City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: March 3, 2025
Report #:2410-3570
TITLE
Approval of Purchase Order C25190365 with Kone, Inc. in the Not To Exceed Amount of $672,686 for Elevator, Chairlift, and Platform Lift Maintenance, Repair, Testing, and Related Services for Five Years; CEQA Status – Categorically Exempt under Sections 15301 and 15302
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to approve Purchase Order C25190365 with Kone, Inc. for elevator, chairlift, and platform lift maintenance, repair, testing, and related services for a five-year contract term in the not-to- exceed amount of $672,686, which includes $372,686 for basic maintenance services and $300,000 for repairs, upgrades, parts due to misuse, vandalism, and other unforeseen circumstances not covered by the maintenance agreement for a five year term.
BACKGROUND
There are seventeen passenger elevators, one chair lift, and one dumb waiter located within City buildings. The California Division of Occupational Safety and Health (Cal/OSHA) Elevator Section regulates all elevators in the State of California. The Section recommends standards, regulations, and amendments to the California Elevator Rules as outlined in the Labor Code Section 7300–7324.2 and Title 8 subchapter 6: Elevator Safety Orders. These Safety Orders mandate periodic maintenance and inspections to ensure the safety of the riding public and elevator workers.
The City executed contract S16159873 with Kone, Inc with the term of July 1, 2015 through June 30, 2018, utilizing Omnia Cooperative Agreement, formerly US Communities. The City executed contract S19172537 with Kone, Inc with the term of July 1, 2018 to March 31, 2019 while staff attempted to process another US Communities cooperative agreement.
Unfortunately, legal teams for the City and Kone were unable to agree on contract language after several months of negotiations. COVID further hindered finalizing a contract. This new cooperative purchasing agreement establishes a new five-year contract with Kone, Inc.
ANALYSIS
Procurement Process
The Statement of Work # 1 (“SOW”, Attachment A) is issued pursuant to Purchasing Agreement # 2019.001564 dated October 1, 2019, between University of California, CA and Supplier, Kone, Inc. (“Agreement”)1, and Amendment No. 2 with renewal date of September 1, 2024 through August 31, 20292. Amendment No. 1 dated December 23, 2019, updates Section 4 of the Agreement regarding price increases and price decreases.3 This Agreement was established through OMNIA Partners (OMNIA). The scope of work includes contracted services for elevator, chairlift, and platform lift maintenance, repair, testing, and related services. Depending on the type of elevator this will include monthly, quarterly, and annual preventative maintenance. The scope of work also includes additional services, which include repairs, upgrades, parts due to misuse, vandalism, emergency response to entrapments, and other unforeseen circumstances not covered by the maintenance agreement.
Per Palo Alto Municipal code 2.30.360(j), the City can take advantage of cooperative purchasing agreements provided: (i) the services are solicited using methods substantially similar to those required under the Municipal Code, as determined by the Procurement Officer; and (ii) the contract is consistent with the requirements under the Municipal Code. OMNIA Partners (OMNIA) provides discounts for government entities purchasing elevator service and maintenance. The cooperative purchasing agreement contract was competitively solicited and publicly awarded through the cooperating purchasing organizations and the purchase orders are consistent with the requirements of the Municipal Code. Cooperative purchasing programs allow government organizations to use a single solicitation with the best value and favorable terms and conditions. The use of this OMNIA Partners agreement will allow for substantial saving compared to the current agreement. The City is currently paying $525 per hour for the services of a licensed elevator mechanic. The first year per hour rate for the licensed elevator mechanic using the OMNIA Partners agreement is $293.
FISCAL/RESOURCE IMPACT
The purchase order (Attachment C) recommended in this report will be funded jointly by the Public Works Department (PWD) and the Office of Transportation (OOT). Maintenance costs are determined by the elevator’s type, age, and the number of floors in the structure.
Attachment B provides a breakdown of the monthly cost for each City facility. The majority of 1 Kone General Service Cooperative Agreement for the Maintenance and Repair of Elevators 2019.00156; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/public- services/contracts/2019001564_kone_-university-of-california-purchasing-agreement.pdf 2 Kone Amendment #2 to the General Service Cooperative Agreement for the Maintenance and Repair of Elevators 2019.00156; 2019.001564_kone-university-of-california-amendment-2-to-agreement.pdf 3 Kone Amendment #1 to the General Services Cooperative Agreement for the Maintenance and Repair of Elevators 2019.00156; 2019.001564_kone-university-of-california-amendment-1-to-agreement.pdf elevators requiring higher maintenance are located within public parking facilities, which fall under the OOT administration. This is reflected in a cost-sharing split where 45% of funding is provided by PWD and 55% by OOT. Funding for Year 1 of this contract is available in the Fiscal Year 2025 Adopted operating budgets of both departments. The funding for the remaining four years of the contract will be subject to appropriation of funds through the annual budget process. The total contract amount of $672,686 includes $372,686 for basic services and $300,000 for additional services for repairs, upgrades, parts due to misuse, and vandalism not covered by the maintenance agreement. The fee schedule is detailed below according to the contract terms and funding sources:
STAKEHOLDER ENGAGEMENT
Staff and the public will be notified if testing or repair work will be disruptive to their use of workspaces or parking facilities.
ENVIRONMENTAL REVIEW
This contract is categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15301 of the CEQA guidelines as maintenance of an existing facility and no further environmental review is necessary.
ATTACHMENTS
Attachment A: Kone Statement of Work
Attachment B: Kone Five-Year Costs Summary
Attachment C: Kone Purchase Order C25190365
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer