TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer DATE: January 8, 2025
SUBJECT: AWARD OF FOUR-YEAR MAINTENANCE SERVICES
AGREEMENT TO PREMIER PIPE, INC. IN A TOTAL
AMOUNT NOT TO EXCEED $906,107 FOR CITYWIDE
SEWER SYSTEM CLEANING AND MAINTENANCE
SERVICES
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
Well-Maintained Infrastructure
BACKGROUND
The City owns approximately 50 miles of underground sewer lines that collect sewage/wastewater from individual properties and convey it into the County of Los Angeles sewer trunk lines. Although these systems are primarily underground, they are one of the most significant infrastructure assets that the City is responsible for maintaining, and provide an essential service for residents. There are two primary types of costs associated with the sewer system; operation/maintenance and capital improvement. The current contract recommended for award is for the operation/maintenance of the City’s wastewater system.
Given the importance of ensuring the wastewater collection system is properly maintained and the specialized equipment that is needed to clean the sewer system, the City contracts for collection system cleaning and maintenance services. On December 12, 2018, the City Council approved an award of a four-year Maintenance Services Agreement with Premier Pipe, Inc. for Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
collection system cleaning and maintenance services, as they were the successful Respondent to a Request for Proposals (RFP) issued by the City. On December 14, 2022, a two-year extension to the original agreement was approved. Under this agreement, Premier Pipe, Inc. has provided regular maintenance cleaning and repairs to the City’s approximately 50 miles of underground sewer lines, and has also responded to after hours and urgent call-outs and repairs. These services are imperative in preventing sewage overflows into the street, homes, and businesses as well as ensuring that the system is properly cleaned and maintained and that potential issues or defects within the system are identified and addressed in a timely manner.
As the two-year extension to the original agreement expires on December 31, 2024, staff issued a Request for Proposals (RFP) for the services on November 4, 2024, on the City’s online procurement platform. On November 25, 2024, a total of two (2) proposals were received. After reviewing the proposals and assessing them based on qualifications, experience, familiarity with the scope of work, and cost, staff recommends the award of a four-year Maintenance Services Agreement to Premier Pipe, Inc. in a total amount not to exceed $906,107 for Citywide sewer cleaning and maintenance services.
As noted earlier, the annual maintenance costs for the sewer are separate from the capital improvement costs required for the system, which are generally done to improve areas of the system that are in poor condition and may be more prone to failure. These costs would include larger rehabilitations of the system, open trench repairs, sewer linings, and replacement of the actual pipes or sewer mains. In order to have a full understanding of the system and its maintenance and capital improvement needs, the City retained a consultant to complete a Wastewater System Condition Assessment in 2019.
The same consultant provided a cost update in 2024 for the capital projects.
In total, these larger-scale wastewater CIP’s will cost an estimated $17.1 million over the next ten years, in addition to the annual maintenance cost. A breakdown of these costs as well as more detailed information about the recommended improvements to the system from the 2019 Condition Assessment are included in part as Attachment 3. As such, the maintenance of the sewer system is critical to ensure the City is sufficiently investing in its infrastructure assets.
DISCUSSION
The annual collection system cleaning and maintenance program currently performed by Premier Pipe, Inc. includes cleaning and inspecting by closedcircuit television of the sewer main system; cleaning and inspecting 21 “trouble spots” twice per year; 60 hours per year of urgent cleaning services; and 60 hours per year of troubleshooting inspections deemed necessary by the City Engineer. A complete cleaning and inspection cycle of the sewer main is completed over the course of two years with half of the system cleaning completed each year. The proposed contract will allow for the completion of two full cycles. The new agreement also provides for cleaning and inspection of the 1,055 City-owned sewer manholes by the contractor.
A total of two (2) proposals were received in response to the City’s Request for Proposals (RFP). The two respondents were Downstream Services, Inc. and Premier Pipe, Inc. as shown below:
Firm Annual Cost*
Downstream Services, Inc. $568,309.20
Premier Pipe, Inc. $204,606.00
*City may adjust compensation for the Services based on the year to year Construction Cost Index (CCI) percentage change with a maximum increase of 5% per year.
After reviewing the proposals, staff recommends proceeding with an award of contract to Premier Pipe, Inc. Staff has found Premier Pipe, Inc.’s performance to be satisfactory for the duration of the existing contract, as they have been very responsive and professionally competent. Their familiarity with the City and the City’s sewer system will enable them to continue working without interruption once the new agreement begins. Premier Pipe also has relevant experience providing similar services to several other public agencies in Los Angeles County and the San Gabriel Valley, and are proposing to provide the services at a reasonable cost.
As the City has not issued a solicitation for sewer system cleaning and maintenance services in several years, the costs for these services will increase as costs have escalated substantially since 2018. In totality, the new contract will represent a 14% cost increase. However, after reviewing both proposals, staff believes Premier Pipe, Inc.’s cost proposal represents a fair price for the services given the competitive solicitation process, existing market prices, and accounting for several years of cost inflation. Therefore, staff recommends the City Council approve the award of a four-year Maintenance Services Agreement to Premier Pipe, Inc. through December 31, 2028, with one (1) two-year option to extend the contract term.
FISCAL IMPACT & PROCUREMENT REVIEW
The adopted FY 2024-25 budget includes $197,310 in account no. 101-44- 4150-0000 (Other Contract Services - Sewer). The vast majority of this budgeted amount is comprised of the annual sewer maintenance cleaning of the City, which is currently in progress for FY 24-25 and expected to be complete by December 31, 2024. Staff anticipates that sufficient funds will remain available for the remainder of the fiscal year for call-outs, urgent repairs and other services that will be provided for under the new agreement, and that no additional appropriation is necessary at this time. Per the contract, each fiscal year the contract price is adjusted by the percentage change in the Construction Cost Index (CCI), with the maximum annual increase not to exceed 5 percent. As such, the total cost of this contract award is $906,107 over the four-year contract duration. See below for cost breakdown:
Fiscal
Year
Contract
Cost Notes
FY
2024-
25 $24,230
Anticipated remaining cost for
cleaning/inspection of 21 “trouble spots”
and call-outs and other urgent repairs
from January 1, 2025, to June 30, 2025,
based on pricing of new agreement
effective January 1, 2025
FY
2025-
26 $204,606 Base cost from proposal
FY
2026-
27 $214,836 FY 25-26 cost plus 5 percent contractual
increase
FY
2027-
28 $225,578 FY 26-27 cost plus 5 percent contractual
increase
FY
2028-
29 $236,857
FY 27-28 cost plus 5 percent contractual
increase. Contract term will end December
31, 2028, but sewer cleaning (majority of
cost) for FY 2028-29 will be completed
prior to expiration
Total
Cost $906,107
Ultimately, the City Council has the authority to increase or decrease the contract amount during the annual budget process.
The Finance Director has reviewed this staff report for compliance with San Marino City Code §02.06.05.A.3.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends that the City Council approve a four-year Maintenance Services Agreement in the amount of $906,107 with Premier Pipe, Inc. If the Council concurs, an appropriate motion would be:
“I move to approve a four-year Maintenance Services Agreement in a total amount of $906,107 with Premier Pipe, Inc. for sewer system cleaning and maintenance and authorize the City Manager to execute the Agreement on behalf of the City.”
ATTACHMENTS
1. Draft Maintenance Services Agreement with Premier Pipe, Inc.
2. Proposal from Premier Pipe, Inc.
3. 2019 Wastewater System Condition Assessment with Updated 2024 Project .Cost Estimates