Agenda 09/26/2017 Item #16C609/26/2017
EXECUTIVE SUMMARY
Recommendation to approve a Certification of Financial Responsibility, as required by the Florida
Department of Environmental Protection, for the renewal of an operating permit for the deep
injection well system at the South County Water Reclamation Facility.
OBJECTIVE: To certify unconditionally to the Florida Department of Environmental Protection
(FDEP) the county’s obligation to perform plugging and abandonment of the deep injection well system
at the South County Water Reclamation Facility (SCWRF) pursuant to Chapter 62-528 Florida
Administrative Code.
CONSIDERATIONS: The SCWRF provides treatment of wastewater from customers throughout the
Collier County Water-Sewer District. The purpose of the deep injection well is to dispose of treated
effluent water (reclaimed water) from the wastewater treatment process. The permit, which expires
December 12, 2017, is for Injection Well 2 (IW-2).
Location Date of permit issuance Date of permit expiration Permit No.
SCWRF - 5600 Warren Street, Naples, FL 34113 December 13, 2012 December 12, 2017 211999-003-UO/1M
The permit renewal application requires the county to complete and execute a Certification of Financial
Responsibility form (Attachment 1). This form certifies that the county will be unconditionally obligated
to have the financial resources necessary to close, plug, and abandon the Class I injection well and related
monitoring wells. The current plugging and abandonment cost estimate is $391,575 (Attachment 2). If
the injection well system fails to meet permit conditions, or the well is no longer required for its intended
use, then plugging and abandonment become necessary.
This action is consistent with previous Board of County Commissioners decisions to approve similar
requests for the water reclamation facility’s deep injection well system, most recently on September 9,
2014, as Agenda Item 16C2.
FISCAL IMPACT: The actual expenditure of funds is not anticipated and would only be required if an
injection well was to be abandoned. Funds to cover these costs, if needed, are maintained in the Reserves
for Contingency line item in the Water-Sewer Fund (408), which is funded through user fees.
GROWTH MANAGEMENT IMPACT: None.
LEGAL CONSIDERATIONS: This item is approved as to form and legality, and requires majority
vote for Board approval. -SRT
RECOMMENDATION: To approve and authorize the Chair to execute the Certification of Financial
Responsibility form.
Prepared By: Zamira Deltoro, Project Manager, Engineering and Project Management
ATTACHMENT(S)
1. SCWRF IW-2 Attachment 1 Certification of Financial Responsibility Sept (PDF)
2. SCWRF IW-2 Attachment 2 Estimated Cost (PDF)
3. SCWRF IW-2 Attachment 3 Local Government Guarantee (PDF)
16.C.6
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09/26/2017
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.C.6
Doc ID: 3599
Item Summary: Recommendation to approve a Certification of Financial Responsibility, as
required by the Florida Department of Environmental Protection, for the renewal of an operating permit
for the deep injection well system at the South County Water Reclamation Facility.
Meeting Date: 09/26/2017
Prepared by:
Title: Project Manager – Public Utilities Planning and Project Management
Name: Zamira Deltoro
08/09/2017 1:13 PM
Submitted by:
Title: Division Director - Public Utilities Eng – Public Utilities Planning and Project Management
Name: Tom Chmelik
08/09/2017 1:13 PM
Approved By:
Review:
Public Utilities Planning and Project Management Tom Chmelik Additional Reviewer Completed 08/09/2017 1:38 PM
Public Utilities Department Margie Hapke Additional Reviewer Completed 08/09/2017 2:21 PM
Water Steve Messner Additional Reviewer Completed 08/09/2017 2:25 PM
Public Utilities Planning and Project Management Craig Pajer Additional Reviewer Completed 08/16/2017 9:59 AM
Public Utilities Operations Support Joseph Bellone Additional Reviewer Completed 08/17/2017 8:03 AM
Public Utilities Department Heather Bustos Level 1 Division Reviewer Completed 08/17/2017 11:30 AM
Public Utilities Department George Yilmaz Level 2 Division Administrator Review Completed 08/17/2017 12:50 PM
County Attorney's Office Scott Teach Level 2 Attorney Review Completed 08/18/2017 9:36 AM
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 08/18/2017 1:39 PM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 08/18/2017 3:04 PM
Budget and Management Office Ed Finn Additional Reviewer Completed 08/22/2017 12:30 PM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 08/23/2017 3:57 PM
Board of County Commissioners Michael Cox Meeting Completed 09/12/2017 9:00 AM
16.C.6
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C-1
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PROCEDURES AND COSTS FOR THE PLUGGING AND ABANDONMENT OF
INJECTION WELL IW-2 AND DUAL-ZONE MONITOR WELL
COLLIER COUNTY SOUTH COUNTY WATER RECLAMATION FACILITY
Plans for the plugging and abandonment of injection well IW-2 and the dual zone monitor well
are provided in Appendix C Figure 1. Injection well IW-2 would be abandoned by first
removing the wellhead. The open hole would then be filled with gravel to 10 feet below the base
of the injection casing. The injection casing would then be filled with cement to land surface. The
dual-zone monitor well will be abandoned by filling both the 6 5/8-inch and 16-inch diameter
casings with Portland Cement to land surface. Neat Portland cement would be used unless
permission is granted by the Florida Department of Environmental Protection (FDEP) to use
extenders. The costs associated with implementing the plugging and abandonment plan (plus
15% contingency) for the wells would be approximately $391,575 under current market
conditions. A current Certification of Financial Responsibility is included. The abandonment
plans for the well includes the following 8 major bid items:
IW-2
Bid Item #1 includes all work associated with mobilization and demobilization of the drilling
rig and supporting equipment suitable for the task. This bid item also includes the work
required to retrofit the drilling pad with new pad walls to ensure that injected or
formation fluids are not accidentally spilled on the ground.
