(8)AR 050509 Truck Rental - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF MAY 5, 2009 TO: Honorable Mayor and City Council FROM: Jeannette Olko, Electric Utility General Manager ITEM # 9 SUBJECT: Waive Formal Bidding Requirements per Colton Municipal Code 3.08.140 (e), and Approve the Month -to -Month Rental of Two (2) Digger -Derrick Line Trucks, For the Electric Utility Department, From Altec Capital, in an Amount NTE $41,835.57. DATE: April 27, 2009 BACKGROUND: On April 24, 2003, the Electric Utility suffered a major loss when all three of its digger -derrick line trucks were destroyed by a fire at the Colton Electric Yard. To accommodate the Electric Utility's immediate need for equipment, the City's Purchasing Division obtain pricing and delivery to rent or lease two replacement line trucks until the Electric Utility could go out to bid for new trucks. City Council approved a 5 -year lease of two Altec line trucks on May 20, 2003. This was a lease only, with no ownership rights at the end of the term. The lease expired June 30, 2008, at which time, City Council approved the month- to-month rental of the two units until the bidding for new units could be completed and the unit delivered. DISCUSSION/ANALYSIS: The Electric Utility issued a Notice Inviting Bids and held a Bid Opening on April 22, 2008 for new digger derrick units. Before a bid award could be made, the City needed to apply for an exemption from the South Coast Air Quality Management District (SCQAMD) to purchase the diesel powered units. Electric Utility Staff was notified by the SCAQMD on December 18, 2008 that the City could proceed with the acquisition. City Council made bid award for this requirement to Terex Utilities on January 20, 2009, with a 270 day lead time. Shortly after bid award, the City was informed that the cab and chassis manufacturer had ceased operations. City Council approved a Change Order to the Bid Award on April 7, 2009. With the delay due to the change in cab and chassis manufacturer, it is anticipated that the new units will be delivered in January 2010 The Electric Utility will need to continue to rent the existing equipment until the new units are delivered. The current monthly rental for both units is $5,976.51, including sales taxes. Altec has agreed to continue to rent the two trucks at the same cost on a month-to-month basis until we determine we no longer need them. The total cost to keep these units through January 31, 2010 (7 months) is $41,835.57. If the new units are ready sooner than January, we can return the units earlier. Staff is recommending that we continue to lease these two units on a month-to-month basis until the new equipment can be delivered. The other option would be to return the units upon maturity of the existing lease and go to bid for a short -turn rental of two trucks. The bidding process would take several weeks, and it is possible that the suppliers would not have sufficient equipment on hand to fill our needs. There could potentially be a 6 week lead time on rental equipment after a bid and award. The Colton Municipal Code, Title 3, Chapter 3.08.140,Exceptions to Competitive Bidding — Non -Public Projects, Section (e), Purpose of Bidding is Otherwise Accomplished; allows for the bidding process to be waived "when the City Manager determines that it is in the best interest of the City and its administrative operations to dispense with public bidding for non-public projects under this chapter."