Staff recommends approval of Amendment No.1 to the agreement for rental lighting for Walling Enterprises, Inc. as proposed.
The City Electric Department has provided rental lighting services to Palm Plaza under a contract with Walling Enterprises, Inc. since July 23, 2001. The initial agreement was for a term of five (5) years ending July 22, 2006. The initial term was followed by automatic renewal with no described term limits with the provision that termination is allowed at any time by either party with ninety (90) days prior written notice.
Rental lighting agreements are negotiated, written and maintained by the Electric Department. During internal audits, the Finance Department found that errors had been made in the calculation of costs described by the initial Agreement. Those errors resulted in an estimated revenue loss of $29,470 from July 2001 to March 2007. The discrepancies were reported to the Electric Department, but due to departure of key staff, the issue was not resolved in a timely manner.
The Finance Director mailed the required ninety (90) day written notice to be effective July 1, 2007 and therein offered the following options to Walling Enterprises, Inc.:
Option 1: The City would remove the poles and wiring in accordance with the Agreement and there would be no new charges attributable to the Agreement after July 1, 2007.
Option 2: Cooperatively agree to amend the total cost of installation of seventy-five 400w lights and twenty-eight poles from $46,152.40 to $75,044.68, and also monthly maintenance and energy costs may hereafter adjust monthly depending on wholesale cost of energy and other O&M costs.
Option 3: Termination of the Agreement and the Lessee may purchase the lighting system at the total cost of installation multiplied by the spent portion of the 13 year life of the poles and fixtures: $75,044.68 x 85/156 = $40,889.73 plus applicable tax.
Walling Enterprises, Inc. chose Option 2. and signed Amendment No. 1 to the Agreement.
1. Approve the resolution as submitted; or,
2. Such alternative action as the Commission may deem appropriate
Calculated at current rates, the total monthly cost for parking lot lighting at Palm Plaza is estimated to increase $433 per month from $2,783 to $3,216, or an additional $5,196 per year.
Prepared by: ______________________
Attachments: Yes____ No ______
Advertised: ____Not Required ______
Attorney Review : Yes___ No ____
Reviewed by: Dept. Head ________
Finance Dept. __________________
Deputy C.M. ___________________
City Manager ___________________
Account No. _________________
Project No. ___________________
WF No. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE AMENDMENT NO. 1 TO THE AGREEMENT FOR RENTAL LIGHTING SERVICES FOR WALLING ENTERPRISES, INC. (PALM PLAZA); 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 Amendment No. 1 to the Agreement for Rental Lighting Services between The City of Leesburg, Florida, as Lessor, and Walling Enterprises, Inc., the Lessee, whose address is P.O. Box 490329 Leesburg Florida 34749-0329, for rental parking lot lighting services.
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 __9th___ day of ___July______ 2007