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HomeMy WebLinkAboutRes2004-041 CITY OF SEWARD, ALASKA RESOLUTION 2004-41 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The Council, per City Code Section 6.10.130, finds that it is in the public interest to contract with the current Contractor for the purpose of reading electrical meters within the City of Seward, Alaska Electrical Service Area and finds that the public interest would best be served by not requiring competitive bids/proposals based on the current Contractor's experience, satisfactory performance, dependability, modest price increase, the cost of issuing a request for proposals (RFP), and likelihood that an RFP would not result in a cost savings for the City considering the cost of training a new meter reader and other efficiency gains by continuing with the current Contractor. Section 2. The Council authorizes the City Manager to execute the attached Agreement, in substantial form as attached hereto, between the City of Seward and Michael O'Connor dba Mo's Meter Service for the purpose of reading electrical meters within the City of Seward, Alaska Electrical Service Area for three years with an option to extend two years upon satisfactory performance and approval by the City Manager. Section 3. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 12th day of April, 2004. THE CITY OF SEWARD, ALASKA vLA-~ Vanta Shafer, Ma or I I I Sponsored by: Shealy CITY OF SEWARD, ALASKA RESOLUTION 2004-41 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING THE ELECTRICAL METER READING AGREEMENT WITHOUT COMPETITIVE BIDS/PROPOSALS BETWEEN THE CITY OF SEWARD AND MICHAEL O'CONNOR DBA MO'S METER SERVICE FOR THREE YEARS WITH AN OPTION TO EXTEND TWO YEARS UPON SATISFACTORY PERFORMANCE AND APPROVAL BY THE CITY MANAGER AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT WHEREAS, on April 26, 1999 the Seward City Council approved a three year Agreement with Michael O'Connor (Contractor) for the reading of electrical meters within the City of Seward, Alaska Electrical Service Area; and WHEREAS, the terms ofthe Agreement allowed for a two year extension upon satisfactory performance which was approved by Council on March 25, 2002; and WHEREAS, the current Agreement expires on April 30, 2004; and WHEREAS, the Finance Department and the Electric Department have indicated that the performance ofthe Contractor has been excellent and recommends that the City retain the services of the Contractor; and WHEREAS, the Contractor has requested a 5% increase in the per unit price for the reading of the electrical meters and for delivery of door hangers as a result of increased costs for fuel and insurance; and WHEREAS, based on the satisfactory performance by the Contractor and the increased costs to perform the services, the proposed fee increases are reasonable; and WHEREAS, the City considered the cost of issuing new request for proposals, the possible results of any new proposals saving the City money and the cost oftraining a new meter reader; and WHEREAS, the Contractor's experience, satisfactory performance, dependability, and a modest price increase are all considerations for renewing the agreement with the current Contractor; and WHEREAS, pursuant to City Code Sections 6.10.115 and 6.10.130, competitive procurement procedures need not be used under certain circumstances. COUNCIL AGENDA STATEMENT Meeting Date: April 12, 2004 Through: Phil Shealy, City Manager From: Rick Gifford, Assistant City Manager Agenda Item: Electrical Meter Reading Agreement BACKGROUND & JUSTIFICATION: On April 26, 1999 the Seward City Council approved a three year Agreement with Michael O’Connor (Contractor) for the reading of electrical meters within the City of Seward, Alaska Electrical Service Area. The terms of the Agreement allowed for a two year extension upon satisfactory performance. The two year extension was approved by Council on March 25, 2002. The current Agreement expires on April 30, 2004. The Finance Department and the Electric Department have indicated that the performance of the Contractor has been excellent and recommends that the City retain the services of the Contractor. The Contractor has requested an increase in his per unit price for the reading of the electrical meters and for delivery of door hangers due to increased costs of fuel and insurance. The Contractor has proposed a 5% increase that would be effective May 1, 2004, subject to approval by the City Council. The unit price for the reading of meters would increase from $1.05 per meter to $1.10 and the unit price for door hangers would increase from $3.24 per door hanger to $3.40. Per the Agreement, each year in October, the number of meters are counted and the new number is used to calculate the Contractor’s fee for the reading of electrical meters for the next twelve month period. Currently the number of meters is 2,471. The monthly fee based on the current rate of $1.05 per meter is $2,594.55. The monthly fee based on the proposed rate of $1.10 per meter would be $2,718.10 or an increase of $123.55 per month. The number of door hangers fluctuate on a monthly basis. The average number of door hangers delivered is approximately 77 per month. Using the average number of door hangers of 77 per month, the average monthly fee based on the current rate of $3.24 per door hanger is $249.48. The average monthly fee based on the proposed rate of $3.40 per door hanger would be $261.80 or an increase of $12.32 per month. Under the proposed rates, the total monthly fees would be approximately $ 2,979.90 or an increase of approximately $135.87. Based on the satisfactory performance by the Contractor during the five years of the Agreement and the increased costs to perform the services, the administration believes that the proposed fee increases are reasonable. In determining the reasonableness of the fee increases, the administration also considered the cost to the City of issuing new request for proposals, the possible results of any new proposals being as high or higher than those being proposed and the cost of reading electrical meters with in-house personnel, if the services were not contracted out. In addition, Mr. O’Connor has an employee which provides some additional backup coverage from the Contractor in the event the employee or Mr. O’Connor experienced an unforeseeable event and could not read the meters. In the past this would have been covered by the City Electric Department at considerable more cost to the COUNCIL AGENDA STATEMENT Meeting Date: April 12, 2004 Electrical Meter Reading Agreement Page 2 City. Based on the Contractor’s experience, satisfactory performance, dependability, and a modest price increase, the administration recommends that the Council find it in the public’s interest to not require competitive proposals for the meter reading contract and approve a three year contract with Michael O’Connor dba Mo’s Meter Service for three years with a option to extend for two years upon satisfactory performance and approval by the City Manager. CONSISTENCY CHECKLIST: Yes No 1. Comprehensive Plan 2. Strategic Plan 3. Other 4. Not applicable X FISCAL NOTE: The are sufficient funds budgeted in the Electric Enterprise’s CY2004 budget to cover the proposed increase in fees for the electrical meter reading Agreement. Approved by Finance Department RECOMMENDATION: Council approve Resolution 2004-41, approving the Electrical Meter Reading Agreement without competitive bids/proposals between the City of Seward and Michael O’Connor dba Mo’s Meter Service for three years with an option to extend two years upon satisfactory performance and approval by the City Manager and authorizing the City Manager to execute the Agreement.