RECOMMENDATION TO COUNCIL
Staff recommends City Council adopt a resolution to approve a sole source purchase order for fifty pad-mounted 100kVA single phase distribution transformers. In addition, staff requests authority for the City Manager or his designee to approve up to a ten percent (10%) contingency for unforeseen change orders.
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BACKGROUND
Along with electric utilities nationwide, Roseville Electric Utility has been confronted with a shortage of electric utility transformers. This critical equipment is necessary to provide electric service to customers and support new residential and commercial development in Roseville. Roseville Electric Utility currently procures all needed distribution transformers through Mader Supply - representing Howard Industries. Mader Supply was the lowest responsive bidder to RFQ 10-3177 issued in 2018 and is currently in year 3 of 4 optional renewal years. Transformer manufacturers are struggling to get the specialized raw materials, including “core” steel used in transformer production. The shortage is exacerbated by competition for that same steel from the auto industry and labor shortages. Current lead times for single phase distribution transformers have risen over 400% and are projected to be 10-14 months after receipt of order, with no guaranteed delivery date.
Staff continues to seek additional vendors to meet the development and maintenance needs of the City including contacting all bidders from the original RFQ to receive new quotes. Staff has also expanded the search beyond domestic suppliers and is currently in the process of executing a sole source purchase of fifty transformers from KP Electric that was approved by City Council on July 20, 2022. To further diversify the City’s supply line, staff seeks approval for the sole source purchase of fifty transformers from the Hyundai Corporation, represented by Pacific Power Reps. The Hyundai quote is lower than Howard in both unit price and estimated lead time at 210 days. Purchasing these fifty transformers will help meet the City’s anticipated development and maintenance needs over the next three years.
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FISCAL IMPACT
The estimated cost of the transformer purchases is $635,725 with a ten percent (10%) contingency ($63,572) for unforeseen inflated material and/or shipping costs for a total of $699,298. Funding is included in the Electric Fund budget for FY2022-23.
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ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Approval of a purchase order meets the above criteria and is not subject to CEQA. No additional environmental review is required.
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CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal E - Deliver exceptional city services
Goal F - Invest in well-planned infrastructure and growth
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Respectfully Submitted,
Ozro Corulli, Senior Power Engineer
Dan Beans, Electric Utility Director |
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Dominick Casey, City Manager
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