HomeMy WebLinkAboutAgenda Report - February 21, 2007 E-05E105
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(D CITY OF LORI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Enter into Letters of
Agreersent Between the City of Lodi and the Following Businesses for the
Sale of Designated Municipal Electric Distribution Facilities: Lodi Iron Works
($39,0X.65) and CertainTeed Corporation ($42,312.05) (EUD)
MEETING [SATE: February 21, 2407
PREPARED BY: Electric: Utility Director
RECONSENDED ACTION: Adopt a resolution authorizing the City Manager to enter into
Letters of Agreement between the City of Lodi and the following
businesses for the Safe of Designated Municipal Electric
Distribution Facilities: Lodi Iron Works ($39,022.65) and CertainTeed Corporation ($42,312.05) (EUD`
BACKGNOUND INFORMATION:
Loct Iroa ftft Several years ago, the Electric Utility Department (EUD) consolidated three (3) of the
Lodi Iron' ot*s (LIW) electric secondary service (e.g. lower voltage) accounts into one and assigned the
customer to the industrial 1-1 rate, plus an adder of 5% to reflect increased cost of EUD of providing
secondary service (rather than higher voltage primary service). In its recent review of customer rates,
Staff found that the 1-1 plus 5% rate does not officially exist as a rate option. As a result, LIW wishes to
consolidate its two (2) secondary service accounts and upgrade to primary voltage/service. To
accomplish this outcome, LIW will need to purchase existing EUD overhead electric distribution
equipment and padmount transformer, and pay for conversion to primary metering as detailed in the
attached Letter of Agreement (LOA). It is proposed that LIW pay EUD $39,022.65 for the depreciated
cost of facilities and associated metering changes.
C2jkLnfte5j Coenarftn: Currently CertainTeed Corporation has three (3) electric metered services;
one met ., is served as an 1-1 primary service, while the other two meters are G-5 secondary services.
Representatives from CertainTeed have requested that the two G-5 accounts be consolidated to create
another 1-1 primary service. In order to accomplish this task, CertainTeed would need to reconstruct the
existing G-5 services, upgrading these two meters to primary voltage/service. To achieve this,
CertainTeed must purchase existing EUD overhead electric distribution equipment, including an existing
padmount transformer, and install a new primary electric meter. CertainTeed would pay EUD $42,312.05
for the depreciated cost of said facilities and for metering changes as per the attached Letter of
Agreement.
The proposed arrangements conform to City Council approved Electric Rules and Regulations:
Rude 2, Section 3a: "Three-phase demand loads in excess of 500 KVA, but less than 7000 KVA
may, with City approval, be supplied by means of a primary service at the primary distribution
voltage available at the location."
APPROVED: 2ZLO== a
Blair Kin , City Manager
Adopt iosollution Authorizieg the City Manager to Enter into Letters of Agreement Between the
City of Lodi and the Follow*9 Businesses for the Sale of Designated Municipal Electric
Distribullion Facilities: Lodi Iron Works ($39,022.66) and CertainTeed Corporation ($42,313.05)
(EUD)
February 21, 2007
Page 2 of 2
1W1e 17, Section D (Totalized Wtering). "A customer having more than one service on the same
premise may have such services totalized for billing purposes, provided the following conditions
exist: Each service to be totalized must: 1) be supplied by the same distribution feeder (under
normal operating conditions); 2) have a maximum demand greater than or equal to 400 kW for
three or more consecutive months."
The two industrial customers are interested in entering into the attached LOA'S with EUD as soon as
possible. If the Council approves these LOA's, Electric Utility staff would then order required primary
metering equipment and related materials. It is anticipated that both projects would be completed by
June 1, 2007.
FISCAL IMPACT: The initial sale of facilities and services will result in revenue to EUD in the amount of
$81,334.70.
FUNDING: Not applicable.
George P. Morrow
Electric Utility Director
Prepared By: Rob Lechner, Manager, Customer Service & Programs
GFM/RSUIst
Attachments (2)
LETTER OF AGREEMENT: SALE OF MUNICIPAL FACILITIES
BETWEEN
THE CITY OF LODI
AND
LODI IRON WORKS
This Letter of Agreement (LOA) is between the City of Lodi (COL) and Lodi Iron
Works (I". By waV of this signed LOA, LIW agrees to purchase and maintain
designated electric uftty faci#ties as identified on the attached Appendix A.
In summary, LIW will purchase designated overhead electric distribution facilities
located at the customer's plant site of 840 S. Sacramento Street, as well as an
existing padmount transformer. In addition LIW agrees to purchase all necessary
primary metering equipment and compensate the COL for the labor costs to
install said equipment.
In purchasing the aforementioned equipment (padmount transformer and
overhead electric disaibution facilities) LIW also agrees to properly maintain said
equipment and be responsible for repairing said equipment in the event of
equipment failure.
The total purchase p*e of the equipment and associated labor costs as listed on
Appendix A is $39,022.65. Mote: in the event that the labor required to perform
this project occurs after COL operating hours (7.00am to 4:30pm, Monday
through Friday, excluding holidays and weekends), VIN will be charged any/all
additional labor costs above and beyond the costs identified on Appendix A.
This sale is made on an "as is" basis and buyer acknowledges that seller makes
no warranties with retard to the items in Appendix A.
LIW agrees to compensate the COL for the total amount listed in the LOA prior to
irAiation of said project.
