REPORT TO COUNCIL
SUBJECT
Title
Action on an Equipment Rental Agreement and Related Documents with Global Rental Co., Inc. for Equipment Rental for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City's Electric Utility, Silicon Valley Power (SVP), uses various types of equipment, such as aerial trucks and digger derricks, to carry out its essential operations. SVP currently owns a fleet of equipment but must rent equipment to supplement its existing fleet due to increases in operational demands, equipment downtime, and lead times in the procurement of new equipment.
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 2024, Sourcewell issued a Request for Proposals (RFP) for rental equipment, products, and related services. That RFP resulted in multiple vendors being awarded agreements. After evaluating the equipment offerings of those vendors, staff selected Global Rental Co., Inc. (Global Rental) due to their ability to supply the aerial trucks and digger derricks required by SVP. In addition, Global Rental provides a 24-hour emergency service and offers discounted equipment rental rates of 3-5% off the commercial list price under the Sourcewell cooperative purchasing agreement.
Staff is requesting City Manager authorization to execute an equipment rental agreement with Global Rental effective from the date of City Council authorization through June 11, 2028, the termination date of the Sourcewell cooperative purchasing agreement. The estimated annual expenditure on rental equipment is $250,000. Staff recommends an authorization not to exceed $2.5 million over the term of the Sourcewell cooperative purchasing agreement. This includes (1) approximately $100,000 already spent under staff level authority, (2) $1 million for current vehicles rented under this agreement including potential price increases or other costs, (3) $700,000 in additional authorization for additional rental vehicles during the term in case of additional identified equipment needs, and (4) authorization of up to $700,000 to buy out rental vehicles from lease.
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 as the proposed actions only authorize the rental and purchase of equipment.
FISCAL IMPACT
Funds are available in the Electric Utility Operating Fund budget for FY 2024/25. Funds for future years will be requested through the normal budget process.
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. Authorize the City Manager or designee to execute an Equipment Rental Agreement and related documents with Global Rental Co., Inc. for Silicon Valley Power under the Sourcewell cooperative purchasing agreement, through June 11, 2028, with a total maximum compensation of up to $2.5 million, subject to the appropriation of funds and review and approval as to form by the City Attorney; and
2. Authorize the City Manager or designee to take any actions as necessary to implement and administer the Agreement and to negotiate and execute amendments to (1) rent additional equipment and vehicles; and (2) purchase vehicle and equipment rentals, subject to appropriation of funds and review and approval as to form by the City Attorney.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Equipment Rental Agreement with Global Rental Co., Inc.