REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute Amendments to the Agreements with Rising Edge Technologies (California), LLC and West Valley Construction Company, Inc. for As-Needed Maintenance and Repair of Utility Substructures and Aerial Infrastructures for Silicon Valley Power and Approve Related Budget Amendment
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Utility Department, Silicon Valley Power (SVP), maintains utility substructures and aerial infrastructures that support various City services, including the distribution of electricity and telecommunications. Underground substructure components include manholes, vaults, splice boxes, transformer pads, streetlight conduit, pole barriers, streetlight boxes, low voltage boxes, vault lids, retaining walls, and other utility substructure equipment. Above-ground infrastructure components include aerial fiber optic cables, fiber optic risers, fiber splicing and cases, and various utility pole equipment such as ground rods, anchors, pole risers, and support strands. To ensure electric system reliability, SVP uses multiple contractors for regular maintenance and repair services.
DISCUSSION
Pursuant to City Code Section 2.105.140(c), a formal Request for Proposals (RFP) was conducted with the award recommendation based on “best value.” On August 4, 2023, the RFP for As-Needed Maintenance and Repair Services for Electric Utility Substructures and Aerial Fiber Optic Cable was published on the City’s e-procurement system. Vendors were invited to submit proposals for any or all services related to the maintenance and repair of the utility substructures and aerial infrastructures.
Two proposals were received from Rising Edge Technologies (California), LLC and West Valley Construction Company, Inc. Both vendors submitted for the complete scope of services. The proposals were independently evaluated by a five-member evaluation panel against the criteria and weights published in the RFP, including experience, technical capability, and cost. The evaluation panel recommended entering into master agreements with both vendors.
On July 1, 2024, after the evaluation committee selected the contractors for the award, the City Manager executed agreements with the two contractors, each within his authority of $250,000. This action ensured the availability of contractors to perform critical repair services while awaiting City Council approval for an amount exceeding $250,000. Staff did not authorize any work under these agreements that exceeded the City Manager’s authority.
Both agreements will end on June 30, 2029, with a one-year option to extend the term through May 31, 2030. Staff is seeking City Council approval for the City Manager to negotiate and execute amendments to the agreements to increase the maximum compensation of each agreement, for a not to exceed total aggregate compensation of $10,000,000. This amount represents SVP’s estimate to maintain Silicon Valley Power’s utility substructures and aerial infrastructures. Staff anticipates that additional services may be needed in the future but will use this authorization to initiate services and forecast future years. Rates for labor and materials are established in the agreements and are subject to reasonable annual increases after the initial fixed period. Any rate increases must be approved by the City and substantiated by the contractors to the satisfaction of the City.
Actual work will be assigned to the contractors pursuant to a secondary bid process. When work is identified, SVP will obtain quotes from the two contractors, taking into account factors such as their schedule availability, experience, and cost. Staff requests authorization for the City Manager to negotiate and execute amendments as needed for the projects assigned to each contractor.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the actions being considered are exempt from the California Environmental Quality Act (“CEQA”) pursuant to section 15301 of Title 14 of the California Code of Regulations as the services involve the maintenance and repair of existing facilities and mechanical equipment.
FISCAL IMPACT
The maximum compensation for the two agreements with Rising Edge Technologies (California), LLC, and West Valley Construction Company, Inc. is $10 million over a five-year term. A budget amendment is recommended to add $2 million to the Transmission and Distribution maintenance budget within the Electric Utility Operating Fund. Funds for the agreement are also available in the FY 2024/25 Electric Utility Capital Fund based on projects requiring services. Budget adjustments for future years will be brought forward as part of the budget process.
Budget Amendment
FY 2024/25
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Electric Utility Fund |
|
|
|
|
Expenditures |
|
|
|
|
Electric Department |
$610,297,653 |
$2,000,000 |
$612,297,653 |
|
|
|
|
|
|
Fund Balance |
|
|
|
|
Unrestricted Ending Fund Balance |
$108,095,323 |
($2,000,000) |
$106,095,323 |
COORDINATION
The report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, or by email to: clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
1. Determine that the proposed actions are exempt from CEQA pursuant to Section 15301 (Existing Facilities) of Title 14 of the California Code of Regulations;
2. Approve FY 2024/25 budget amendments in the Electric Utility Fund to increase the Electric Department budget in the amount of $2.0 million and decrease the Unrestricted Ending Fund Balance in the amount of $2.0 million (five affirmative Council votes required for the use of unused balances);
3. Authorize the City Manager or designee to negotiate and execute amendments to the agreements with Rising Edge Technologies (California), LLC and West Valley Construction Company, Inc. for as-needed maintenance and repair services for electric utility substructure and aerial fiber optic cable for a five-year term ending June 30, 2029, to (a) increase the maximum compensation of each agreement, with a total aggregate maximum compensation of $10,000,000 between the two agreements, (b) add or delete services consistent with the scope of services, (c) adjust future rates to account for changes in labor rates, and (d) exercise a one-year option to extend the term of each agreement through May 31, 2030, to be funded by the SVP Operating or Capital Fund as applicable and subject to the appropriation of funds and the review and approval as to form by the City Attorney; and
4. Authorize the City Manager to take any actions as necessary to implement and administer the above agreements.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Agreement for Services with Rising Edge Technologies (California), LLC
2. Agreement for Services with West Valley Construction Company, Inc.