time, and is subject to a variety of factors including: funding availability, approval of site development costs to Cal-Am through the California Public Utilities Commission, and diversion source water availability. Cal-Am and MPWMD are continuing to work closely on these issues to facilitate timely full project completion.

EXHIBITS

10-A July 11, 2011 Budget Recommendation Letter from Pueblo Water Resources, Inc.

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