REPORT TO COUNCIL
SUBJECT
Title
Action on Delegation of Authority to Authorize the City Manager to Issue Purchase Orders and Negotiate and Execute Agreements or Amendments with Environmental Systems Corporation DBA ESC Spectrum Corporation for Data Acquisition and Historian System Support and Maintenance Service Related to Silicon Valley Power Operations and to Ratify Prior Payments
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 power plants which must comply with state and federal emissions requirements. A Data Acquisition and Handling System (DAHS) is a critical component of a power plant’s Continuous Emissions Monitoring System (CEMS). A DAHS is used to collect, store, and validate power plant emissions data which is required for state and federal regulatory compliance. The Bay Area Air Quality Management District (BAAQMD) uses DAHS data to monitor compliance with air quality standards, including those of the U.S. Environmental Protection Agency (EPA).
The Donald Von Raesfeld (DVR) power plant has a DAHS, which was installed by Environmental Systems Corporation DBA ESC Spectrum Corporation (ESC) when the power plant was built. Since installation, ESC has provided software licenses, reporting services, server management services, and software support and maintenance services in connection with the DAHS.
This Report to Council seeks ratification of payments exceeding the City Manager’s authority of $250,000 and requests authorization for the City Manager to issue purchase orders and agreements in connection with SVP’s continued use of the DAHS.
DISCUSSION
Ratification of Payments Exceeding $250,000
ESC has provided a number of services in connection with the DAHS. Since the system was installed, the City has used these services, but as payment records were destroyed pursuant to the City’s record retention policy, there are no records for this period. It is estimated that the City paid approximately $800,000 for these services, which was in excess of the City Manager’s authorization. This estimate is based on an average annual amount for the periods for which there are payment records. In addition to the estimated amounts, the City has paid approximately $400,000 to ESC since 2016 for its services. The City has payment records in this case. As the estimated amount and the post-2015 payments exceeded the City Manager’s signature authority, the City is requesting that the City Council ratify these past payments.
The City does not currently have an automated system to track cumulative expenditures associated with the DAHS system and instead has to periodically review payment history reports. To improve the City’s ability to track cumulative contract expenditures and reduce the risk of oversight under the current manual process, the Purchasing Division is working to implement the Procurement Contracts module within the City’s financial management system, PeopleSoft. This project, which is expected to be completed in 2026, will automate and centralize contract management and enhance control over all contract-related activities throughout their term.
Authorization for DAHS Services and Software between 2025-2031
SVP requires ongoing DAHS services and software for its DVR operations. Therefore, staff is seeking additional authorization to issue purchase orders to ESC for a total aggregate amount not to exceed $800,000 for the period of January 1, 2025, through April 30, 2031. This amount includes payments already made since January 1, 2025, and future costs for continued software licensing, server management, regulatory reporting, software maintenance and support services, and engineering services. Depending on the service needs, the City may issue purchase orders or negotiate and execute agreements and amendments for services.
A breakdown of the compensation is provided in Table 1 - DAHS Compensation Summary below.
Table 1 - DAHS Compensation Summary
|
Description |
Amount |
|
Estimated Payments (2000 - 2016)* *Estimated at $50,000 per year since 2000 |
$800,000 |
|
Amount Paid between July 2016 and June 2024 |
$400,000 |
|
Requested Authorized Compensation for ESC Service between July 1, 2025, and June 30, 2031 |
$800,000 |
This recommendation is made pursuant to Section 2.105.160(b)(2) of the Santa Clara City Code. This section exempts purchases from competitive procurement requirements when necessary to ensure continued operation and function of existing systems currently in use by the City. ESC is the sole provider of licenses, maintenance, and support services for DAHS.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulation in that it can be seen with certainty that there is no possibility that the proposed actions may have a significant effect on the environment.
FISCAL IMPACT
Sufficient funds for the ESC Spectrum DAHS solution are available in the Operating Budget Generation Program in the Electric Utility Fund for FY 2024/25 and is incorporated in the FY 2025/26 and FY 2026/27 Proposed Operating Budget. Funding for future years will be requested as part of the regular 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.
RECOMMENDATION
Recommendation
1. Authorize the City Manager issue purchase orders or negotiate and execute agreements and amendments with Environmental Systems Corporation DBA ESC Spectrum (ESC) for Data Acquisition and Handling System (DAHS) for a maximum authorization of $800,000 for purchase orders and payments issued during the period of January 1, 2025, through April 30, 2031, subject to the appropriation of funds and review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to take any actions necessary to implement and administer the purchase orders and agreements, including negotiating and executing future agreements or amendment(s) to (a) add or delete services associated with the services, (b) adjust future rates based on market conditions, and (c) make de minimis changes, subject to budget appropriations and review and approval as to form by the City Attorney; and
3. Ratify prior payments made to ESC in connection with DAHS services and software occurring prior to 2025 in the approximate amount of $1,200,000.
Staff
Reviewed by: Nico Procos, Acting Director of Silicon Valley Power
Approved by: Jovan Grogan, City Manager