Remove Wellhead ...................................................................................... $10,000
Mobilization-demobilization .................................................................... $60,000
Bid Item #2 consists of a mechanical integrity test
Contractor costs .......................................................................................... $35,000
Bid Item #3 complete below ground/add monument
Contractors costs ........................................................................................ $10,000
Bid Item #4 includes all materials and work required to fill the open hole interval with gravel to
10 feet below the bottom of the 24-inch diameter casing, and filling the remaining 10 feet
of open hole and the entire 24-inch diameter casing with neat cement.
Note Section 62-28.270 (7) FAC indicates that "neat cement grout or approved
equivalent" shall be used for well abandonment. For the purposes of this document we
therefore assume that the FDEP would not approve the use of extending cement in
implementing this plan.
File open hole with gravel est. 2,840 ft bpl (1000 ft3) @ $12.00/ft3 ....... $12,000
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Packet Pg. 1535 Attachment: SCWRF IW-2 Attachment 2 Estimated Cost (3599 : Recommendation to Approve a Certification of Financial Responsibility for
PW_PL1\Documents\6295\111491 C-2
Emplace 7,560 cubic feet of cement – Neat @ $20/ft3 .......................... $151,200
Sub-Total for Injection Well …………………………………………….. $278,200
15% Contingency …………………………………………………………. $41,730
Total Estimated Cost for IW Abandonment …………………………. $319,930
DZMW Monitor Well
Bid Item #1 includes all work associated with mobilization and demobilization of the drilling
rig and supporting equipment suitable for the task. This bid item also includes the work
required to retrofit the drilling pad with new pad walls to ensure that injected or
formation fluids are not accidentally spilled on the ground.
Remove Wellhead ........................................................................................ $4,000
Mobilization-demobilization .................................................................... $15,000
Bid Item #2 consists of a mechanical integrity test
Contractor costs .......................................................................................... $10,000
Bid Item #3 complete below ground/add monument
Contractors costs .......................................................................................... $2,500
Bid Item #4 includes all materials and work required to fill the open hole interval with gravel to
10 feet below the bottom of the 20-inch diameter casing, and filling the remaining 10 feet
of open hole and the entire 20-inch diameter casing with neat cement.
Note Section 62-28.270 (7) FAC indicates that "neat cement grout or approved
equivalent" shall be used for well abandonment. For the purposes of this document we
therefore assume that the FDEP would not approve the use of extending cement in
implementing this plan.
