Explanation
BACKGROUND: This legislation authorizes the transfer of budget authority between object levels within the Electricity Operating Fund and authorizes the Director of Finance and Management to purchase transformers for the Division of Power and Water. Transformers are necessary for system improvements for conversion from 7200 volts to 14400 volts, for new customers and replacement of stock previously used for new customers, and maintenance including replacement for storm damage and wear or failure.
Because of rapidly increasing copper and steel costs, vendors have not been willing to hold firm prices for transformers for longer than 30 days; therefore, the City has been unable to establish a UTC to obtain the transformers required by the Division of Power and Water for the daily operation and maintenance of its electricity distribution system. Transformer prices have increased as much as 50% over the prices in our last UTC that expired November 30, 2006.
The division requests approval to authorize the Director of Finance and Management to solicit formal bids and to enter into contracts based upon bids received for the purchase of transformers and to authorize an expenditure not to exceed $550,000 from the Electricity Operating Fund. Due to the unique circumstances relating to the aforementioned escalating prices, it is requested that an Auditor's Certificate be established prior to the receipt of the bids received. This is not the usual process but still provides for awarding contracts based on competitive bids and is appropriate when pricing cannot be guaranteed for the duration of the contracting process. If contracts for transformers are awarded through the normal sequence of bids then legislation and contracts, the process would take longer than the bidders are willing to hold their prices and the division will not be able to receive badly needed transformers. The Purchasing Office is currently in the process of soliciting formal bids and awards will be made to the lowest and best bids received in accordance with the competitive bidding procedures of the Columbus City Codes, 1959.
Emergency action is requested due to the need to immediately enter into contracts to hold the bid prices and due to the critical need for transformers necessary to maintain the reliability of the city's electrical distribution system and for new customer installations.
FISCAL IMPACT: $115,000 was budgeted for the purchase of transformers in the 2007 Electricity Operating Fund budget. A surplus in Object Level One: 02, Materials & Supplies, is primarily due to lower than anticipated purchased power costs. A deficit in Object Level One: 06, Capital Outlay, is due to the need to replenish depleted stock of capital commodities required by the Division of Power and Water for its daily operations and new customer installations. This legislation will align the budget authority with projected expenditures. Object Level One: 02, Materials and Supplies, currently has sufficient documents set up to handle bills through January 2008. Therefore, more budget authority in Materials and Supplies is not anticipated at this time for purchase power.
$112,352 was spent in 2005 and $453,118 was spent in 2006 from the Electricity Operating Fund for the purchase of transformers.
Title
To authorize the transfer of budget authority between object levels within the Electricity Operating Fund; to authorize the Finance and Management Director to enter into contracts for the purchase of transformers for the Division of Power and Water based upon formal bids being solicited by the Purchasing Office in accordance with the competitive bidding provisions of Columbus City Codes; to authorize the expenditure of $550,000.00 from the Electricity Operating Fund; and to declare an emergency. ($550,000.00)
Body
WHEREAS, it is necessary to transfer budget authority within the Electricity Operating Fund to align budget authority with projected expenditures; and
WHEREAS, the Department of Public Utilities, Division of Power and Water, has an immediate need to purchase transformers to maintain the reliability of the city's electrical distribution system and for new customer installations; and
WHEREAS, the City has been unable to establish universal term contracts for the purchase of transformers due to rapidly escalating metals costs; and
WHEREAS, it is necessary to authorize the Director of Finance and Management to obtain transformers in accordance with competitive bidding provisions and Title 39 of the Columbus City Codes, 1959, to meet the immediate needs of the Division of Power and Water; and
WHEREAS, emergency action is necessary to establish funding for the purchase of transformers so that contracts may be established as soon as possible after the receipt of bids; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Public Utilities, Division of Power and Water, in that it is necessary to purchase transformers for the immediate preservation of the public health, peace, property, safety and welfare; now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the City Auditor be and is hereby authorized and directed to transfer appropriations within the Electricity Operating Fund 550, Dept./Div. No. 60-07, as follows:
FROM
Object Level One: 02
OCA: 600830
Object Level 3: 2233
Amount $330,000.00
TO:
Object Level One: 06
OCA: 606723
Object Level Three: 6621
Amount: $330,000.00
SECTION 2. That the Finance and Management Director be and is hereby authorized to purchase transformers for the Division of Power and Water based upon formal bids obtained by the Purchasing Office and awards made to the lowest and best bidders in accordance with the competitive bidding procedures and Title 39 of the Columbus City Codes, 1959.
SECTION 3. That to pay the cost of the aforesaid purchase, the expenditure of $550,000.00, or so much thereof as may be needed, is hereby authorized from the Electricity Operating Fund 550, Division Number 60-07, OCA Code 606723, Object Level Three 6621.
SECTION 4. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.