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 bid...
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