Emplace Cement LZ 500 ft3 – Neat @ $22/ft3 ......................................... $11,000
Emplace Cement UZ 900 ft3 – Neat @ $22/ft3 ........................................ $19,800
Sub-Total for Monitor Well ..……….………………………………….... $62,300
15% Contingency ………………………………………………………….. $9,345
Total Estimated Cost for MW Abandonment ………………………… $71,645
TOTAL CONTINGENCY (15%) IW-1 & DZMW-1 ......................................... $51,075
TOTAL IW-1 & DZMW-1 P&A & 15% CONTINGENCY ............................ $391,575
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Packet Pg. 1538 Attachment: SCWRF IW-2 Attachment 2 Estimated Cost (3599 : Recommendation to Approve a Certification of Financial Responsibility for
GRAVEL
NEAT PORTLAND
CEMENT
24"EXISTING GROUND
ELEVATION
350'
CASING OUTER DIAMETER (INCHES)
16"
6.63"
NOMINAL 32 INCH
SURFACE CASING
24 INCH O.D. STEEL
16 INCH O.D. STEEL
INTERMEDIATE CASING
(WALL THICKNESS =
NOMINAL 24 INCH
API 5L STEEL
(WALL THICKNESS =
MONITOR WELL DZMW-1
1,950'TOTAL DEPTH
(WALL THICKNESS =
350 FT
1,310 FT
2,640 FT
3,216 FT
3,400 FT
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2.200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
3,200BLS42"
34"
24"
CASING DIAMETER (INCHES)
3,300
3,400
51"EXISTING GROUND
ELEVATION
NOMINAL 50 INCH
BOREHOLE
34 INCH O.D. INTERMEDIATE
STEEL CASING
(WALL THICKNESS =
0.375 INCHES)
PIT CASING
(WALL THICKNESS =
0.375 INCHES)
CONDUCTOR CASING
(WALL THICKNESS =
0.375 INCHES)
42 INCH O.D. STEEL
51 INCH O.D. STEEL
NOMINAL 34 INCH
BOREHOLE
NOMINAL 42 INCH
BOREHOLE
STEEL CASING
(WALL THICKNESS =
0.500 INCHES)
24 INCH O.D. FINAL
INJECTION WELL IW-1
TOTAL PILOT HOLE
(APPROXIMATE
DEPTH)
NOMINAL 24 INCH
OPEN BOREHOLE
50 FTNOMINAL 52.5 INCH
BOREHOLE
Base of USDW
LEGEND2,650 FT
300 FT
1,290 FT
3,200 FT
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2.200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
3,200BLS
3,300
3,400
EXISTING GROUND
ELEVATION
NOMINAL 50 INCH
BOREHOLE
INTERMEDIATE
STEEL CASING
(WALL THICKNESS =
0.375 INCHES)
STEEL CASING
(WALL THICKNESS =
0.375 INCHES)
42 INCH O.D.
NOMINAL 34 INCH
BOREHOLE
NOMINAL 42 INCH
BOREHOLE
STEEL CASING
(WALL THICKNESS =
0.500 INCHES)
24 INCH O.D. FINAL
INJECTION WELL IW-2
TOTAL PILOT HOLE
(APPROXIMATE
DEPTH)
NOMINAL 12-1/4 INCH PILOT HOLE
(FILLED WITH CUTTINGS)
NOMINAL 22 INCH
OPEN BOREHOLE
Base of USDW
NOMINAL 12-1/4 INCH PILOT HOLE
(FILLED WITH CUTTINGS)
42"
34"
24"
CASING DIAMETER (INCHES)
2,840 FT
2,590 FT
2,600 FT
34 INCH O.D.
0.375 INCHES)
850'
BOREHOLE
BOREHOLE
Base of USDW
1,820'
0.375 INCHES)
6.625 INCH O.D.
0.562 INCHES)
UPPER MONITOR ZONE
NOMINAL 12-1/2 INCH
OPEN BOREHOLE
LOWER MONITOR ZONE
Collier SCWRF Injection Well System
Plugging and Abandonment Plan
Figure 1
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Packet Pg. 1539 Attachment: SCWRF IW-2 Attachment 2 Estimated Cost (3599 : Recommendation to Approve a Certification of Financial Responsibility for
Local Government Guarantee
A unit of local government of the State of Florida may demonstrate financial responsibility as required in Rule
62-528.435(9), F.A.C., by submitting all of the following information:
1. The local government must submit a letter from its attorney attesting to the permittee meeting the definition
of a local government as defined in Chapter 218, Florida Statutes (F.S.). The attorney must also attest to
the local government's coverage under Chapter 218, Part V, F.S., Financial Emergencies. A copy of
Chapter 218, Part V, F.S., is provided with this attachment.
If the permittee is unable to obtain a letter from its attorney regarding its status as a local government, an
alternate demonstration of financial responsibility must be submitted to the FDEP. The alternatives
suggested by the FDEP are:
a. Surety Bond
b. Letter of Credit
c. Trust Fund
d. Financial Test
2. The local government must submit a Certification of Financial Responsibility which certifies
unconditionally the obligation of the local government to perform plugging and abandonment of its
injection system(s) pursuant to Chapter 62-528, F.A.C. The certification form provides information on the
location of the injection system(s) guaranteed by the local government with the related cost estimates for
plugging and abandonment.
