February 4, 2025
Public Works
DATE: February 4, 2025
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, PE, Director of Public Works
Mary Phelps, Water Resource Division Manager
Subject:
Resolution to Approve a Contract with Owen Equipment
Sales for the Outstanding Balance and Service Charges
FINANCIAL IMPACT: The proposed expenditure of $114,711.78 will be funded from the Fiscal Year 2024-25 Water Resource
Recovery Division Budget in the following account
strings:
40322931-400705-03C04 $16,068.52
40322631-400287 $6,212.66
40623431-400202 $92,430.60
PREVIOUS COUNCIL
ACTION:
September 21, 2021
April 19, 2022
STATEMENT OF THE
ISSUE:
Staff is approval for a new contract with Owen Equipment Sales as the previous contracts with the company
expired before full payment could be processed. A new
agreement is required to facilitate the completion of the outstanding payment.
RECOMMENDED ACTION:
ADOPT a resolution approving a new contract with Owen
Equipment Sales for the outstanding balance and service charges from the purchase of the two Vactor Trucks, and the outstanding invoices and service charges for the
Street Sweeper Lease, in an amount not to exceed
$114,711.78 - Public Works Department (Mary Phelps
510-621-1269/Daniel Chavarria 510-620-5478).
AGENDA
REPORT
February 4, 2025
DISCUSSION:
On September 21, 2021, the City Council awarded a contract to Owen Equipment Sales for the purchase of one (1) Vactor Model 2100i with Hydro-Excavation Package in the amount of $529,683.81 and one (1) Vactor Model 2100i without Hydro-Excavation Package in the amount of $525,223.68 for a total purchase price not to exceed $1,054,907.49 which was fully funded and budgeted in Fiscal Year (FY) 2021-2022 (Attachment 3).
The Vactor trucks were not delivered until December 2022 due to an approximate 15- month construction and delivery timeline. Upon delivery, the total purchase price for the two (2) Vactor trucks amounted to $1,070,976.01, which exceeded the approved contract amount of $1,054,907.49 by $16,068.52.
Upon receipt of the invoices, dated December 22, 2022, City staff reached out to Owen Equipment Sales to inquire about the cost increase, as no contingency was included in the contract. Staff requested that Owen Equipment Sales waive the price increase, citing a lack of prior notification. However, Owen Equipment Sales referenced the original agreement, which indicated that potential shipping delays, exacerbated by COVID-19, could result in price increases.
The Department experienced several staffing changes, including the retirement of key personnel, during an exceptionally busy work period in which the June 30, 2023, expiration date of the Original Contract passed without notice.
In addition to paying the outstanding balance from the purchase of the two (2) Vactor Trucks at $8,034.26 each for a total of $16,068.52, the City must settle the associated service charges in the amount of $6,212.66 (Table 1).
TABLE 1 – Vactor Trucks
Particulars Invoice No. Invoice Date Funded Amount Invoice Amount Balance (a) Vactor with
Hydro-Excavation
58559 02-16-2023 $ 525,201.18 $ 533,235.44 $ 8,034.26
(b) Vactor without
Hydro-Excavation
58561 02-16-2023 $ 529,661.31 $ 537,695.57 $ 8,034.26
(c) Service Charges 24020001 02-29-2024 None $ 6,212.66 $ 6,212.66
In a separate matter, the City Council, on April 19, 2022, awarded a contract to Owen Equipment Sales to lease one (1) Street Sweeper for a two (2) year lease agreement with one (1) year option to renew at a rate of $10,200 per month, plus tax and environmental fees fully funded and budgeted in FY 2021-2022. This was due to a street sweeper being out of service for more than two years.
The contract had the option to renew for one year at the same rate. However, due to an administrative staff shortage, the contract expired on February 28, 2024, without being
February 4, 2025
renewed. The City continued to use the sweeper through October 2024. Owen Equipment Sales allowed the City the use of the Street Sweeper with the expectation to be paid in full according to the terms of the previous lease agreement (Attachment 4).
Therefore, City staff is seeking approval to pay the outstanding lease balance of $79,698.34 and the associated service charges amount of $12,732.26 for total amount of $92,430.60 (Table 2).
TABLE 2 – Street Sweepers
Particulars Invoice No. Invoice Date Invoice Amount
Lease Balance 63482 05/03/2024 11,212.01
63739 05/24/2024 11,212.01
64014 06/21/2024 11,212.01
64279 07/19/2024 11,212.01
64616 08/16/2024 11,212.01
64910 09/13/2024 11,212.01
65101 10/04/2024 1,214.27
65191 10/11/2024 11,212.01
Total $ 79,698.34
Service Charges 23030001 03/31/2023 577.39
23040001 04/28/2023 577.39
23050001 05/31/2023 241.03
23060001 06/30/2023 409.21
23070001 07/31/2023 577.39
23080001 08/31/2023 409.21
23090001 09/29/2023 577.39
23100001 10/31/2023 745.57
23110001 11/30/2023 913.75
23120001 12/31/2023 557.90
24010001 01/31/2024 241.03
24030001 03/29/2024 829.19
24040001 04/30/2024 997.37
24050001 05/31/2024 746.60
24060001 06/28/2024 1,082.96
24070001 07/31/2024 1,251.14
24080001 08/30/2024 914.78
24090001 09/30/2024 1,082.96
Total $ 12,732.26
To ensure the payment of the outstanding balance amount of $16,068.52 and service charges amount of $6,212.66 from the purchase of the two (2) Vactor Trucks, and the outstanding invoices amount of $79,698.34 and service charges amount of $12,732.26 for the Street Sweeper Lease, staff is requesting City Council’s approval to authorize a
February 4, 2025
new contract with Owen Equipment Sales for an amount not to exceed $114,711.78 (Attachment 1 and 2).
In conclusion, the requested action will provide the necessary authorization to process the invoices for the purchase, lease agreement and service charges to ensure the City complies with all contractual obligations, allowing the purchase and lease agreement to be closed out and payments to be made.
TABLE 3 – Summary
Particulars Account String Amount
Vactor Trucks - Balance 40322931-400705-03C04 $16,068.52 Vactor Trucks - Service Charges 40322631-400287 $6,212.66 Street Sweeper - Lease Balance 40623431-400304 $79,698.34 Street Sweeper – Service Charges $12,732.26
GRAND TOTAL $114,711.78
ATTACHMENTS:
Attachment 1 – Resolution
Attachment 2 – New Contract
Attachment 3 – Vactor Trucks Contract #5768 (expired June 30, 2023) Attachment 4 – Street Sweeper Contract #6244 (expired February 28, 2024) Attachment 5 – Owen Equipment Invoice