To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Heather Justus, P.G., Water Resources Program Analyst
Title
Resolution Ratifying Emergency Change Order No. 3 with Hydro Resources - Rocky Mountain, Inc. for Casing Off of the Upper 750 Feet of the Founders Arapahoe Well CR-227 [East of Matney Park, along Lantern Circle]
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water is seeking Town Council ratification of an emergency change order (Attachment A) to the construction contract (Resolution 2018-004 (Attachment B)) with Hydro Resources - Rocky Mountain, Inc. for the Founder’s Arapahoe Well CR-227 Drilling and Completion Project. The change order cost is $373,591.33, and will increase the project cost to $1,863,956.33. This change order is for emergency services that are reaming out the upper 750 feet of the hole and installing twenty-inch casing from below the surface casing, to a depth of 750 feet to stabilize the upper section of the hole. Staff requests that $49,036.50 of the originally approved ten percent Town-managed contingency of $149,036.50, remain intact for other purposes that may arise, for a total project authorization of $1,912,992.83. The emergency work, recommended by the Director of Castle Rock Water and authorized by the Town Manager with notification to council, began on May 24, 2018. The schedule for completing the emergency work and the project, if no other issues arise, is August 3, 2018. Assuming council ratifies the emergency change order, the total project costs for this project are provided in the below table.
|
Contracts |
Authorized |
Contingency |
Change Order |
Total Authorization |
Total Spent |
Remaining |
|
Dewberry |
$ 141,040 |
$ 14,104.00 |
$ (30,000.00) |
$ 125,144.00 |
$ 106,544.62 |
$ 18,599.38 |
|
Layne |
$ 1,740,384 |
$ 174,038.00 |
$ (294,701.90) |
$ 1,619,720.10 |
$ 1,419,323.54 |
$ 185,367.65 |
|
T Lowell |
$ 1,250,000 |
$ 124,508.00 |
$35,484.00 |
$ 1,374,508.00 |
$ 693,421.84 |
$681,086.16 |
|
Leonard Rice |
$ 78,200 |
$ 7,820.00 |
$ 35,790.00 |
$ 121,810.00 |
$ 81,093.15 |
$ 36,385.85 |
|
Dewberry |
$ 48,790 |
$ - |
|
$ 48,790.00 |
$ 3,470.00 |
$ 45,320.00 |
|
Misc. |
|
|
|
|
$ 20,380.17 |
|
|
Hydro Resources |
$ 1,490,365 |
$ 149,036.50 |
$373,591,.33 |
$ 1,912,992.83 |
$ 538,210 |
$ 1,374,782.83 |
|
Total |
|
|
|
$ 5,202,964.93 |
$ 2,862,443.32 |
$2,341,541.87 |
As Hydro - Resources advanced through the reaming process and entered the lost circulation zone, the upper 750 feet of the hole became unstable and is sloughing off onto the top of the drill bit. In order to maintain the integrity of the hole and effectively handle the lost circulation issues, we need to stabilize the hole by casing off the upper 750 feet of the hole. Through a review of the caliper logs and geophysical data, staff believes that once the upper section of the hole is cased off, Hydro Resources will be able to drill through the lost circulation zone and complete the well.
Town Council approved the Water Service Intergovernmental Agreement (IGA) with Dominion Water and Sanitation District (Dominion) on September 20, 2016 for shared use of infrastructure. As part of the Water Service IGA, Dominion will be paying the Town for all costs associated with the design and construction of the Founders Well Facility infrastructure and conversion of two existing wells at the Ray Waterman Regional Water Treatment Center to aquifer storage and recovery (ASR), as part of the Infrastructure Fee. The initial payment Dominion made to the Town is $3 million. At this time Dominion has not had the opportunity to meet to discuss the additional costs for the Arapahoe well with their board. Dominion indicated that they will likely proceed, pending confirmation with their board. Staff recommends continuing the project so that we can remain on schedule with the hope that the new well will be on-line in July. In the unlikely event that Dominion terminates the agreement and does not pay for the infrastructure, staff still recommends proceeding. Castle Rock Water needs additional groundwater infrastructure to keep pace with growth, and we have adequate capital reserves to pay for it even if Dominion decides to terminate.
History of Past Town Council, Boards & Commissions, or Other Discussions
On December 7, 2016, the Castle Rock Water Commission (formally Utilities Commission) unanimously approved to take the construction services contract for the Founders Wells CR-226 and CR-227 to Town Council for approval.
On January 3, 2017, Town Council unanimously approved Resolution No. 2017-006, an agreement with Layne Christensen Company for the Construction of the Founders Wells CR-226 and CR-227, for a total project cost $1,914,422.
On October 25, 2017, the Castle Rock Water Commission recommended to present this change order to Town Council.
On November 7, 2017, Town Council was updated on the Change Order to the contract with Layne Christensen Company.
On December 13, 2017, the Castle Rock Water Commission was advised of the bid results from the requests for proposals for the Founders Arapahoe Well CR-227 Drilling and Completion Project.
On January 2, 2018, Town Council unanimously approved Resolution No. 2018-004, a construction contract with Hydro Resources - Rocky Mountain, Inc. for the Founders Arapahoe Well CR-227.
Discussion
Based on the Water Resources Supply Demand Model, the current population growth trend in Castle Rock, the last two summer water demand seasons, and our recent intergovernmental agreement with Dominion, additional groundwater supply is needed to keep pace with increased water demands.
The new Founders Well Facility will be located east of Matney Park along Lantern Circle (see Attachment B), on a parcel previously dedicated to the Town for the purpose of developing a well facility. Staff anticipates that this facility will produce 0.85 million gallons per day of raw water supply for the Town.
During the reaming process for Well CR-227, Hydro Resources experienced lost circulation issues that they were prepared to handle. However, an effect of the lost circulation event is that the upper 750 feet of the hole became unstable and sloughed into the hole, on-top of the bit. This can cause the drill bit to become stuck in the hole and interrupt drilling. It was determined that the best solution to move forward without losing the hole is to try to grout in a twenty-inch casing from the bottom of the surface casing to 750 feet below ground surface. This would effectively stabilize the upper section of the hole and allow drilling to advance to the planned depth of 2,400 feet, and allow Hydro Resources to more effectively handle the lost circulation zone.
Budget Impact
A budget amendment for 2018 will need to be completed for this project. The original contract amount for Hydro Resources was $1,490,365, plus a ten percent Town-managed contingency of $149,036.50, for a previous authorization of $1,639,401.50 (Purchase Order 1600). The emergency change order authorization amount is $378,499.33. Staff proposes to put $100,000 of the contingency towards the emergency change order, saving $49,036.50 for any other contingencies that occur during the remainder of the project. This would bring the total project authorization to $1,912,992.83. The project Account number is 210-4275-442.75-39, New Water Supply Well.
Project Account Amount. Contingency Change Order Total
210-4275-442.75-39 $1,490,365 $49,046.50 $373,591.33 $1,912,992.83
If Dominion proceeds with the IGA, all costs will be paid for by Dominion and reimbursed to Castle Rock’s Water fund. In the unlikely event Dominion terminates the IGA, Castle Rock Water has adequate capital reserves to fund the project without Dominion.
Staff Recommendation
Staff recommends Town Council ratification of the emergency change order with Hydro Resources - Rocky Mountain for casing of the upper 750 feet of the Arapahoe Well CR-227 Project in the amount of $373,591.33, for a total authorization of $1,912,992.83.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Change Order
Attachment B: Memo packet dated January 2, 2018