HomeMy WebLinkAboutItem 5 - 2021-22 Whale Rock Reservoir Budget AmendmentWhale Rock Commission Report
Whale Rock Commission Meeting – April 21, 2022
Agenda Item 5 – 2021-22 Whale Rock Reservoir Budget Amendment
FROM: Aaron Floyd, Utilities Director
PREPARED BY: Mychal Boerman, Utilities Deputy Director - Water
SUBJECT: 2021-22 Whale Rock Reservoir Budget Amendment
RECOMMENDATIONS
1.Authorize the use of $30,000 of Whale Rock Unreserved Working Capital to supplement
existing design budget for the Whale Rock Pipeline Replacement Project; and
2.Authorize the use of $60,000 of Whale Rock Unreserved Working Capital to purchase
pipe and fittings to replenish Whale Rock’s inventory for use on emergency pipeline
repairs.
DISCUSSION
The Whale Rock Commission (Commission) considers the operating and capital budget for
Whale Rock Reservoir on an annual basis and approves the budget during its annual
commission meeting. Opportunity for current fiscal year budget modifications may also take
place during this designated meeting.
Whale Rock Pipeline Replacement Project
The Whale Rock Transmission Pipeline Replacement Project (Project) includes replacement
of 225 linear feet of 30-inch concrete cylinder pipe within the Dairy Creek Golf Course along
Highway 1, across from the Cuesta College campus. This pipeline replacement project was
previously approved by the commission following an inspection of the pipeline in 2017 that
indicated that this section of pipeline was experiencing abnormal wear or corrosion and had
an increased likelihood of failure.
Following adoption of the 2021-22 Whale Rock budget on April 29, 2021, which approved
the allocation of $60,000 for design of this pipeline replacement project, Whale Rock staff
engaged one of the City’s on-call engineering consultants to request a quote for design
services for the Project. Due to price increases in the engineering sector, previously approved
funding is insufficient to support design of the project. An additional $30,000 of supplemental
funding is needed from Whale Rock Unreserved Working Capital for the Project to stay on
schedule for replacement in FY 2022-23.
Pipe Repair Inventory
In November 2021, Whale Rock staff discovered a small leak on the Whale Rock pipeline.
Upon excavation it was discovered that the approximately 60 feet of pipeline needed
replacement. Upon completion of the repair work, the majority of Whale Rock’s inventory of
on-hand replacement pipe had been exhausted. Whale Rock staff are requesting that the 2021-
22 budget be supplemented with an additional $60,000 from Whale Rock Unreserved
Working Capital to replenish inventory so that it is available for future pipeline repair needs.
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With persistent supply chain shortages and delays, staff are estimating six to 12 weeks of
procurement time before the pipe materials would be delivered to Whale Rock. Given this
delay, staff are requesting amendment to this year’s budget so that pipe may be ordered
immediately.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action, because
the action does not constitute a “Project” under CEQA Guidelines Sec. 15278.
FISCAL IMPACT
Budgeted: No Budget Year: 2021-22
Funding Identified: Yes
Design for the Whale Rock Transmission Pipeline Replacement Project was originally
budgeted at $60,000 for 2021-22. Staff is requesting this budget be supplemented with an
additional $30,000 from Unreserved Working Capital for the Project’s design. Price increases
are the result of inflationary factors and a competitive engineering market.
Staff is requesting approval of $60,000 from Unreserved Working Capital to purchase pipe
and fittings to replenish Whale Rock’s inventory for use on emergency pipeline repairs.
In full, staff is requesting the use of $90,000 of Whale Rock Unreserved Working Capital for
these two projects.
Available Unreserved Working Capital balances currently equal $1,441,404. If this budget
request is approved, Unreserved Working Capital balances will equal $1,351,404.
ALTERNATIVES
1. Commission members may elect not to approve the proposed budget amendments related
to the Whale Rock Pipeline Replacement Project. Staff does not recommend this
alternative as it will prevent staff from replacing structurally deficient pipe and updating
pipeline integrity models with up-to-date information that will help minimize future
Whale Rock pipeline rehabilitation and replacement costs.
2. Commission members may elect not to approve the proposed budget amendments
necessary to purchase pipe and fittings to replenish Whale Rock’s inventory for use on
emergency pipeline repairs. Staff does not recommend this option as these pipe materials
are not available locally and procurement time is lengthy due to supply chain interruptions.
3. Commission members may elect to appropriate the requested funds as part of the 2022-23
Whale Rock Budget. This action is not recommended as it will cause delays in the
proposed projects, as budget will not be appropriated and available to be spent until July
1, 2022.
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