AGENDA CAPTION:
Title
Consider approval of Resolution 2022-173R, approving an authorization for Change in Services to the Interlocal Agreement with the Lower Colorado River Authority (“LCRA”) for the provision of various goods and services concerning electrical transmission, control and substation facilities, which includes the ability to contract directly with LCRA vendors through cooperative purchasing, to increase the annual contract amount from $6,600,000.00 to an amount not to exceed $8,600,000.00 per year; authorizing the City Manager or her designee to execute appropriate documents to implement the Change in Services on behalf of the City; and declaring an effective date.
Body
Meeting date: August 2, 2022
Department: Utilities Department - Tyler Hjorth, Director (By Lynda Williams, Purchasing & Contracting Manager)
Amount & Source of Funding
Funds Required: Varied maintenance and capital accounts
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Fiscal Note:
Prior Council Action: City Council previously approved Res 2019-230R on November 19, 2019, for the interlocal agreement between LCRA and the City of San Marcos for the provision of various goods and services concerning electrical transmission, control, and substation facilities, and to include the City’s ability to utilize cooperative purchasing laws to contract directly with LCRA vendors in the amount of $6,600,000 per contract year.
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Background Information:
City Council previously approved Res 2019-230R on November 19, 2019, for the interlocal agreement between LCRA and the City of San Marcos for the provision of various goods and services concerning electrical transmission, control, and substation facilities, and to include the City’s ability to utilize cooperative purchasing laws to contract directly with LCRA vendors in the amount of $6,600,000 per contract year.
City Council previously approved 2020-265R on December 15, 2020, for the annual renewal of the agreement between Techline, Inc., and the City of San Marcos for the provision of materials and supplies through the Interlocal Agreement with Lower Colorado River Authority (LCRA) in the amount of $4,000,000 per contract year, with three (3) annual renewals.
Over the course of the past two years, supply chain shortages, cost increases of materials, fuel cost increases, and labor shortages worldwide resulting in vastly increased lead times for orders have caused the City to place orders as much as two (2) years in advance to receive materials for planned capital improvement projects and at significantly higher costs than anticipated at the time of the initial City Council approval in 2019. This includes approximately $2,000,000 in transformers and $1,000,000 conduit purchases this year to maintain inventory in support of City and Electric’s CIP plans (previously approved by Council).
The increase in business and housing development within the City has also resulted in an increase in infrastructure needs (electric and water utilities, meters, cabling, among others) which, in turn, has resulted in the City’s needs for materials and supplies significantly increasing. Most of these charges are paid for by the developers.
Lastly, the City has experienced more widespread use of the contract by other departments besides the Utilities Department. Nearly all divisions within the Public Works Department as well as the Information Technology Department and the Engineering/Capital Improvements Program Department have required goods and services through the contract, many for which City Council has approved capital projects.
Therefore, the City is requesting approval of an Authorization for Change in Services to increase the interlocal agreement with LCRA for the provision of various goods and services concerning electrical transmission, control, and substation facilities, and the City’s ability to utilize cooperative purchasing laws to contract directly with LCRA vendors, from $6,600,000 per contract year to $8,600,000 per contract year for the current contract year in addition to any remaining contract extension options.
Council Committee, Board/Commission Action:
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Alternatives:
There are no viable, less expensive alternatives.
Recommendation:
City staff recommends approval of the Authorization for Change in Services to increase the annual contract amount for the Interlocal Agreement with the Lower Colorado River Authority (LCRA) for the provision of various goods and services concerning electrical transmission, control, and substation facilities, and to include the City’s ability to utilize cooperative purchasing laws to contract directly with LCRA vendors.