City Council Agenda Report
Meeting Date: April 18, 2023
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Administrative Analyst
Subject
Amendment No. 1 to Labor and Materials Contract with Petrelli Electric, Inc.
Recommendation
Approve and authorize the City Administrator to execute Amendment No. 1 to the Labor and Materials Contract with Petrelli Electric, Inc., in substantially the same form as submitted, to update union wages of the existing Contract.
Background
On March 15, 2022, City Council approved a Labor and Materials Contract with Petrelli Electric, Inc. (Petrelli Electric), with an effective date of July 18, 2022, to provide high voltage electric system service, maintenance, and utility support for a five-year term with an option to extend an additional five years (Contract). Petrelli Electric has nearly 40 years of experience in the electric utility industry, including many years of providing exceptional service to Vernon’s Electric and Fiber Optic System. Contracting with Petrelli Electric has resulted in an outstanding level of reliability and an impressive restoration timeline for Vernon Public Utilities (VPU), and its customers have benefitted from such service.
The current Contract with Petrelli Electric allows for labor rates set forth in Exhibit C (Contractor Fees for Services) to increase during the term of the Contract to the extent the Contractor’s costs increase pursuant to the International Brotherhood of Electrical Workers (IBEW) Local 47 Collective Bargaining Agreement (CBA). Accordingly, on March 24, 2023, staff received communication from Petrelli Electric requesting that union labor rate increases be approved by the City starting June 1, 2023. As per the IBEW Local 47 CBA dated June 1, 2022 through May 31, 2027, union labor wages will increase annually, effective June 1 of each CBA year. In accordance with Section 5.4.1 of the City’s Contract with Petrelli Electric, the Contractor requested to amend Exhibit C of said Contract to reflect the increase in labor rates of Petrelli Electric’s unionized workers.
IBEW Local 47 labor wages will increase by $705,116 or 13.9% (excluding overtime) as follows:
• Effective June 1, 2023 the average increase is 4.1% or $209,161 • Effective June 1, 2024 the average increase is 3.7% or $197,958 • Effective June 1, 2025 the average increase is 2.7% or $150,097 • Effective June 1, 2026 the average increase is 2.6% or $147,858 Approval of the proposed Amendment No. 1 to the Labor and Materials Contract with Petrelli Electric will allow VPU to budget future aggregate amounts of the annual Vernon Public Utilities’ Electric System and Fiber Optic Systems budgets. Staff is seeking approval of the proposed Amendment, as the current Contract with Petrelli Electric requires all rate changes to be approved by the City Council prior to becoming effective.
Amendment No. 1 has been reviewed and approved as to form by the City Attorney’s Office.
Fiscal Impact
The fiscal impact is estimated at $705,116 over the remaining four years of the Contract. Funds for the proposed Amendment will be included in the Vernon Public Utilities Enterprise Funds for the Fiscal Year 2023-24 budget and in subsequent years.
Attachments
1. Amendment No. 1 to Labor and Materials Contract with Petrelli Electric, Inc.