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HomeMy WebLinkAboutItem 11c - Authorizing Budget Appropriation for the repair of the Orange Grove Water Facility Emergency GeneratorPurchase Order Change Order with Valley Power Systems, Inc. January 21, 2020 Page 1 of 3 DATE: January 21, 2020 TO: Honorable Mayor and City Council FROM: Tom Tait, Public Works Services Director By: Carmen Masud, Senior Management Analyst SUBJECT: RESOLUTION NO. 7290 AMENDING THE FISCAL YEAR 2019-20 CAPITAL IMPROVEMENT PROGRAM BUDGET AUTHORIZING A SUPPLEMENTAL BUDGET APPROPRIATION FOR THE ORANGE GROVE WATER FACILITY EMERGENCY GENERATOR PROJECT IN THE AMOUNT OF $113,419.31, OFFSET BY A REDUCTION IN THE WATER RESERVE FUND, AND APPROVING A CHANGE ORDER TO THE PURCHASE ORDER WITH VALLEY POWER SYSTEMS, INC. Recommendation: Adopt and Approve SUMMARY During a Southern California Edison (“SCE”) planned power outage at the Orange Grove Water Facility, the emergency generator’s engine sustained major damage. To repair the generator, the entire engine had to be rebuilt. On November 5, 2019, the City Council approved a Purchase Order with Valley Power Systems, Inc. for the repair of the Orange Grove Water Facility Emergency Generator in the amount of $216,733.70. During the engine teardown, the technician found that that the engine block cannot be rebuilt. The extreme heat caused “bluing” of the metal, which changed the metallurgy and made the metal brittle. The damage cannot be reversed, nor can the engine block be corrected. A replacement engine will have to be purchased and installed in the generator. While this is a significant and unplanned cost, it is nowhere near the cost of a completely new generator and the work will result in an effectively new generator. It is recommended that the City Council adopt Resolution No. 7290 amending the Fiscal Year 2019-20 Capital Improvement Program Budget Appropriation for the Orange Grove Water Facility Emergency Generator Project in the amount of $113,419.31, offset by reduction in the Water Reserve Fund, and approving the change order to the Purchase Order with Valley Power Systems, Inc. Purchase Order Change Order with Valley Power Systems, Inc. January 21, 2020 Page 2 of 3 BACKGROUND The Orange Grove Water Facility is a vital component in the City’s water distribution system. In May 2006, as part of the renovation of the Orange Grove Booster Station, a new Kohler 750kW emergency generator was installed. The Orange Grove Booster Station pumps water from the Orange Grove Water Facility to reservoirs located in the north end of the City. In the event of a power outage or natural disaster, the emergency generator at the Orange Grove Water Facility will automatically start and supply power to the booster station. During a recent SCE planned power outage at the Orange Grove Water Facility, the emergency generator automatically started up in response to the power outage. Upon startup, the generator engine produced loud, abnormal noises and excessive smoke began emitting from the exhaust system. As such, Public Works Services Department (“PWSD”) personnel shut down the generator. A preliminary inspection of the generator by PWSD mechanics revealed that the engine sustained major damage when an unidentified leak in the generator engine’s cooling system allowed water to mix with the engine oil system and greatly reduce the oil lubricating capability. The thinned engine oil resulted in the failure of numerous vital engine components. Without access to an emergency generator at this key facility, peak water system and/or fire demands would possibly not be met, should a power outage or natural disaster occur. In addition, the overall water system is further compromised by several wells being down due to contamination, ongoing repairs, and low water levels, leaving the City with very limited redundancies. DISCUSSION On November 5, 2019, the City Council approved a Purchase Order with Valley Power Systems, Inc. for the repair of the Orange Grove Water Facility Emergency Generator in the amount of $216,733.70. Valley Power Systems, Inc. completed the engine teardown and analysis and determined that the engine cannot be rebuilt. The engine block experienced extreme heat buildup in the block saddles and crank main caps, which are the backbone of the engine where the crankshaft bolts to the engine. The extreme heat caused “bluing” of the metal, which changed the metallurgy and made the metal brittle. The bluing was not identifiable until the engine was broken down, cleaned up, and examined. The bluing cannot be reversed, nor can the engine block be machined to correct it. Furthermore, the engine manufacturer will not warranty the engine rebuild if repair attempts are made because the likelihood of future failure is far too high. The only option is to purchase a replacement engine and have it installed in the generator. Peripheral engine parts like the intake & exhaust manifolds will be reused to keep costs down. The additional cost of a replacement engine is $113,419.31. The original Purchase Order, which includes the rental of a temporary backup generator, was $216,733.70. A Purchase Order Change Order with Valley Power Systems, Inc. January 21, 2020 Page 3 of 3 change to the original purchase order would be an increase of $113,419.31. Purchasing a brand new generator to replace the damaged generator would cost approximately $600,000. Replacing the engine with a new engine and reusing parts that are still functional will save the City approximately $270,000. ENVIRONMENTAL ANALYSIS Rebuilding the Orange Grove Well generator motor does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. In addition, this work would be considered repair to an existing facility, which is also exempt from CEQA requirements. Thus, this matter is exempt under CEQA. FISCAL IMPACT The total cost to repair the Orange Grove Water Facility Generator is $330,153.01. An appropriation of $216,733.70 from the Water Reserve Fund was requested and approved on November 5, 2019. An appropriation of $113,419.31 is being requested from the Water Reserve Fund for the change order to the current purchase order with Valley Power Systems, Inc. The Water Reserve Fund exists to address emergencies such as this; sufficient funds are available to cover this request. RECOMMENDATION It is recommended that the City Council adopt Resolution No. 7290 amending the Fiscal Year 2019-20 Capital Improvement Program Budget Appropriation for the Orange Grove Water Facility Emergency Generator Project in the amount of $113,419.31, offset by reduction in the Water Reserve Fund, and approving the change order to the Purchase Order with Valley Power Systems, Inc. Attachment: Resolution No. 7290