2002 AGN JUL 02 I12 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT L 'J:1 Item #12 TO: Honorable Mayor and City Council FROM: Thomas K. Clarke, Electric Utility Director SUBJECT: Approval of contract to Navigant Consulting, Inc. for Independent Engineer's Report in an amount not to exceed $36,000 DATE: June 26, 2002 BACKGROUND: On May 21, 2002, the City Council authorized the City to enter into a contract with EI Colton LLC for the acquisition, construction and installation of a gas-fired simple cycle combustion turbine nominally rated at 43 megawatts (the "Project") at 100° Fahrenheit. The City will need to finance the cost of the Project through revenue bonds to be sold by the Colton Public Financing Authority (the "Authority"). In connection with issuance of the 2002 Bonds, the City has requested an independent report evaluating the ability of the electric utility to meet its future financial obligations with the addition of the Project. DISCUSSION/ANALYSIS: The bond sale is currently scheduled for mid-August; given this time frame, it is imperative that this report be completed by mid-July. In order to meet this deadline, the City has elected to waive the professional services RFQ requirement and requested Navigant Consulting, Inc. to conduct the independent report. The scope of work that is to be performed will include a review of the City's future need for power and development of a five-year financial pro - forma. Navigant Consulting, Inc. was chosen because the company is currently conducting a study for the City of Colton's electric utility relating to the advantages and benefits of joining the ISO. Much of the background information used in the ISO study will also be used in the financial review. In addition, Navigant Consulting, Inc. is preparing the Independent Consultant's Report for SCPPA's Magnolia Power Project, in which the City of Colton is a participant; therefore, Navigant Consulting, Inc. has established a familiarity with the City of Colton's future power needs. Navigant Consulting, Inc. is performing similar studies for other municipal utilities and will use a seasoned project team that is familiar with generation projects that are similar to the City of Colton's. ALTERNATIVES: The City could go out to bid for these services; however, this process will delay not only the bond sale, but potentially the scheduled completion date for the power plant as well. FINANCIAL IMPACT: This report will be funded from the electric utility professional services account #520-8000-8001-2350-0923-000. Budget is available in FY 02-03 in this account. ENVIROMENTAL IMPACT: None. RECOMMENDATION: Council is requested to approve a sole source contract to Navigant Consulting, Inc. for the independent report evaluating the ability of the electric utility to meet its future financial obligations with the addition of the generation project. REVIEW TEAM ONLY �7 City Attorne 4VFinance Director: City Manager: ,>/ OTHER: