HomeMy WebLinkAboutAgenda Report - August 4, 2010 D-15AGENDA ITEM 1> owl 5
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Adopt Resolution Authorizing the City Managerto Enter Into a Letter of Agreement
Between the City of Lodi and Ralcorp/Cottage Bakeryfor the Sale of Designated
Electric Distribution Facilities ($166,234) (EUD)
MEETING DATE: August 4, 2010
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to enter into a
Letter of Agreement between the City of Lodi and Ralcorp/Cottage
Bakeryfor the sale of designated Electric Distribution Facilities in
the amount of $166,234.
BACKGROUND INFORMATION: Ralcorp/Coftage Bakery (RCB) currently has one utility account
assigned to the G5 secondary rate tariff. Representatives from RCB
met with the Lodi Electric Utility Department (EUD) earlier this year,
requesting that the existing 480 -volt secondary account be transferred to lower-cost G5 primary service.
To accomplish this task, RCB would buy the existing secondary distribution equipment, including five
transformers, and replace five secondary meters with two new primary electric meters. RCB will pay EUD
$166,234 for the existing facilities and for EUD labor, materials and equipment to install the new meters
and make upgrades requested by RCB. RCB will become responsiblefor future maintenance and
replacement of the transferred equipment and its electrical losses.
The proposed arrangement conforms to past practice and City Council -approved Electric Rules and
Regulations. Over the past several years, the City has engaged in similar primary -metered projects with
CertainTeed Corporation, Lodi Iron Works and Schaefer Systems, Incorporated.
It is anticipated that this project would be completed by October 1, 2010.
FISCAL IMPACT: The initial sale of facilities and services will result in revenue to the EUD in the
amount of $166,234. The primary rate is approximately 4 percent lower than the
secondary rate, however, this lower rate is offset by reduced maintenance and
replacement expenses. Net fiscal impact is insignificant to the Utility.
FUNDING: Not applicable.
4
Eli . Kirk ey
Electric Utility Director
Prepared By: Rob Lechner, Manager, Customer Service & Programs
EAK/RSUIst
APPROVED: k V
Konya t Bartlam, Interim City Manager
LETTER OF AGREEMENT: SALE OF MUNICIPAL FACILITIES
BETWEEN
THE CITY OF LODI
AND
RALCORP/COTTAGE BAKERY
This Letter of Agreement (LOA) is between the City of Lodi (COL) and
Ralcorp/Cottage Bakery (RCB). By way of this signed LOA, RCB agrees to
purchase and maintain designated electric utility facilities as identified on the
attached Appendix A.
In summary, RCB will purchase designated overhead electric distribution
facilities located at the customer's plant site cf 40 Neuharth Street, as well as five
transformers. In addition RCB 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 (transformers and overhead
electric distribution facilities) RCB also agrees that, henceforth, RCB becomes
responsible for said equipment and to pay for all maintenance, repairs, and
replacements necessary for maintaining said equipment in good and safe
working condition and RCB becomes responsible for any electrical losses within
the designated electric utility facilities.
The total purchase price of the equipment and associated labor costs listed on
Appendix A is in the amount of $166,234.00. Note: in the event that the labor
required to perform this project occurs outside COL normal operating hours
(7:00am to 4:30pm, Monday through Friday, excluding holidays and other non -
work days), RCB will be charged any/all additional labor costs above and beyond
the costs identified on Appendix A.
RCB agrees to compensate the COL for the total amount listed in the LOA
prior to completion of said project.
1.
IN WITNESS HEREOF, the parties hereto have entered into this Letter of
Agreement dated August , 2010.
CITY OF LODI, a municipal corporation
Konradt Bartlam
Interim City Manager
ATTEST:
Randi Johl, City Clerk
APPROVED AS TO FORM:
eitySorney chwat
2.
RALCORP/COTTAGE BAKERY
By:
Title: �� n���J�i►
Purchase existing plant& install
additional facilities
Purchase existing padmount
transformer & overhead trans.
Labor and material costs to
install primary metering
equipment
Total
APPENDIX 'A'
Installation Depreciated
Allowance Buy Out Cost/Total
$61,109 $1,403 $59,705
$117.1690. $30,599 $87,091
$19,438
$166,234
Depreciation for overhead material (OHM) based on 40 years service fife.
Depreciation for padmount transformer based on 30 years service life.
The scope of work includes, but is not limited to:
1) Underbuild a customer owned 12kV line.
2) Install two separate 12 kV 3-phase metering facilities.
3) Lower 4 existing riser assemblies.
4) Customer to install 2 metering cabinets to City specifications, at the
customers expense.
3.
" `? RESOLUTION 10::2010'1.34 . 1
A RESOLUTION OF THE LODI CITY COUNCILAUTHORIZING THE
CITY MANAGERTO ENTER INTOA LETTER OF AGREEMENT BETWEEN
THE CITY OF LODI AND RALCORP/COTTAGE BAKERY FORTHE SALE OF
DESIGNATED MUNICIPAL ELECTRIC DISTRIBUTION FACILITIES
WHEREAS, Ralcorp/Cottage Bakery (RCB) currently has one utility account assigned to
the G5 secondary rate tariff; and
WHEREAS, representatives from RCB have requested that the existing 480 -volt
secondary account be transferred to G5 primary service at 12,000 V, and in order to accomplish
this task, would buy the existing secondary distribution equipment, including five transformers
and replace five secondary meters with two new primary electric meters; and
WHEREAS, RCB will pay City of Lodi Electric Utility Department (EUD) $166,234 for
said facilities and EUD labor, materials, and equipment to install the new meters and make
upgrades requested by RCB; RCB will become responsible for maintenance and replacement of
the transferred equipment and its electrical losses; and
WHEREAS, the proposed arrangement conforms to past practice and City Council -
approved Electric Rules and Regulations; and
WHEREAS, staff recommends entering into a Letter of Agreement with RCB for the
facilities and upgrades as outlined above, thus allowing staff to order the required primary
metering equipment and related materials.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to enter into a Letter of Agreement between the City of Lodi and
Ralcorp/Cottage Bakery for the sale of designated municipal electric distribution facilities in the
amount of $166,234.00. This figure includes the purchase of five transformers, primary metering
equipment, and labor costs associated with the installation of said equipment and upgrading the
existing system to accommodate the customer's need.
Dated: August 4, 2010
I hereby certify that Resolution No. 2010-134 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held August 4, 2010, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN
COUNCIL MEMBERS— Hansen, Hitchcock, Johnson, and
Mayor Katzakian
COUNCIL MEMBERS — None
COUNCIL MEMBERS— Mounce
COUNCIL MEMBERS— None
2010-134
(&H
City Clerk