REPORT TO COUNCIL
SUBJECT
Title
Award an On-Call Engine Maintenance and Repair Contract in the Amount of $750,000 to Peterson Power Systems, Inc. (F24-208)
Report
STAFF RECOMMENDATION
Recommendation
Take the following actions:
- Award a one-year, on-call contract in a not-to-exceed amount of $750,000 to Peterson Power Systems, Inc. of Pasadena, CA, for on-call engine maintenance and repair services;
- Authorize the City Manager to execute the contract when all conditions have been met; and
- Authorize the City Manager to amend and renew the contract for up to three additional one-year periods, subject to available budget, if pricing and service remain acceptable to the City.
Report
BASIS FOR RECOMMENDATION
The on-call services contract is required to maintain several engines located at various facilities related to water and sewer infrastructure.
The Power Generation Facility (PGF) at the Water Pollution Control Plant (WPCP) is an electrical generation power plant commissioned in 1997. The PGF is owned and operated by the City. It has the capacity to generate 1.6 megawatts of electricity. The facility is equipped with two Caterpillar Model 3516 Engine Generator sets with Caterpillar Brushless SR4 Generators. The engines are designed to burn lean fuels, including landfill gas, digester gas, air blended natural gas, or any combination of those gases. Digester and landfill gases are free by-products of waste processing and are used in place of natural gas and electricity to help offset two-thirds of the Plant’s energy expenses, estimated at approximately $1.2 million annually. Two standby generators are also located at the WPCP, one manufactured by Caterpillar and one by Kohler.
Additionally, the water and sewer pumping stations utilize:
- Two Caterpillar engines at Baylands Pump Station No.1,
- One Generac and one Perkins back-up generator engines at Baylands Pump Station No.2, which drive storm water pumps,
- Emergency water pumps powered by Waukesha engines at the Mary-Carson water plant, and
- Generac and Perkins backup generators at Wolfe-Evelyn Water Plants.
Stringent air regulatory emission requirements have led to additional maintenance including yearly top-end overhauls. It is anticipated that ongoing costs for the maintenance will be higher. With the engines aging and the quality of the landfill gas decreasing, it is anticipated that additional corrective maintenance needs will arise for the engines at the WPCP.
An Invitation for Bids (IFB) was advertised on the DemandStar public procurement network on March 27, 2024, with no bids received. Pursuant to SMC 2.08.110 (d), staff requested a quote from Peterson Power Systems. Peterson Power Systems, Inc. is the authorized Caterpillar engine dealer in the Bay Area. Additionally, Peterson Power technicians are qualified to repair the various types of other engines. Therefore, staff is recommending award of contract to Peterson Power Systems, Inc for the generator maintenance needs.
A new facility master plan which is in development will address replacement of the Power Generation Facility. Further contract needs will be addressed as the design and schedules are better defined.
ENVIRONMENTAL REVIEW
The action being considered is exempt from California Environmental Quality Act (“CEQA”) revew pursuant to CEQA Guidelines section 15301 as it is for repair and maintenance of existing equipment and facilities that will involve negligible or no expansion of the existing use.
FISCAL IMPACT
Budgeted funds are available in the Wastewater Management Fund (Fund 6081) under programs 14300 (Water Distribution), 14800 (Wastewater Collections), 14600 (Wastewater Treatment). Additional funding is available in the Wastewater Equipment Replacement Fund (P20201), and Project 830210 - Repairs to the Power Generation Facility.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment contract
___ General policy and legislative actions
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Tim Kirby, Director of Finance
Reviewed by: Ramana Chinnakotla, Director of Environmental Services
Reviewed by: Jaqui Guzmán, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Draft Services Agreement