ADMINISTRATIVE COMMITTEE
5.	CONSIDER expenditure of Budgeted Funds for CONTRACT AMEMDMENT WITH ZIM INDUSTRIES FOR ASR WELL EQUIPMENT INSTALLATION
Meeting Date:		March 11, 2013	Budgeted:	Yes
From:		David J. Stoldt,	Program/	Water Supply
		General Manager	Line Item No.:	1-2-1 A 1
Prepared By:		Joe Oliver	Cost Estimate:	$247,000 ($90,000 Reimbursed)
General Counsel Review: NA
Committee Recommendation: The Administrative Committee reviewed this item on March 11, 2013 and recommended __________________.
CEQA Compliance: N/A

SUMMARY: The ASR-1 well at the Monterey Peninsula Water Management District (MPWMD or District) Santa Margarita (Water Project 1) Aquifer Storage and Recovery (ASR) site is currently not operable due to an equipment failure in late 2012 while the well was in service to supply water to the California American Water (Cal-Am) delivery system. It was intended that the needed repairs would be made by Cal-Am under our ASR Management & Operations agreement. However, since it has been determined that the needed repairs will be more extensive than earlier anticipated, and that the existing pump, motor and well internal piping are scheduled for upgraded permanent equipment replacement in the Fiscal Year 2012-13 budget, staff is recommending that MPWMD proceed at this time with the procurement and installation of the permanent equipment upgrade for the ASR-1 well. The estimated cost for the permanent equipment upgrade is $247,000 (including a contingency amount for unforeseen circumstances). MPWMD is currently under contract with Zim Industries Inc. (Zim) for well drilling and equipment installation work at the ASR-4 well at the Seaside Middle School ASR site. The planned equipment upgrade for the ASR-1 well will be the same as for the ASR-4 well, and this work at ASR-1 can be undertaken through a Change Order (contract amendment) with Zim. Due to the timing for advance ordering of needed materials, one component of this equipment upgrade may be procured under the District’s existing contract with Pueblo Water Resources if needed to reduce the delivery schedule. Because the District currently has work underway on the ASR-4 well, this will speed up the order and delivery schedule for the ASR-1 well equipment upgrade, so that this well can be back in service as quickly as possible this season.

RECOMMENDATION: District staff recommends that the General Manager be authorized to enter into a Change Order (contract amendment) with Zim Industries, Inc., the firm currently under contract with the District, to procure and install the ASR-1 well upgraded equipment. This work will be commenced within the $247,000 estimated installation cost if this item is approved along with the Consent Calendar. This amount includes a 5% contingency for unanticipated cost variations.

BACKGROUND: The ASR-1 well was the first ASR well constructed in 2001 as part of the District’s ASR feasibility testing program. At the time of its construction, the well was not specified with permanent operating equipment for two principal reasons: (1) the ASR feasibility testing program was in its infancy and did not warrant the additional expenditure at that time, and (2) certain power restrictions on the allowable size of the well’s pump and motor were in effect at the time of original construction, and these restrictions have since been removed by additional power upgrades completed at through contracts with Pacific Gas & Electric. The electricity delivery capacity in place in 2001 restricted the ASR-1 well to a 400-horsepower (hp) pump and motor. The permanent equipment upgrade will be for a 600-hp pump and motor, which will increase both the injection and extraction capacity of the ASR-1 well. Once this work is complete, all four ASR wells will be equipped with similar pumping capacity equipment and the motors will be interchangeable between wells if needed.

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. This current planned work to upgrade the ASR-1 well to permanent equipment is consistent with the District’s planning and budget for the ASR project. Subsequent to the assessment of the ASR-1 well’s existing equipment that was pulled from the well last month, MPWMD and Cal-Am staff have been coordinating to make a determination that it is in our mutual best long-term interests to proceed now with procurement of the ASR-1 upgraded equipment, rather than to have Cal-Am purchase and replace the worn parts of the existing equipment, which would not be a permanent solution. Accordingly, MPWMD and Cal-Am have agreed that to be consistent with the terms of our ASR Management & Operations agreement, the MPWMD will procure and install the new upgraded equipment, and Cal-Am will subsequently reimburse MPWMD for the cost that Cal-Am would have incurred to repair/replace the needed components of the existing equipment. The cost for the repair to the existing equipment is currently awaiting finalization by Zim, but is estimated to be approximately $90,000. Accordingly, MPWMD will invoice Cal-Am for this equipment repair, once the actual repair cost has been finalized and the well upgrade work has been completed. The estimated amount to be funded by the District is $157,000, which is the difference between the new equipment upgrade estimate ($247,000) and the existing equipment repair estimate ($90,000). Funding for this work is included under Line Item 1-2-1 1 c of the FY 2012-2013 budget.

EXHIBITS

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