2002 AGN OCT 15 I22 - Laserfiche WebLink

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Item #22 CITY OF COLTON AGENDA REPORT COUNCIL MEETING OF October TO: Honorable Mayor and City Council FROM: Thomas K. Clarke, Electric Utility Director SUBJECT: Approval of O&M Agreement and Administrative Services Agreement DATE: October 9, 2002 On May 21, 2002, the City Council authorized the City to enter into an Engineering Procurement, and Construction Agreement with EI Colton, LLC for the engineering, pernntting, procurement, installation, and commissioning of the generation project Upon complefion of the project, the Ciry would like to retain EI Colton, LLC to operate and maintain the facility, and to provide management and administrative services related to the day-to-day operation of the facility. DISCUSSION/ANALYSIS: The Operations and Maintenance (O&M) Agreement defines the terms by which EI Colton, LLC will operate and maintain the generating facility. The term is structured for seven years, after which the agreement will automatically renew for one-year periods unless a one year notice is given by either party to terminate the agreement. The services performed under the agreement include the staffing, training, directing, supervising, and managing the operators of the generating facility. The City will pay to EI Colton, LLC a base fee of $41,700.00 per month in addition to reimbursement of all expenses related to the operafion of the faciliry. The services as defined in the Administrative Agreement are related to the management and administration of the facility, and include full bookkeeping, record keeping reports, licensing, permitting, fuel management services, as well as management of the emission reduction credits (ERCs) that are required to operate the faciliry. The term of this agreement coincides with the O&M Agreement, which is a period oF seven years. The City will pay EI Colton, LLC an administration fee of $2,428.51 per month, a fuel management fee of $41,551.17 per month, and a fee of $9,321.43 per month to manage the ERCs. These fees total $53,301.11 per month in addition to reimbursement of all expenses related to the management and administration of the faciliry. ALTERNATIVES: 1. Approve the O&M and Administrative Services agreements. 2. Take no action. FINANCIAL IMPACT: The monthly base fee for the O&M Agreement is $41,700.00. The monthly fee for management and administration of the facility is $53,301.11, and includes fuel management services and ERC management services. Funds are available in account number 520-8000-8001-2350. ENVIROMENTAL IMPACT: None. RECOMMENDATION: Council is requested to approve the Operation and Maintenance Agreement and the Administrative Services Agreement with EI Colton, LLC.