Description: AGENDAHED.JPG
  

Item No:                    5F.

 

Meeting Date:           June 24, 2013

 

From:                          Mike Thornton, Purchasing Manager for

                                    Patrick Foster, Deputy Director Electric Utility

 

Subject:                      Resolution authorizing execution of a first amendment to an agreement for a power transformer stocking program

 

 


Staff Recommendation:

Staff recommends execution of the first amendment adopting lower unit prices and extending the term of the agreement an additional five years.

 

Analysis:

On July 14, 2008 the City Commission approved execution of an Agreement with Gresco Utility Supply, Inc. (Gresco) for the purchase of electric power transformers.  The Agreement also required Gresco to provide a stocking program.  Under the stocking program Gresco is required to keep quantities of transformers used by the City on hand in their inventory.  The City does not pay for the transformers held by Gresco until they are requested and delivered to the Electric Utility.

 

The Agreement was established as a result of Invitation to Negotiate (ITN) 70124 issued by the Purchasing Division.  Prior to this agreement, the City participated in the Florida Municipal Power Association (FMPA) cooperative agreement for transformers. The City has experienced ongoing quality and service problems with the FMPA contracted vendors. Additionally, the FMPA agreement does not provide for the vendor to stock transformer on behalf of the City. These two reasons prompted the Electric Department to seek a different supplier(s); one that could better meet the needs of the City of Leesburg.

 

This Agreement allows the City to purchase transformers at a competitive price and the stocking program allows the electric utility to better manage the inventory.  Prior to the stocking program, the utility would have to keep a large inventory of transformers due to the long lead times from the manufacturers.  A complete spending and savings analysis of the contract over the past five years of the agreement is attached for your review.

 

The pricing in this agreement, along with the changes in transformer specifications, will provide an annual savings of approximately $44,730.73.  There will be an estimated five year savings of $223,653.79 over the life of the contract extension.

 

Options:

1.  Approve execution of the agreement with Gresco Utility Supply, Inc; or

2.  Such alternative action as the Commission may deem appropriate

 

Fiscal Impact: 

Based on historical annual use of transformers the annual savings to the Electric Utility is estimated to be $44,730.73.  The overall fiscal impact will be lower transformer unit prices to the City. By Gresco agreeing to stock commonly used transformers for the City, the City will not have as much cash tied up in inventory.

 

Submission Date and Time:    6/19/2013 6:38 PM____

 

Department: _Electric Utility_______

Prepared by:  _Mike Thornton_________                     

Attachments:         Yes_X_   No ______

Advertised:   ____Not Required __X___                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________            

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _BLM,__________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _Various EL Accounts_

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

RESOLUTION NO._______________

 

RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A FIRST AMENDMENT TO AN EXISTING AGREEMENT WITH GRESCO, INC. FOR AN ELECTRIC POWER TRANSFORMER STOCKING PROGRAM; AND PROVIDING AN EFFECTIVE DATE.

 

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

 

            THAT the Mayor and City Clerk are hereby authorized to execute a First Amendment to an existing agreement approved by resolution 8215 with GRESCO UTILITY SUPPLY, INC. whose address is 6421 CR 219, Wildwood Florida 34474 for an electric power transformer purchase and stocking program pursuant to RFP 70124.

 

             THAT this resolution shall become effective immediately.

 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the __24th__ day of __June___ 2013.

 

 

 

                                                                            __________________________

                                                                             Mayor

 

ATTEST:

 

 

__________________________

City Clerk