IN WITNESS THERNEOF, *e Parties have caused this ASreement tobe
executed by their Ady authorised oliicsrs and ttwir seal to be affixed, as of
the day and year hwein wren dated , 2007.
(#TY OF LODI
Nair King
City Manager
ATTEST:
FOndi Johl
City Clerk
APPROVED AS TO DORM:
D. Staph SchwabaUerm
City Attorney
DB
. �^ 4,A..I.S- %L, , r ar'-
F. Mwow
E ctric Utility Director
2
• R � � � fir'
r -
.W
Date
Purchase existing plant (OHM)
Purchase existing padmount
transformer
Labor and material costs to
install primary metesing
equipment
Total
APPENDIX A
Installation Depreciation
Cost Allowance Buy Out CosVTotal
$15,467.62
$2,320.14
$13,147.48
$10,096.17
$2,019.23
$8,076.94
$17,798.23
$0.00
$17,79823
$43,362.02
$4,339.37
$39,022.65
Padmount transformer and related overhead equipment was installed in February 2000.
Depreciation for overhead material (OHM) based on 40 years service life.
Depreciation for padmount transformer based on 30 years service life.
For conversion of service metering to primary metering, the following equipment
and/or materials will be required:
1. 55 foot utilty pole.
2. 12kV 3-phose metering equipment.
3. New undelground 15kV cable from the riser to the padmount
transformer.
4. Metering cabinet and related equipment.
5. Overhead material and related hardware.
41
LETTER OF AGREEMENT: SALE OF MUNICIPAL FACILITIES
BETWEEN
THE CITY OF LODI
AND
CERTAINTEED CORPORATION
This Letter of Agreement (LOA) is between the City of Lodi (COL) and Certainteed
Corporation (CERTAINTEED). By way of this signed LOA, CERTAINTEED agrees to
purchase and maintain designated electric utility facilities as identified on the attached
Appendix A.
CERTAINTEED will purchase designated overhead electric distribution facilities located at
the customer's plant site of 300 S. Beckman Road, as well as an existing padmount
transformer. In addition CERTAINTEED agrees to purchase all necessary primary
metering equipment and compensate the COL for all required labor costs to install said
equipment.
in purchasing the aforementioned equipment (padmount transformer and overhead electric
distribution facilities) CERTAINTEED also agrees to properly maintain said equipment for
the life of the equipment, and pay for all repairs necessary for maintaining said equipment
in the event of equipment failure, including replacement of equipment if necessary.
The total purchase price of the equipment and associated labor costs listed on Appendix A
is capped in the amount of $42,312.05. Note: in the event that the labor required to perform
this project after COL operating hours (7:00am to 4:30pm, Monday through Friday,
excluding holidays and weekends), CERTAINTEED will be charged any/all additional labor
costs above and beyond the costs identified on Appendix A, if such after operating hours
was authorized by CertainTeed.
This sale is made on an "as is" basis and buyer acknowledges that seller makes no
warranties with regard to the items in Appendix A.
CERTAINTEED agrees to compensate the COL for the total amount listed in the LOA prior
to completion of said project.
N WITNESS THEREOF, the Parties have caused this Agreement to be executed by
their dtdy authorised offioers and their seal to be affixed, as of the day and year
Iaereifn witten dated , 2007.
CITY OF LODI
Fair King
City Manger
ATTEST:
Randi Johl
City Clerk
APPROVED AS TO' FORM:
D. Stephen Schw
City Attorney
Mectric Utility Director
2
CERTAINTEED, CORPORATION
By
r i -e— &,e -e --
Name
V 'jk
Title
2-2_0�-
Date
Purchase existing plant (OHM)
Purchase existing pidmount
transformer
Labor and material costs to
install primary meteiing
equipment
Total
APPENDIX A
Installation Depreciation
Cost Allowance Buy Out Cost/Total
$13,253.00
$1,987.95
$11,265.05
$18,728.00
$3,746.00
$14,982.00
$16,065.00
$0.00$16,065-00
$48,046.00
$5,733.95
$42,312.05
Padmount transformer and related overhead equipment was installed in February 2000.
Depreciation for overheard material (OHM) based on 40 years service life.
Depreciation for padmount transformer based on 30 years service life.
For conversion of service metering to primary metering, the following equipment and/or
materials will be required:
1. Reframe existing utility pole.
2. 12kV, three -prase metering system and appurtenances.
3. Reconstruct termination of the 15kV underground riser cable.
4. Metering cabinet and accessories.
5. Overhead mallerials and required hardware.
3
RESOLUTION NO. 2007-31
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGER TO EXECUTE
LETTIERS OF AGREEMENT BETWEEN THE CITY OF
LODI AND LODI IRON WORKS AND CERTAINTEED
CORPORATION FOR THE SALE OF DESIGNATED
MUNICIPAL ELECTRIC DISTRIBUTION FACILITIES
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City MaAager to execute Letters of Agreement between the City of Lodi
and Lodi Iron Works, in the amount of $39,022.65, and CertainTeed Corporation, in the
amount of $43,312.05, for the sale of designated municipal electric distribution facilities.
Dated: February 21, 2007
-------------
I hereby certify that Resolution No. 2007-31 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held February 21, 2007, by the following
vote:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Katzaklan, Mounce,
and Mayor Johnson
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
RANDI JOHL
City Clerk
2007-31