CITY COUNCIL AGENDA ITEM
Memo Date: April 8, 2024
Agenda Date: June 4, 2024
Prepared By: James Mitchell, Water Treatment Manager
Through: John A. Walsh, P.E., Utilities Director
Requested Action:
title
To Approve a Resolution Amending the FY24 Budget (BAF#24-079-T) in the Amount of $310,121.00 for Duke Energy Services; To Authorize the City Manager to Execute Contract Amendment #2 of the Duke Premier Power Contract upon Approval of the Final Contract Amendment Language by the City Attorney and the City Manager; To Authorize the City Manager to Pay $130,120.23 for Generator Services Rendered
End
body
BACKGROUND:
The primary electrical utility provider for the Dyal Water Treatment Plant is Duke Energy. Due to a rate increase in early 2023, P.O. 81632 is projected to be $180,000.00 short. The rate increase was not known during the FY24 budget planning process.
Staff recommends a budget adjustment in the amount of $180,000.00 to adequately fund P.O. #81632 for the remainder of FY24. The budget adjustment is for anticipated rate increase shortfall as well as an additional unanticipated pro-active power expense.
In addition, currently the City of Cocoa and Duke Energy have an agreement to provide backup generator power at the Dyal Water Treatment Plant. On February 26, 2020, City Council approved a Sole Source Resolution and Executed a Multi-Year Premier Power Services Contract between the City of Cocoa and Duke Energy Florida, LLC (Duke) to provide generator power at the Dyal Water Treatment Plant.
After careful review by Staff with Duke Energy personnel, it was determined that the current power agreement does not adequately address pro-active power transition requests and the extra fuel and maintenance costs that Duke Power incurs as a result of this action. Staff has reviewed all proactive use impacts and is agreeable to an additional total payment of $130,120.23 for previous run time, fuel and maintenance costs to Duke Energy incurred over the last three years as a result of proactive power transition use of the generator.
Because these costs are outstanding, Staff agrees that payment should be made immediately while the details of Contract Amendment #2 addressing payment of future costs associated with pro-active power transition requests, is finalized both with Staff and with Duke to properly reflect and outline future costs.
Upon Council’s approval of the budget adjustment necessary to fund electric utilities, the City Manager will issue and approve a change order to purchase order #81632 and continue to pay invoices related to utility services required by the city for normal routine operations up to the amount budgeted and appropriated by the City Council.
STRATEGIC PLAN CONNECTION:
N/A
BUDGETARY IMPACT:
Budgeted No
If not budgeted, is amendment/transfer attached? Yes, BAF#24-079-T
Amount Requested $310,121.00
Transfer from Account Number 421-4010-536.39-00
Transfer from Account Name Contingency
Transfer Amount ($310,121.00)
Transfer to Account Number - 1 421-4020-536.43-00
Transfer to Account Name Electric/Water/Sewer
Transfer Amount $180,000.00
Transfer to Account Number - 2 421-4020-536.34-00
Transfer to Account Name Contract Services
Transfer Amount $130,121.00
If a P.O. Change Order is involved please complete the following:
Change Order Amount $180,000.00
Original Purchase Order 81632
Original P.O. Amount $1,441,800.00
For this Agenda Item note Prior Change Order Information:
Total number of change orders to date: 0
Total amount in change orders to date: $0
New Purchase Order amount $1,621,800.00
PREVIOUS ACTION:
On February 26, 2020, File 21-290 City Council approved a Sole Source Resolution and execution of a Multi-Year Premier Power Services Contract between the City of Cocoa and Duke Energy Florida, LLC (Duke). This contract provides back-up generator services for a monthly fee of $36,140 over a contract period of 10 years with generator power located at the plant but owned, operated, maintained, and monitored 24/7 by Duke. The current generators are at the end of their useful lives and it was determined by staff that this contract was a more cost-effective option and doesn’t require any upfront capital investment.)
RECOMMENDED MOTION:
Recommendation
To Approve a Resolution Amending the FY24 Budget (BAF#24-079-T) in the Amount of $310,121.00 for Duke Energy Services; To Authorize the City Manager to Execute Contract Amendment #2 of the Duke Premier Power Contract upon Approval of the Final Contract Amendment Language by the City Attorney and the City Manager; To Authorize the City Manager to Pay $130,120.23 for Generator Services Rendered.