REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Issue Purchase Orders to Cresco Equipment Rentals for the Rental of Equipment, Products, and Related Services for a Total Amount Not-to-Exceed $620,000 Inclusive of Option Year, for Use and Funded by Silicon Valley Power
Report
BACKGROUND
The City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), operates and maintains power generation plants and other infrastructures that support electric transmission, distribution, and generation throughout the City. To maintain and support SVP’s equipment and facilities, various types of equipment are used, including forklifts, boom lifts, utility carts, telehandlers, and discharge hoses.
Since 2023, SVP utilized a cooperative agreement between Sourcewell and Caterpillar, Inc. (Caterpillar) for short-term equipment rentals. The local Caterpillar dealer, Cresco Equipment Rentals (Cresco), is located in Santa Clara.
Sourcewell is a government agency established by the State of Minnesota legislature to facilitate cooperative purchasing solutions for governmental, educational, and nonprofit agencies. Caterpillar was selected through a formal Request for Proposals (RFP) process facilitated by Sourcewell. The previous agreement, which was approved by the City Council under RTC #25-1264, expired on August 27, 2025. SVP now seeks to continue using Cresco under the new cooperative agreement, as described below.
DISCUSSION
The Purchasing Division Manager has determined that issuance of purchase orders to Cresco is authorized under Section 2.105.270(c) of the Santa Clara City Code (City Code), which states that the City may “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.”
In 2024, Sourcewell conducted a formal RFP process and again selected Caterpillar for the rental of equipment, products, and related services. A new agreement (Agreement Number 040924) was executed, effective through June 11, 2028, with one optional one-year extension through June 2029. Under this agreement, Caterpillar authorizes Cresco as its local dealer to fulfill orders; therefore, the City issues purchase orders directly to Cresco. A copy of the new agreement is attached for reference.
Cresco provides 24-hour emergency services. Caterpillar establishes local pricing based on Rouse data (an industry standard for equipment valuation and benchmarking) and provides regional discounts through its local dealers. For items not listed on Sourcewell’s pricing sheet, the City receives at least 10% off Cresco’s standard local rates.
The estimated annual expenditure is $155,000, with a total not to exceed amount of $465,000 through June 11, 2028, plus one optional one-year extension that would increase the total not-to-exceed amount to $620,000 through June 11, 2029. Approval of staff’s recommendation would enable SVP to secure competitively priced equipment rentals to support ongoing utility operations.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to Section 15378(b)(2) of Title 14 of the California Code of Regulations in that the proposed action only authorizes the lease of equipment and supplies for SVP projects.
FISCAL IMPACT
Funds are available in the Electric Utility Operating or Capital budget for FY 2025/26 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 City 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. Authorize the City Manager or designee to issue purchase orders to Cresco Equipment Rentals, pursuant to the Sourcewell cooperative purchasing agreement with Caterpillar, Inc., for the short-term rental of equipment, products, and related services for an initial term ending June 11, 2028, with a maximum compensation not to exceed $465,000, subject to the appropriation of funds and the review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to issue purchase orders for an additional one-year term through June 11, 2029, if Sourcewell elects to exercise its option to extend the cooperative purchase agreement, and to increase the maximum compensation by $155,000 for a revised not-to-exceed maximum compensation of $620,000, subject to the appropriation of funds and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan Grogan, CEO Silicon Valley Power
ATTACHMENTS
1. Sourcewell - Caterpillar Contract