City Council
Report
City Council Meeting: June 9, 2026
Agenda Item: 4.K
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To: Mayor and City Council
From: Christopher Dishlip, Director of Public Works, Facilities Maintenance Division Subject: Approval of the First Modification to Agreement #11584 with ACCO Engineering Systems for Mechanical and Heating, Ventilation, and Air Conditioning Maintenance and Repair Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of categorical exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to execute a first modification to agreement #11584 in the amount of $3,000,000 with ACCO Engineered Systems, Inc. (ACCO) for mechanical and heating, ventilation, and air conditioning maintenance and repair services for the Public Works Department. This will result in an amended agreement with a new total amount not to exceed $9,500,000, with future year funding contingent on Council budget approval.
Summary
The City of Santa Monica’s (City) Facilities Maintenance Division contracts for mechanical and heating, ventilation, and air conditioning (HVAC) services to support the operation of City facilities, including City Hall campus, libraries, park buildings, the airport and fire stations. These services supplement in-house staff and focus on large repairs and maintenance of complex HVAC systems. Since the contract was awarded, demand for HVAC services has increased due to aging infrastructure and deferred maintenance needs resulting from a reduced capital program funding. As a result, existing contract authority is being expended more rapidly than anticipated. 2 of 5
Staff recommends increasing agreement #11584 with ACCO Engineered Systems, Inc. (ACCO) by $3,000,000, for a revised total amount not to exceed $9,500,000, to ensure continuity of services and support the safe and efficient operation of City facilities through the current contract term.
Discussion
On May 28, 2024, City Council awarded Bid No. SP2694 to ACCO and authorized execution of agreement #11584 for an initial term of three years, in an amount of $5,000,000, with an additional one year option to renew in the amount of $1,500,000 for a total amount not to exceed $6,500,000 over a four-year term. Since that time, demand for HVAC services has increased due to aging infrastructure, deferred maintenance, and unplanned emergency repairs as a direct result of capital funding shortfalls. Critical equipment—including chillers, cooling towers, boilers, and pumps—is reaching or exceeding its useful life and now requires substantial repair or replacement.
In addition, most City facilities currently use HVAC equipment that relies on refrigerant R-410A, which the U.S. Environmental Protection Agency (EPA) banned for use in new equipment as of January 1, 2025. As a result, major repairs or full system replacements can no longer use like-kind equipment. Instead, they must transition to A2L (mildly flammable) refrigerants such as R-454B or R-32, which in turn triggers costly building safety code upgrades. Because the original bid was awarded before the refrigerant ban, the cost of upgrading these systems was not included in the City’s original solicitation.
As a result, the existing contract authority is no longer sufficient to support current needs through the contract term ending August 12, 2027.
The Facilities Maintenance Division employs four in-house staff to perform routine HVAC maintenance, including tasks such as filter and belt replacement and control adjustments. However, due to the size and complexity of HVAC systems at City facilities, specialized and large-scale work must be performed by contractors. ACCO has provided maintenance and repair services at major City facilities, including the City Hall Campus, Public Safety Facility, libraries, park buildings, airport buildings, and fire 3 of 5
stations. Contracted services are used for complex systems, major repair and replacement projects, and emergency work necessary to prevent service disruptions.
Increasing contract authority would allow staff to address deferred maintenance in a planned manner, reduce the risk of system failures and emergency repairs, and improve reliability and efficiency across City facilities. As these larger repairs are completed, inhouse staff would be able to focus more proactively in maintaining city systems rather than reactively addressing imminent failures.
Staff recommends increasing agreement #11584 with ACCO by $3,000,000, for a revised total amount not to exceed $9,500,000, with no change to the contract term.
ACCO would continue to provide services in accordance with the existing scope of work, and all other terms and conditions would remain unchanged.
Environmental Review
The proposed action is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines.
Section 15301 provides a Class 1 exemption for projects consisting of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use.
The proposed contract amendment will support ongoing mechanical and HVAC maintenance and repair services at existing City facilities. These activities will not result in modifications that expand or materially change the use of the facilities. Instead, the work will maintain and repair existing systems to ensure their continued safe and efficient operation. Therefore, the proposed action is categorically exempt under Section 15301 of the CEQA Guidelines.
Past Council Actions
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Meeting Date Description
05/28/2024
(Attachment A)
Award a Contract with ACCO Engineered Systems, Inc. for the Airport Mechanical Equipment Replacement Project, and a Contract With Same Contractor, ACCO Engineered Systems, Inc., for Citywide On-Call Mechanical Equipment Services.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from various City funds to increase agreement #11584 for deferred maintenance and major HVAC repairs and replacements at City facilities through the end of the contract term. The cost will be charged to the appropriate department or applicable CIP account, as needed.
Contract Modification Request
Current
Authorized
Amount
FY 2026-27
Request
Amount
Future Years
Amount Dept/CIP Account #
Total
Revised
Contract
Amount
$6,500,000 $600,000 $2,400,000 Various $9,500,000
Funds will be included in the proposed Operating Budget for FY 2026-27 and the proposed Biennial Capital Improvement Program Budget for FY 2026-28. Future year funding is contingent on Council budget approval.
Prepared By: Shidan Adlparvar, Facilities Services Administrator Approved Forwarded to Council
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Attachments:
A. May 28, 2024 Staff Report (web link)
B. Levine Act Disclosure Form 2025_3-27-25 _EB sig
C. ACCO Oaks 4-28-26
D. _EXECUTED CSA_ACCO_CT11584