Report to: General Committee Date: October 25, 2010
SUBJECT: 182-S-10 Contract Extension for Street Lighting Maintenance, Repair and Relamping Program
PREPARED BY: Alan Laver, Manager, Utilities and Contracts, ext. 3400
Patti Malone, Senior Buyer, ext 2239
RECOMMENDATION:
1) THAT the report entitled “182-S-10 Contract Extension for Street lighting Maintenance, Repair and Relamping Program” be received;
2) THAT the contract for 2011 Streetlight Maintenance, Repair and Relamping Program be extended to PowerStream for an additional one (1) year (January 1, 2011 to December 31, 2011) at the same 2008 itemized pricing in the estimated contractual amount of $1,005,230 inclusive of HST;
3) THAT the 2011 operating budget for Street Light Maintenance, Repair and Relamping be increased from $965,230 to $1,005,230 to take into account the year over year volume increase;
4) THAT, subject to Council approval of the Town’s 2011 Operating Budget, funds be provided from account #720-720-5497 Street Lighting Maintenance and Repair;
5) THAT the tender process be waived in accordance with Purchasing By-Law 2004-341 Part II, Section 7(1) C which states ”when the extension of an existing contract would prove more cost effective or beneficial”;
6) THAT the CAO be authorized to renew the contract for an additional three (3) years exercised at one year intervals, subject to performance and based on yearly approval of the Operating budget;
7) THAT staff be authorized and directed to do all things necessary to give effect to this resolution.
PURPOSE:
The purpose of the report is to obtain Council approval to extend the contract for street light repairs and relamping program for an additional one (1) year at the same 2008 itemized pricing. This report also seeks to provide the CAO the authorization to extend for an additional three (3) years subject to yearly approval of the operating budget.
BACKGROUND:
The Town’s street lighting network (approximately 23,000 lights) has been owned and operated by the Town since it was transferred from Ontario Hydro in 1987.
The Town has historically engaged Markham Hydro then PowerStream to provide streetlight related maintenance services due to their expertise and background with the electrical systems. This engagement is one of the three components of a shared services agreement between the Town and PowerStream. The other two services are water and hydro cashier services and water meter reading and billing.
The services provided by PowerStream include emergency repairs to damaged poles and fixtures, replacement of burned out bulbs, ballasts, light sensors, fixtures (based on residents’ complaints to the Town’s Contact Centre and outages reported by the Town’s Operation Department’s twice yearly night patrol), underground and overhead supply line repairs (burn outs/faults) and locating services for underground streetlight infrastructure.
The service also includes a yearly relamping and fixture cleaning program where bulbs are replaced and fixtures cleaned on a 5 year rotation (approx. 1/5th of Town’s lighted areas per year) for preventive maintenance.
PowerStream invoices their costs monthly based on the actual time and materials used to make the requested repairs to the system.
Separate to the maintenance contract, the Asset Management Department looks after and
co-ordinates street
lighting infill requests from the public and a pole replacement program as part
of the Capital Budget. The
The existing contract between PowerStream and their subcontractor was to expire June 30th, 2011. At that point, the subcontract portion of this contract would have needed to be retendered by PowerStream on behalf of the Town.
The existing unit prices with PowerStream’s subcontractor have been maintained for the 3 year contractual term (July 1, 2008 – June 30, 2011). Through negotiations with the Town and PowerStream, the subcontractor has agreed to extend the 2008 pricing for a further additional six month period (July 1, 2011 – Dec 31, 2011) and will waive their request for a 2% increase as requested through negotiations. This current contract utilizes 2008 prices and will be in effect until December 31, 2011.
In 2010, Town staff have been working with PowerStream and their subcontractor to closely monitor expenses and to have a better understanding of maintenance trending for the year.
Attachment ‘A’ outlines the Town’s comparison of maintenance works/costs on a yearly basis and has been updated to reflect projections for the end of 2010.
In 2007, the Town did an overall review of the extension of services using PowerStream for Streetlight Maintenance. It was determined that the Town would continue to use PowerStream on an ongoing basis. In early 2009, the Asset Management Department was also asked to do a preliminary review of costs should the Town assume contract administration and locating services for street lighting which are now provided by PowerStream. A preliminary estimate to take over these services would include $150,000 per year for additional staffing expenses and $350,000 per year for streetlight locating services. Physical locates in the field are required prior to any excavation to ensure safety and prevent damage. PowerStream now charges the Town a 20% administration markup on contracted services to cover their expenses, which amount to approximately $200,000 per year. There would be estimated increase of $300,000 to the Town to take over these services.
In 2010, the Town
have had no issue with the performance of the streetlight maintenance contract and staff is satisfied with
the delivery of the service by PowerStream.
The expenditure process currently in place with the Asset Management and Finance Departments’ and PowerStream has allowed the Town to better track and control, where possible, maintenance costs in the future. This process will continue in 2011 and onward.
In Summary for 2011 the Town will ask PowerStream to:
a) Continue to provide monthly statements of preliminary maintenance works to the Town by the 15th day of the following month. This allows more timely review of quantities of works completed and budgeting.
b) Address only night patrol items generated from the Town’s twice yearly patrols and general repair requests initiated from the Town’s Contact Centre.
c) Where possible, have deteriorating poles addressed through the Town’s Life Cycle Capital Program.
d) Continue to contact the Town to review options prior to any major underground repairs taking place.
e) Extend the existing subcontract from June 2011 to the end of the year 2011 at the same unit prices.
Town staff will monitor the progress of this contract in relation to the approved budgets to ensure budgetary goals are met and if necessary, deal with any additional amounts through the Town’s expenditure control policy.
Due to the repetitive nature of this award
to PowerStream, Staff also recommend that the CAO be authorized to extend this
contract on a yearly basis for an additional three years (2012, 2013, and 2014)
based on the satisfaction of the contract performance and the budgets approved
for these years.
FINANCIAL CONSIDERATIONS AND TEMPLATE:
The award is subject to approval of 2011 operating budget. Funding for street lighting Maintenance/Relamping will be contained in the 2011 Asset Management Department’s Operating Budget. The budget estimate is based on the 2010 budget of $965,230 plus an allowance of $40,000 for additional lighting added during 2011 due to growth. The total is $1,005,230.
HUMAN RESOURCES CONSIDERATIONS
Not Applicable
ALIGNMENT WITH STRATEGIC PRIORITIES:
Not Applicable
BUSINESS UNITS CONSULTED AND AFFECTED:
The Finance
Department has reviewed the funding and budget requirements.
RECOMMENDED
BY: ________________________ ________________________
Steve Andrews P.Eng. Brenda Librecz
Director, Asset Management Commissioner, Community and Fire Services
ATTACHMENTS:
Attachment ‘A’- Comparison Charts
O:\Commission Share\Operations and Asset Management\Reports\2010\Asset Mgmt\182-S-10 Contract Extension for Streetlighting Maintenance.docx