Agenda No. 11.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | January 11, 2022 |
| Department: | Public Works |
| Subject: | Resolution No. 22-R-06 - Consideration and/or action approving a Resolution by the City Council of the City of Schertz, Texas authorizing expenditures for the purchase of steel poles in advance of the FM 1518 Widening Project. (C. Kelm/S. Williams) |
BACKGROUND
TxDot has a 2022 project planned to widen FM 1518. As part of this widening project, utility providers are required to relocate utilities within the Right-of-Way. With this widening, CPS Energy is required to relocate existing utility poles that provide service to properties along FM 1518.
The City requires the use of steel poles for overhead utilities. CPS Energy is willing to reimburse the City for the cost of using wood poles in this project but has declined to pay the full cost of the steel poles. To accomplish this, CPS Energy has agreed to reimburse Schertz the cost difference between the wood poles and steel poles or $748,070.00.
To ensure fiscal responsibility, the City advertised a request for bid for steel transmission poles and received five responses. The costliest response was $1,856,090.25 and the lowest was $1,253,511.00. Across those five responses there were varying delivery times from 8-22 weeks.
Three options have been formulated for council consideration to address the requirement of steel poles.
Option 1: This option uses CPS Energy costs for steel poles for 100% of the project and includes the credit CPS Energy agreed to give to Schertz.
Cost of project for Steel Poles: $1,995,803.00
Cost of project for Wood Poles: $748,.070.00
Final cost to Schertz: $1,247,733.00
Option 2: This option uses pricing from KBS Electrical, a vendor who responded to Schertz' RFB, for steel poles for 100% of the project with CPS Energy providing a credit to Schertz for the difference of cost between the wood poles and steel poles.
Cost of project for steel poles: $1,253,511.00
Cost of project for wood poles: $748,070.00
Final cost to Schertz: $505,411.00
Under this recommended option, the City would award to KBS Electrical for the procurement of the poles with reimbursement from CPS for Wood Pole portion to follow.
Option 3: This option uses CPS Energy costs to use wood poles on 100% of the project. CPS Energy will fund this option and as a result, there is no cost to Schertz.
Cost of project for wood poles: $748,070.00
Final cost to Schertz: $0
The City requires the use of steel poles for overhead utilities. CPS Energy is willing to reimburse the City for the cost of using wood poles in this project but has declined to pay the full cost of the steel poles. To accomplish this, CPS Energy has agreed to reimburse Schertz the cost difference between the wood poles and steel poles or $748,070.00.
To ensure fiscal responsibility, the City advertised a request for bid for steel transmission poles and received five responses. The costliest response was $1,856,090.25 and the lowest was $1,253,511.00. Across those five responses there were varying delivery times from 8-22 weeks.
Three options have been formulated for council consideration to address the requirement of steel poles.
Option 1: This option uses CPS Energy costs for steel poles for 100% of the project and includes the credit CPS Energy agreed to give to Schertz.
Cost of project for Steel Poles: $1,995,803.00
Cost of project for Wood Poles: $748,.070.00
Final cost to Schertz: $1,247,733.00
Option 2: This option uses pricing from KBS Electrical, a vendor who responded to Schertz' RFB, for steel poles for 100% of the project with CPS Energy providing a credit to Schertz for the difference of cost between the wood poles and steel poles.
Cost of project for steel poles: $1,253,511.00
Cost of project for wood poles: $748,070.00
Final cost to Schertz: $505,411.00
Under this recommended option, the City would award to KBS Electrical for the procurement of the poles with reimbursement from CPS for Wood Pole portion to follow.
Option 3: This option uses CPS Energy costs to use wood poles on 100% of the project. CPS Energy will fund this option and as a result, there is no cost to Schertz.
Cost of project for wood poles: $748,070.00
Final cost to Schertz: $0
GOAL
The goal is to utilize steel poles and be consistent with the Schertz UDC while providing resilient, reliable, and cost-effective services to our residents and businesses.
COMMUNITY BENEFIT
Steel poles increase the resiliency of the electric service to Schertz residents and businesses by eliminating maintenance risks, such as wood rot, damage from insects and animals, water related damage (ice and wind), vehicular damage, etc. In addition, steel poles have a longer life-span than wood poles, which is more than double that of a wood pole. The utilization of steel poles bolsters the aesthetics by promoting the consistency of pole type, not an uncommon practice for Cities.
SUMMARY OF RECOMMENDED ACTION
Staff recommends approval of Resolution 22-R-06 to purchase steel poles for the FM 1518 widening project through Option #2.
FISCAL IMPACT
The fiscal impact is $505,411.00 or the difference remaining from the purchase of the steel poles from KBS Electric by the City of Schertz and the reimbursement of the wooden pole cost from CPS. This amount will be funded from City reserves. The following item on the agenda is an emergency budget adjustment ordinance to authorizing funding for this project. If council is not inclined to approve that item, they should not approve this item.
RECOMMENDATION
Staff recommends approval of Resolution 22-R-06 to purchase steel poles for the FM 1518 widening project.