Submitted By: Marie Brooks
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Presentation By: Doug Peebles
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Department: Electric Utility
STAFF RECOMMENDATION (Motion Ready):
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Approve a one-year renewal with Gresco Supply, Inc. for transformer supply and delivery services for an estimated aggregate expenditure of $2,950,328
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Operational Excellence
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
Transformers are used daily by the Electric Department for the repair, maintenance, and expansion of our electric system. Adequate transformer inventory levels must be maintained to support daily operations and development projects within the City of Ocala Electric Utility (OEU) service territory.
On March 17, 2020, Council approved the Agreement for Transformer Supply and Delivery Services, Contract No. ELE/190961, between the City of Ocala (City) and Gresco Supply, Inc. (Gresco) with an estimated aggregate expenditure amount of $2,462,671 for the initial three-year contract term.
Council approved the expenditure of additional funds under Contract No. ELE/190961 on September 6, 2022, and September 5, 2023. The first of two available one-year renewal terms was exercised and approved by Council on March 7, 2023. This renewal term will expire on March 2, 2024.
FINDINGS AND CONCLUSIONS:
Suppliers prioritize new transformer purchases based on existing contracts held by purchasing entities. Gresco proposed enhancing its buying power by committing to supplying Ocala with 25 single-phase pad mount transformers monthly until supply chain challenges are resolved. This proposal involves a temporary 20 percent price increase from the quarterly pricing (see attached pricing list) but grants suppliers the ability to secure purchase power with manufacturers.
Contract No. ELE/190961 is utilized for the purchase and stock of Ester oil-filled single and three-phase transformers. Commodity shortages and manufacturing limits have more than doubled the price of many transformers used within the OEU electric system. The City is experiencing an increase in demand for transformers due to a combination of many new residential and commercial development projects and the need to replace aging equipment. Additionally, the surge in demand for underground transformers across the country has prompted City staff to proactively secure additional inventory.
Staff is seeking approval to exercise the second renewal option with Gresco Supply, Inc. with an estimated expenditure amount of $2,950,328 for the period March 3, 2024, through March 2, 2025.
FISCAL IMPACT:
Items are purchased on inventory and will be accounted for using 457-141-000-000-41-14100. The department will adhere to budgeted funds when items are issued for maintenance and projects.
PROCUREMENT REVIEW:
These goods were procured in compliance with the City’s Procurement Policy.
LEGAL REVIEW:
This Amendment will be reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Approve with Changes
• Table
• Deny