The certification allows for an annual cost increase of 10 percent without submission of an updated
certification form. Cancellation of the agreement may not take place without the written consent of the
FDEP Secretary (10% increase applies only within a permit cycle – financial responsibility must
address full amount when renewing or reissuing a permit).
The person signing the Certification on behalf of the local government must be an individual authorized to
bind the local government (the entity that is qualifying as a local government - not just the utility) to
such an agreement. The signing of this agreement must be notarized to complete the processing of the
"Certification of Financial Responsibility" form. The wording of the certification form is provided in the
attachment Form for Certification of Financial Responsibility for Local Government.
3. A copy of the financial statements (for the entity qualifying as a local government – not the utility) for
the latest completed fiscal year must accompany items 1 and 2 above to complete the financial package for
review by the FDEP. If the Department finds through its review of the financial statements that the
financial strength of the unit of local government is questionable, the Department may notify the permittee
of its intentions to deny the financial package as submitted. The permittee would then be required to submit
an alternate financial demonstration to meet the requirements of Rule 62-528.435(9), F.A.C.
16.C.6.c
Packet Pg. 1540 Attachment: SCWRF IW-2 Attachment 3 Local Government Guarantee (3599 : Recommendation to Approve a Certification of Financial
Plugging and Abandonment Plan/Cost Determination - In order to demonstrate financial responsibility a permittee
or applicant must submit a detailed plugging and abandonment (P&A) plan to the Department for approval (injection
and monitor well). The P&A plan should contain the following information:
1. A step-by-step plugging plan indicating where cement and other fillers (if any) will be placed.
2. A drawing showing the well construction and proposed placement of plugging materials. Appropriate
depths should be indicated on this drawing.
3. Calculations showing the derivation of the volume of cement and other fillers (if any) needed to plug the
well according to the plan prepared in Items 1 and 2 above. Separate calculations should be made for each
well.
4. Calculations showing the derivation of the total cost for plugging each well (injection and monitor well(s)).
Costs should be itemized for each well (i.e. cement cost, mobilization cost, etc.). Financial responsibility
must be demonstrated for the sum of the total costs for all injection and associated monitor wells at a
facility.
Timing of Demonstrations - Department rules require that financial responsibility be demonstrated at the time of
permitting and maintained. A demonstration of financial responsibility will be required for each construction and
operation permit application. Also, at any time during a permit cycle, if updated plugging and abandonment costs
exceed the initial financial certification amount by ten percent or more, then a redemonstration shall be submitted to
the Department. Updated plugging and abandonment cost estimates should be provided to the Department at the
midpoint of the permit cycle. Permittees which utilize a UIC Financial Test shall redemonstrate annually, and
forward the latest annual report or financial statement.
Financial responsibility is required for Class I injection wells, and any monitor well which penetrates to a depth
below the underground source of drinking water.
Summary - Department UIC rules require that a permittee for a Class I injection well demonstrate and maintain
financial responsibility. To do this, the applicant or permittee must first develop a plugging and abandonment plan
and determine the cost associated with implementing this plan should it become necessary. These costs should be
updated during the midpoint of the permit cycle and if the cost is ten percent or more above the amount of the
previous financial responsibility demonstration is based, then a redemonstration must be made to the Department.
Once the costs have been determined, several methods are available to demonstrate financial responsibility. Each
method is described in the Department's guidelines for demonstrating financial responsibility.
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Packet Pg. 1541 Attachment: SCWRF IW-2 Attachment 3 Local Government Guarantee (3599 : Recommendation to Approve a Certification of Financial
CHAPTER 218
FINANCIAL MATTERS PERTAINING TO POLITICAL SUBDIVISIONS
PART V
FINANCIAL EMERGENCIES
218.50 Short title.--Sections 218.50-218.504 shall be known as the "Local Government Financial
Emergencies Act."
History.--s. 8, ch. 79-183.
218.501 Purposes.--The purposes of ss. 218.50-218.504 are:
(1) To preserve and protect the fiscal solvency of local governmental entities.
(2) To assist local governmental entities in providing essential services without interruption and in meeting
their financial obligations.
(3) To assist local governmental entities through the improvement of local financial management
procedures.
History.--s. 8, ch. 79-183; s. 25, ch. 96-324.
218.502 Definition.--As used in ss. 218.50-218.504, the term "local governmental entity" means a county,
municipality, or special district.
History.--s. 8, ch. 79-183; s. 26, ch. 96-324.
218.503 Determination of financial emergency.--
(1) A local governmental entity is in a state of financial emergency when any of the following conditions
occurs:
(a) Failure within the same fiscal year in which due to pay short-term loans from banks or failure to make
bond debt service payments when due.
