HomeMy WebLinkAbout2026-05-12 - AGENDA REPORTS - DRILTEK INC CONTR AMENDAgenda Item• 13
CITY OF SANTA CLARITA
.` AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: May 12, 2026
SUBJECT: CONTRACT AMENDMENT WITH DRILTEK, INC.
DEPARTMENT: Neighborhood Services
PRESENTER: Susan Nelson
RECOMMENDED ACTION
City Council:
1. Authorize an amendment to the existing contract with Driltek, Inc., for the plugging and
abandonment of six oil wells at Needham Ranch Open Space, increasing expenditure
authority in the amount of $98,000 for a total contract amount not to exceed $1,893,690.
2. Authorize the transfer of project savings in the amount of $98,000 from the North Oaks Park
Sewer Project P3038 (Fund 601), expenditure account P3038601-516101, to the Needham
Ranch Oil Wells Plug and Abandonment Project P2025, expenditure account P2025601-
516101.
3. Authorize the City Manager or designee to execute all contracts and associated documents,
subject to City Attorney review.
BACKGROUND
On October 28, 2025, the City Council awarded a construction contract to Driltek, Inc., for the
plugging and abandonment of six idle oil wells located within the Needham Ranch Open Space.
The project was initiated to bring the wells into compliance with regulations overseen by the
California Department of Conservation Geologic Energy Management Division (CalGEM) and
to eliminate future idle well fees associated with inactive wells on property owned by the City of
Santa Clarita (City).
The work involves specialized plugging and abandonment procedures designed to permanently
seal the wells and restore the site in accordance with Ca1GEM standards. Due to the wells having
been drilled decades ago and left idle for an extended period, certain subsurface conditions could
not be fully verified prior to commencing field operations.
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During abandonment activities at one of the wells, the contractor encountered site conditions that
differed from the permitting records on file with CaIGEM. Specifically, subsurface conditions
within the wellbore required additional remedial work to properly seal the well and ensure
compliance with Ca1GEM requirements. These conditions were not observable through standard
pre -construction investigation methods and could only be identified upon physical access to the
wellbore, as a result of inaccuracies in the well's historical data.
As part of the procurement process, the City negotiated an all-inclusive contract price intended to
encompass the work necessary to complete the well abandonment activities and obtain final
approval from Ca1GEM. However, the conditions encountered at the well represent a significant
change from those reasonably anticipated at the time the contract was executed.
To address these unforeseen conditions and complete the plugging process in accordance with
regulatory requirements, additional work is necessary. The contractor submitted a change order
request outlining the required modifications to the abandonment procedure and associated costs.
City staff reviewed the request, evaluated the justification for the additional work, and
determined that the change in conditions was legitimate and the proposed costs are consistent
with industry standards for similar specialized well abandonment work.
Approval of the proposed contract amendment will allow the contractor to complete the
additional work necessary to properly plug the affected well and obtain final regulatory clearance
from Ca1GEM. Completion of this work is essential to ensure the wells are permanently
abandoned in accordance with state regulations and to protect the City from future environmental
liability and regulatory penalties.
Staff recommends amending the existing construction contract with Driltek, Inc., to incorporate
the additional costs associated with the unforeseen site conditions encountered during the well
abandonment process.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
Upon approval of the recommended actions, project savings from the North Oaks Park Sewer
Project account P3038601-516101 in the amount of $98,000 will be transferred to the Needham
Ranch Oil Wells Project account P2025601-516101 to support the amended contract.
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