Title
Consideration of Budget Revision No. 2018-14 for Otowi Well No. 2
Recommended Action
I move that Council approve Budget Revision 2018-14 as summarized on attachment A and that the attachment be made a part of the minutes of this meeting.
Utility Manager's Recommendation
The Utility Manager recommends that Council approve the budget revision as requested.
Board, Commission or Committee Recommendation
The Board of Public Utilities recommends that Council approve Budget Revision 2018-14.
Body
The purpose of this item is to consider a budget revision relating to the drilling of the Otowi Well No 2. The budget revision increases the expenditure budget by $350,000 for possible change orders to the construction contract for Otowi Well No 2 (Contract: AGR17-30). No amendment is necessary because the agreement allows for change orders (for unforeseen conditions in drilling the well) to increase funding up to the total amount budgeted. A summary of the budget revision and specific details relating to this item are in Attachment A.
The drilling subcontractor mobilized and began drilling in January 2018. A layer of basalt was encountered about 50' below ground which has caused multiple complications in the drilling operation due to the presence of fractures in the basalt. Soon after beginning to drill in the basalt, the rig began experiencing a loss of recirculating mud due to fractures in the basalt that were allowing the drilling mud to escape. Mitigation measures were attempted including placing additives to the mud and cementing the bore hole to plug the fractures. After several attempts to restore consistent recirculation the driller stopped due to the risk of getting the drill bit stuck down hole from all of the cuttings that were depositing due to the loss of recirculating fluids which extract the cuttings.
The solution recommended by the driller was to change the drilling method to an air rotary drilling method. This method uses high pr...
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