City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: August 10, 2026
Report #:2601-5844
TITLE
Approval of Contract No. C27196740 with Blackhawk Painting Inc. in the Amount of $735,500 Over a Period of 18 Months for Electric Substations Equipment and Mechanical Structures Painting Services; Authorization for the City Manager or Their Designee to Execute Change Orders in an Amount Not-to-Exceed of $73,550, for a Total Not-to-Exceed Contract Amount of $809,050; and Approval of a Budget Amendment in the Electric Fund; CEQA Status:
Categorically Exempt Under CEQA Guidelines Section 15301.
RECOMMENDATION
Staff recommend that Council:
1. Approve and authorize the City Manager or their designee to execute contract No.
C27196740 with Blackhawk Painting Inc.1 (Blackhawk) for surface preparation and painting of substation electric equipment and mechanical structures in an amount not to exceed $735,500;
2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with Blackhawk for related but unforeseen work which may develop during the contract term, the total value of which shall not exceed $73,550 or 10% of the contract amount, for a total contract not-to-exceed amount of $809,050; and
3. Amend the Fiscal Year 2027 Budget Appropriation for the Electric Operating and Capital budgets (requires a two-thirds approval by the Council) by:
a. Increasing the contract services operating budget in the Electric Fund by $809,050; and
b. Decreasing capital improvement budget EL-89044 (Substation Facility Improvements) in the Electric Fund by $809,050.
1 Contract No. C27196740 with Blackhawk Painting Inc. https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/agendas-minutes/city-council-agendas-minutes/2026/august/c27196740-electric-substation- painting-contract.pdf
BACKGROUND
The City of Palo Alto Utilities (CPAU) operates nine electric distribution substations. Regular maintenance, specifically the professional painting of energized equipment and structural steel, is critical to prevent corrosion and ensure the long-term reliability of the City’s electric grid. This contract provides specialized painting services including surface preparation, lead abatement (if required), and application of high-performance industrial coatings.
CPAU’s substations contain critical infrastructure including transformers, circuit breakers, and lattice steel structures. These components are exposed to environmental stressors that cause oxidation and coating degradation over time.
Failure to maintain protective coatings can lead to:
Structural Integrity Loss: weakening of mechanical supports and lattice towers due to corrosion.
Increased Outage Risk: Advanced rust can compromise the seals and dielectric integrity of energized equipment.
Reduced Equipment Life: rust and corrosion can lead to early replacement of major equipment, causing increased operating costs and higher utility rates.
ANALYSIS
On April 8, 2026, the City issued an Invitation for Bids (IFB No.196740) for “Electric Substation Equipment & Mechanical Structures Painting Work”. Because this work occurs within "energized" utility environments, contractors are required to possess specialized safety training and specific California Contractor Licenses (Class C-33 Painting).
The project’s scope of work and services includes the following:
Pressure washing and mechanical cleaning of surfaces.
Containment of debris in accordance with BAAQMD (Bay Area Air Quality Management District) requirements.
Painting of Transformers, Switchgear Enclosures, and Lattice Structures. Work at various sites including the Colorado Power Station (COP) and several neighborhood distribution substations
All work performed under this contract shall adhere to the industry standards and regulatory frameworks to ensure the safety of personnel, the integrity of the electric grid, and protection of the environment.
The City received bids from eight (8) vendors prices ranging from $735,500 to $1,379,415. The low and responsible bidder was Blackhawk with quoted price of $735,500. Details of the bid and project timelines are listed in the table below.
Bid Details
Electric Substation Equipment & Mechanical
Structures Painting Work (IFB-196740)
Proposed Length of Project 18 Months
Number of Bid Packages downloaded by
Contractors 39
Total Days to Respond to Bid 27
Pre-Bid Meeting Yes
Number of Company Attendees at Pre-Bid
Meeting 5
Number of Bids Received: 8
Public Link to Solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/253002
Bid Price Range $735,500 - $1,379,415
Staff have reviewed the bid provided by Blackhawk and found it be responsive to the bid requirements and as providing the lowest cost to the City. Staff are recommending Council approve awarding a contract to Blackhawk for the amount of $735,500 and authorize the City Manager to approve change orders up to 10% of the originally submitted bid amount.
FISCAL/RESOURCE IMPACT
Funding for the maintenance work is available in the FY 2027 Electric Fund budget. Staff recommends transferring $809,050 from Electric Fund CIP EL-89044, Substation Facility Improvements to the Electric Fund Operations budget and increasing the Electric Operations Contract Services budget by $809,050. This will reduce available funding for EL-89044 from $1,591,000 to $781,950. EL-89044 originally had anticipated funding the repainting of this equipment. However, the minor nature of work is more appropriately funded as a maintenance project rather than a capital improvement project.
ENVIRONMENTAL REVIEW
This project is Categorically Exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15301(b) (Existing Facilities), as it involves the maintenance of existing utility facilities involving negligible or no expansion of use.
POLICY IMPLICATIONS
This recommendation is consistent with the City’s Utilities Strategic Plan to invest in infrastructure maintenance to ensure high levels of system reliability and safety.
Link:
Contract No. C27196740 with Blackhawk Painting
APPROVED BY:
Alan Kurotori, Director of Utilities
Staff: Terry Crowley, Utilities Chief Operating Officer