HomeMy WebLinkAboutAgenda Report - December 15, 2010 C-13AGENDA ITEM C"P1$
A� CITY OF LODI
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AGENDA TITLE: Adopt Resolution Authorizing the City Managerto Enter into a Letter of Agreement
between the City of Lodi and CertainTeed Corporation for the Sale of Designated
Municipal Electric Distribution Facilities ($78,842.50)
MEETING DATE: December 15,2010
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: Adopt a resolution authorizingthe City Managerto enter into a
Letter of Agreement between the City of Lodi and CertainTeed
Corporation for the sale of designated municipal electric
distribution facilities ($78,842.50).
BACKGROUND INFORMATION: CertainTeed Corporation is served from four Electric Utility
Department transformers on the north side of its plant. Meters of
three of the transformers are aggregated in
billing with an existing primary -metered account at the south end of their facility. The fourth north -side
transformer is billed separately at a secondary voltage rate.
The customer has chosen to purchase the four north -side transformers in accordance with EUD rules
and regulations, and be assigned to the 11 -primary utility rate tariff. Underthe agreement, CertainTeed
would buy the existing underground secondary distribution equipment, including four transformers, and
associated metering equipment. CertainTeedwill pay the EUD $78,842.50for the existing facilities and
for EUD labor, materials and equipmentto install the new primary meter. CertainTeedwill 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 projectswith
Lodi Iron Works, Ralcorp/Cottage Bakery, Scientific Specialties Incorporated, and Schaefer Systems
International.
It is anticipatedthat this projectwould be completed by February 15, 2011.
FISCAL IMPACT: The initial sale of facilities and services will result in $78,842.50 of revenue to the
EUD. The primary rate is approximately 4 percent lower than the secondary rate;
however, this lower rate is offset for EUD by reduced energy losses, maintenance
and replacement expenses. Netfiscal impact is insignificantto EUD.
FUNDING: Not applicable.
APPROVED:
Konradt Bartlam, City Manager
Adopt a ResolutionAuthorizing the City Manager to Enter into a Letter of Agreement between the City of Lodi and CertainTeed
Corporation for the Sale of Designated Municipal Electric Distribution Facilities ($78,842.50) (ELID)
December 15,2010
Page 2 of 2
� �- 4 �a
Elizabeth A. -Kirkley
Electric Utility Director
Prepared By: Rob Lechner, Manager, Customer Service & Programs
EK/RSUIst
LETTER OF AGREEMENT: SALE OF MUNICIPAL FACILITIES
BETWEEN
THE CITY OF LODI
/_10101
CERTAINTEED CORPORATION
This Letter of Agreement (LOA) is between the City of Lodi (COL) and
CertainTeed Corporation (CC). Byway of this signed LOA, CC agrees to
purchase and maintain designated electric utility facilities as identified on the
attached Appendix A.
In summary, CC will purchase designated underground electric distribution
facilities located at the customer's plant site of 300 S. Beckman Road, as well as
four (4) padmount transformers. Three of these transformer are adjacentto one
another at the north end of the CC facility, and the fourth transformer is located at
the northwest corner of the CC facility. In addition, CC 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 underground
electric distribution facilities) CC also agrees that, henceforth, CC becomes
responsible for said equipment and to pay for all maintenance, repairs and
replacements necessaryfor maintaining said equipment in good and safe
working condition, and CC becomes responsible for any electrical losses within
the designated electric utility facilities. When project is completed, the utility
account(s) impacted by this project will be billed at primary -metered utility rate.
The total purchase price of the equipment and associated labor costs listed on
Appendix A is in the amount of $78,842.50. Note: 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), CC will be
charged any/all additional labor costs above and beyond the costs identified on
Appendix A.
CC agrees to compensatethe 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 December I , 2010.
CERTAINTEED CORPORATION.
j
2.
CITY OF LODI
By:
Konradt Bartlam
Interim City Manager
ATTEST:
Randi Johl, City Clerk
APPROVED AS TO FORM:
D. Stephen Schwabauer
City Attorney
t—M
APPENDIX `A
Purchase existing plant& install
additional facilities
$1,891.00
$1,294.60
$596.40
Purchasefour (4) padmount
transformers
$95,156.00
$21,410.10
$73,745.90
Labor and material costs to
install primary metering
equipment
$2,219.20
$4,500.20
Total
$78 , 842.6 G
Depreciation for overhead material (OHM) based on 40 years service life.
Depreciation for padmount transformer based on 30 years service life.
The scope of work includes, but is not. limited to:
1) Lower existing Primary facilities.
3.
APPENDIX `B'
SALE OF FACILITIES WORKSHEET
Transformer(s):
City Year Current
Number Installed New Value Current Year Value
P1405
1998
$23,789.00
P1508
2009
$23,789.00
P1819
2010
$23,789.00
P1230
1996
$23,789.00
Primary Metering:
Year
Installed New Value
1996 $ 4,161
Underground
Cable:
Feet of Year New Value
Cable Size Installed Price/ft.
#2 XLP
900 CONC. 1996 $ 1.42
New
Labor/Materials:
2010
2010
2010
2010
Current Year
2010
Current Year
2010
Total Cost For
Facility:
$14,273.40
$22,996.03
$23,789.00
$12,687.47
Current
Value
$
2,219.20
Current
Value
596.40
Totals
$73,745.90
2,219.20
596.40
2,281.00
$78,842.50
RESOLUTION NO. 2010-216
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY
MANAGER TO ENTER INTO A LETTER OF AGREEMENT BETWEEN THE
CITY OF LODI AND CERTAINTEED CORPORATION FORTHE SALE OF
DESIGNATED MUNICIPAL ELECTRIC DISTRIBUTION FACILITIES
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WHEREAS, CertainTeed Corporation (CertainTeed) currently has four utility
transformers located at the north end of its facility, three of which are aggregated for billing
purposes with a meter on the south side of the plant with the fourth north -side transformer billed
separately at the secondary utility rate; and
WHEREAS, the City of Lodi Electric Utility Department (EUD) has recommended, and
CertainTeed agrees, that CertainTeed purchase all four north -side transformers and have this
load aggregated under primary metered utility rate; and
WHEREAS, CertainTeed will pay the City of Lodi EUD $78,842.50 for said facilities and
EUD labor, materials, and equipment to install the new meter and make necessary upgrades;
CertainTeed 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 CertainTeed 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, and the Electric Utility Director to administer, a Letter
of Agreement between the City of Lodi and CertainTeed Corporation for the sale of designated
municipal electric distribution facilities and the installation of primary metering in the amount of
$78,842.50.
Dated: December 15, 2010
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hereby certify that Resolution No. 2010-216 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held December 15, 2010, by the following vote:
AYES: COUNCIL MEMBERS — Hansen, Mounce, Nakanishi, and
Mayor Johnson
NOES: COUNCIL MEMBERS— None
ABSENT: COUNCIL MEMBERS — Katzakian
ABSTAIN: COUNCIL MEMBERS—No
—
None
City Clerk
2010-216