(b) Failure to transfer at the appropriate time, due to lack of funds:
1. Taxes withheld on the income of employees; or
2. Employer and employee contributions for:
a. Federal social security; or
b. Any pension, retirement, or benefit plan of an employee.
(c) Failure for one pay period to pay, due to lack of funds:
1. Wages and salaries owed to employees; or
2. Retirement benefits owed to former employees.
(d) An unreserved or total fund balance or retained earnings deficit for which sufficient resources of the
local governmental entity are not available to cover the deficit for 2 successive years.
(e) Noncompliance of the local government retirement system with actuarial conditions provided by law.
(2) A local governmental entity shall notify the Governor and the Legislative Auditing Committee when one
or more of the conditions specified in subsection (1) have occurred or will occur if action is not taken to assist the
local governmental entity. In addition, any state agency must, within 30 days after the identification of the financial
emergency, notify the Governor and the Legislative Auditing Committee when one or more of the conditions
specified in subsection (1) have occurred or will occur if action is not taken to assist a local governmental entity.
(3) Upon notification that one or more of the conditions in subsection (1) exist, the Governor or his or her
designee shall contact the local governmental entity to determine what actions have been taken by the local
governmental entity to resolve the financial emergency. The Governor has the authority to implement measures as set
forth in ss. 218.50-218.504 to resolve the financial emergency. Such measures may include, but are not limited to:
(a) Requiring approval of the local governmental entity's budget by the Governor.
(b) Authorizing a state loan to the local governmental entity and providing for repayment of same.
(c) Prohibiting a local governmental entity from issuing bonds, notes, certificates of indebtedness, or any
other form of debt until such time as it is no longer subject to this section.
(d) Making such inspections and reviews of records, information, reports, and assets of the local
governmental entity, in which inspections and reviews the appropriate local officials shall cooperate.
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Packet Pg. 1542 Attachment: SCWRF IW-2 Attachment 3 Local Government Guarantee (3599 : Recommendation to Approve a Certification of Financial
(e) Consulting with the officials of the local governmental entity and the appropriate state agency regarding
any steps necessary to bring the books of account, accounting systems, financial procedures, and reports into
compliance with state requirements.
(f) Providing technical assistance to the local governmental entity.
(g)
1. Establishing a financial emergencies board to oversee the activities of the local governmental entity. The
board, if established, shall be appointed by the Governor. The Governor shall select a chair and such other officers as
are necessary. The board shall adopt such rules as are necessary for conducting board business. The board may:
a. Make such reviews of records, reports, and assets of the local governmental entity as are needed.
b. Consult with the officials of the local governmental entity and appropriate state officials regarding any
steps necessary to bring the books of account, accounting systems, financial procedures, and reports of the local
governmental entity into compliance with state requirements.
c. Review the operations, management, efficiency, productivity, and financing of functions and operations
of the local governmental entity.
2. The recommendations and reports made by the board must be submitted to the Governor for appropriate
action.
(h) Requiring and approving a plan, to be prepared by the appropriate state agency in conjunction with the
local governmental entity, prescribing actions that will cause the local governmental entity to no longer be subject to
this section. The plan must include, but need not be limited to:
1. Provision for payment in full of all payments due or to come due on debt obligations, pension payments,
and all payments and charges imposed or mandated by federal or state law and for all judgments and past due
accounts, as priority items of expenditures.
2. Establishment of a basis of priority budgeting or zero-based budgeting, so as to eliminate low-priority
items that are not affordable.
3. The prohibition of a level of operations which can be sustained only with nonrecurring revenues.
(4) During the financial emergency period, the local governmental entity may not seek application of laws
under the bankruptcy provisions of the United States Constitution except with the prior approval of the Governor.
History.--s. 8, ch. 79-183; s. 54, ch. 89-169; s. 1180, ch. 95-147; s. 27, ch. 96-324; s. 29, ch. 97-96.
218.504 Cessation of state action.--The Governor has the authority to terminate all state actions pursuant
to ss. 218.50-218.504. Cessation of state action must not occur until the Governor has determined that:
(1) The local governmental entity:
(a) Has established and is operating an effective financial accounting and reporting system.
(b) Has corrected or eliminated the fiscal emergency conditions outlined in s. 218.503.
(2) No new fiscal emergency conditions exist.
History.--s. 8, ch. 79-183; s. 28, ch. 96-324.
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Packet Pg. 1543 Attachment: SCWRF IW-2 Attachment 3 Local Government Guarantee (3599 : Recommendation to Approve a Certification of Financial