1997 AGN JUL 01 I11 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF JULY 1, 1997 TO: HONORABLE MAYOR AND CITY COUNCIL APPROVAL: GRACIE FERNANDEZ HARMON, ACTING CITY MANAGE 4r FROM: THOMAS K. CLARKE, UTILITY DIRECTOR SUBJECT: AUTHORIZE UTILITY DIRECTOR TO MAKE ADJUSTED PAYMENT OF $25,119.53 REGARDING ADDED FACILITIES AGREEMENT WITH SOUTHERN CALIFORNIA EDISON FOR THE GALE DREWS SUBSTATION DUE TO AN ACTUAL COST DECREASE FROM THE ESTIMATED COST DATE: JUNE 18, 1997 BACKGROUND On October 4, 1994, Council authorized entering into an Added Facilities Agreement with Southern California Edison (SCE) for the upgrades to facilitate and build the third 66kV line to the Drews Substation. The total cost of this upgrade was estimated to be $563,000, which included an estimated one time cost of approximately $17,000. The City already paid this one time cost when the agreement was executed. The remaining interest will be paid over the life of the project. DISCUSSION/ANALYSIS As you know, the Drews Substation has been completed and so has the work under the contract with SCE. Due to an SCE change in allocation of charges, the one time cost has increased from $17,000 to $42,119.53 but the total cost of the upgrade decreased to $553,000. The City has an option to include this difference of $42,119.53 and $17,000 in an interest bearing account at a rate of 1.6% per month, but this would not be cost effective. FINANCIAL IMPACT As the total cost of this Added Facilities Agreement remains under the previously approved amount of $563,000, the payment of this difference amounting to $25,119.53 will benefit the City in the long run. Thomas K. Clarke, Department Director RECOMMENDATION That City Council authorize the Utility Director to make an additional one time payment of $25,119.53. Attachment: Agenda Report for Council Meeting of October 4, 1994, for review. Page 1 of 1 Item # 11