(15)AR 040307 Transformer Engineering Services

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ITEM #15 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF APRIL 3, 2007 TO: Honorable Mayor and City Council FROM: Jeannette Olko, Electric Utility General Manager SUBJECT: Request approval of Professional Services Agreement with Pennsylvania Transformer Technology, Inc. for Transformer Engineering Services DATE: March 29, 2007 BACKGROUND: The City of Colton Electric Utility Department requires the services of a transformer engineer for extensive repairs of substation power transformers. These engineering services are essential for accurate and expeditious transformer restoration. The Electric Utility currently has one power transformer that is inoperative. DISCUSSION/ANALYSIS: Colton Electric has two transformers at the Hub Substation that are in need of repairs before the warm weather arrives. These repairs were not anticipated — one of the transformers started to leak oil; because the two transformers are the same make and age, it was decided to perform the repairs to both transformers. There is only one vendor that works with this make of transformer — the transformers are approximately 40 years old. The estimated cost to repair the two transformers is approximately $50,000. The next opening for a transformer service engineer is the week of April 16. The repairs cannot wait much later, because the summer peak load period is approaching. Finally, Arrowhead Regional Medical Center is requesting assistance with their system that requires load switching, which cannot be done at the present time because of the condition of the transformers. The Colton Municipal Code, Title 3, Chapter 3.08.140 (E) states in part, Competitive bidding, either formal or informal, is not required when the City Manager determines that it is in the best interest of the city and its administrative operations to dispense with public bidding. Staff feels that it is in the City's best interest as there is no other vendor that offers the repair services for this particular make of substation power transformers. Therefore staff is recommending that the City Council waive the bidding requirement and approve the Professional Services Agreement with Pennsylvania Transformer Technology, Inc. in an amount not to exceed $50,000.00 FINANCIAL IMPACT: Funds are budgeted and available in account number 520-8000-8003-2350-0923-000, Professional Services, Substation Division. ALTERNATIVES: There is no alternative. In order to provide reliable power this summer, these repairs must be performed.