Public works staff presented phase‑2 of an Aquifer Storage and Recovery project funded in part by a California Department of Water Resources grant of roughly $6.325 million. Staff explained the bid review process and said the lowest bidder was found nonresponsive because the prime contractor proposed less than the required 50% prime performance; as a result the council was asked to award to the next lowest responsive and responsible bidder, W.M. Lyles Company.

"We were required to deem their bid as nonresponsive," Mr. Wolf told the council, describing the procurement rule that the prime contractor must perform at least half the work. Staff recommended awarding the base bid (which includes automated injection and extraction capability) rather than an alternate injection‑only scope.

Staff summarized costs: a recommended construction contract of $5,304,500, a 10% construction contingency, construction management and inspection costs (about $229,937), labor compliance services ($47,300) and staff project administration (~$60,000), for an estimated total project cost of approximately $6,172,000. Available CIP and DWR grant funds were reported at about $4.3 million, leaving a shortfall of about $1.9 million.

To close the gap staff proposed transfers from several water funds: $325,000 from the unallocated water reserve, $575,000 from the capitalization fund, and $1,000,000 from a water treatment plant instrumentation and electrical improvements account. Council moved, seconded and approved awarding the contract to W.M. Lyles Company and authorized the recommended professional services and budget transfers.

Councilmembers emphasized the project's long‑term value for drought resilience and authorized staff to proceed with construction oversight and contract execution.