REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Issue Purchase Orders to Cresco Equipment Rentals for the Rental of Equipment and Related Services for Use and Funded by Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), operates and maintains power generation plants in Santa Clara along with multiple substation facilities and other SVP facilities that support electric transmission, distribution, and generation. To support maintenance of SVP equipment and facilities, SVP uses various types of equipment, such as forklifts, boom lifts, utility carts, telehandlers, and discharge hoses. Additionally, SVP purchases goods and services necessary to support operations, such as propane, equipment, and safety training.
DISCUSSION
Section 2.105.270(c) of the Santa Clara City Code (City Code) states that the City may, without observing formal bidding requirements, “contract with a vendor under a contract awarded using preestablished cooperative purchasing agreements, when such agreement resulted from a competitive bid process that meets or exceeds the City’s competitive bid process.” The City’s Purchasing Division Manager’s has determined that the competitive solicitation process described below meets or exceeds the City’s competitive bid process.
Sourcewell is a government agency established by the State of Minnesota legislature to facilitate cooperative purchasing solutions for governmental, educational, and nonprofit agencies. In 2020, Sourcewell issued a Request for Proposals (RFP) for equipment rental with related services. That RFP resulted in multiple vendors being awarded agreements. After evaluating the equipment offerings of those vendors, staff selected Caterpillar Inc. (CAT), because an authorized CAT dealer, Cresco Equipment Rentals (Cresco), is located in Santa Clara, CA, and has the ability to supply equipment rentals within 24 hours. Under the Sourcewell cooperative purchasing agreements, purchase orders may be issued directly to the suppliers or their authorized dealers under the terms and conditions established in the Sourcewell master agreement.
Cresco provides 24-hour emergency service and discounted equipment rental rates of 5-25% off the commercial list price under the Sourcewell cooperative purchasing agreement. For additional equipment not specifically listed in Sourcewell’s pricing sheet, the City receives at least 10% off the participating dealers’ standard local rates.
Staff is requesting City Council authorization for the City Manager to issue Purchase Orders to Cresco, effective from the date of City Council authorization through August 27, 2025, the termination date of the Sourcewell cooperative purchasing agreement.
The estimated annual expenditure on rental equipment and related services is $150,000. Staff recommends an authorization not to exceed $400,000 over the term of the Sourcewell cooperative purchasing agreement. This total includes approximately $200,000 already spent under staff-level authority and an additional $200,000 for future equipment rentals and related services, including the purchase of propane and equipment safety training.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the proposed actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to section 15301 Title 14 of the California Code of Regulations as they involve work associated with the operation, maintenance, and repair of existing facilities.
FISCAL IMPACT
Funds are available in the Electric Utility Operating or Capital budget for FY 2024/25 based on need for equipment. Funds for future years will be requested through the normal budget process.
COORDINATION
This report has been coordinated with the Finance Department and 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, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
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. Authorize the City Manager or designee to issue Purchase Orders to Cresco Equipment Rentals for the rental of equipment and related services for Silicon Valley Power under the Sourcewell cooperative purchasing agreement, through August 27, 2025, with a total maximum compensation of up to $400,000, subject to the appropriation of funds and review and approval as to form by the City Attorney; and
3. Authorize the City Manager or designee to take any actions as necessary to implement and administer the Purchase Orders.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager