Submitted By: Kimberly Foster
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Presentation By: Doug Peebles
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Department: Electric Utility
STAFF RECOMMENDATION (Motion Ready):
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Adopt Budget Resolution 2024-145 amending the Fiscal Year 2023-24 budget to appropriate additional funds from the Electric Reserve for Contingencies account to support the purchase of a fourth power transformer from Virginia Transformer Corp. in the amount of $1,880,372
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OCALA’S RELEVANT STRATEGIC GOALS:
Operational Excellence
PROOF OF PUBLICATION:
Bid was released to the public October 26, 2023.
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BACKGROUND:
The City of Ocala Electric Utility (OEU) Water Plant substation is the primary distribution hub for the Northeast 36th Avenue corridor. The existing Water Plant power transformer has been in service for 38 years and will exceed its operational lifespan by 2026. Even with regular maintenance, the risk of failure increases exponentially with age, which can lead to significant power outages and impact residential and commercial customers.
In recent years, the OEU service territory has experienced substantial growth. Numerous planned residential and commercial developments are in progress which, when completed, will lead to a significant increase in OEU's load demand. A large new power facility fed from the Water Plant substation will soon be in service. OEU must upgrade the existing 30MVA transformer to a 41.6MVA transformer to accommodate the anticipated load demand increase and future growth.
FINDINGS AND CONCLUSIONS:
On October 26, 2023, the City issued Invitation to Bid (ITB) No.: ELE240044 Power Transformers 25/33.3/41.6 MVA to the public. The bid closed December 1, 2023, with three vendors submitting bids. Virginia Transformer Corp. was the lowest bidder, meeting all required specifications. On March 5, 2024, the Council approved the purchase of three transformers based on the results of this bid.
OEU is requesting the purchase of a fourth transformer on this contract. Current power transformer lead times are 14 to18 months. Purchasing an additional transformer is a proactive step to mitigate risks associated with equipment failure. Having the necessary infrastructure is essential to meet the continued growth needs in the OEU service territory.
FISCAL IMPACT:
This request will appropriate additional funds for the purchase of a fourth power transformer from Virginia Transformer Corp. Funds will be transferred from the Electric Reserve for Contingency account #457-099-999-531-81-99800 and appropriated to 332-032-194-531-69-65010 for the new transformer purchase.
PROCUREMENT REVIEW:
This purchase will be procured in compliance with the City’s procurement policy.
LEGAL REVIEW:
This Agreement has been reviewed and approved for form and legality by City Attorney, William E. Sexton.
ALTERNATIVE:
• Adopt with Changes
• Deny
BUDGET RESOLUTION 2024-145
A RESOLUTION AMENDING THE FISCAL YEAR 2023-24 BUDGET TO APPROPRIATE ADDITIONAL FUNDS FROM THE ELECTRIC RESERVE FOR CONTINGENCY ACCOUNT TO SUPPORT THE PURCHASE OF A FOURTH POWER TRANSFORMER FROM VIRGINIA TRANSFORMER CORP. IN THE AMOUNT OF $1,880,372
WHEREAS, the City of Ocala Electric Waterplant Substation transformer has been in service for 38 years and is anticipated to surpass its operational useful life by 2026; and
WHEREAS, the anticipated growth for the service area supported by that transformer requires increased load and a new facility; and
WHEREAS, on October 26, 2023, the City issued its Invitation to Bid (ITB) No.: ELE240044 Power Transformers 25/33.3/41.6 MVA to the public. The bid closed on December 1, 2023, with three vendors submitting bids; and
WHEREAS, Virginia Transformer Corp. was found to be the lowest bidder, meeting all required specifications; and
WHEREAS, on March 5, 2024, Council approved the purchase of three transformers based on the results of this bid; and
WHEREAS, Virginia Transformer Corp. has agreed to provide a fourth transformer purchase at the low bid price of $1,880,372; and
WHEREAS, purchasing an additional transformer is a proactive step to mitigate risks associated with equipment failure.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF OCALA, FLORIDA, duly assembled in regular session, that the Fiscal Year 2023-24 budget be amended as outlined below:
SOURCE:
457-099-999-531-81-99800 Reserve For Contingencies ($1,880,372)
332-381-000-000-19-38457 Trf In-Electric Constr Fund $1,880,372
USE:
457-099-999-531-81-91332 Trf - Electric Fund $1,880,372
332-032-194-531-69-65010 Construction In Progress $1,880,372
This resolution adopted this ______ day of ______________________, 2024.
ATTEST: CITY OF OCALA
By: By:
Angel B. Jacobs Barry Mansfield
City Clerk President, Ocala City Council
Approved as to form and legality:
By: _________________________________
William E. Sexton
City Attorney
Reviewed for accounting accuracy & completeness:
By: _________________________________
Peter A. Lee
City Manager