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HomeMy WebLinkAboutItem 10b - HVAC Preventative Maintenance Services Contract Extension DATE: February 18, 2025 TO: Honorable Mayor and City Council FROM: Paul Cranmer, Public Works Services Director By: Carlos Aguilar, General Services Superintendent SUBJECT: EXTENSION TO THE CONTRACT WITH SHELDON MECHANICAL CORPORATION FOR HVAC PREVENTATIVE MAINTENANCE AND REPAIR SERVICES AT VARIOUS CITY FACILITIES IN AN AMOUNT NOT TO EXCEED $313,798 CEQA: Not a Project Recommendation: Approve SUMMARY On March 19, 2024, the City Council approved a contract extension with Sheldon Mechanical Corporation for heating, ventilation, and air conditioning system (“HVAC”) preventative maintenance and extraordinary repair services at various City facilities, in the amount of $297,970. Sheldon Mechanical Corporation is reaching the end of their first contract extension and has submitted a written offer to extend it for an additional year. The extension offer reflects a 5.31%, or $15,828, Cost of Living Adjustment (“COLA”) to offset an increase in labor rates. This will be Sheldon Mechanical Corporation’s second contract extension; all other contract terms and conditions will remain in effect. Based on past performance, it is recommended that the City Council approve, authorize, and direct the City Manager to execute a one-year contract extension with Sheldon Mechanical Corporation for HVAC preventative maintenance and repair services at various City facilities, in an amount not to exceed $313,798. It is further recommended that the City Council delegate the authority to approve future extensions under this agreement to the City Manager, without having to return to the City Council for subsequent approval, provided that any changes to the financial terms stay within standard inflationary limits. BACKGROUND The Public Works Services Department (“PWSD”) is responsible for the day-to-day operation and maintenance of HVAC systems at City facilities. The City utilizes a contractor to perform a detailed preventative maintenance schedule and extraordinary system repairs. The monthly preventative maintenance tasks are outlined in the Extend HVAC Preventative Maintenance Services Contract February 18, 2025 Page 2 of 3 specifications of the contract, while extraordinary repairs are conducted on an as-needed basis when equipment failures occur. The preventive maintenance schedule is intended to minimize the occurrence of unscheduled extraordinary repairs, ensure that equipment functions properly, and prolong equipment lifecycles. The monthly HVAC preventative maintenance schedule includes services on the following types of equipment: • Cooling towers • Small HVAC package rooftop units under 10 tons • Large HVAC package rooftop units over 10 tons • Boilers and chillers • Dedicated computer server room air conditioners DISCUSSION Sheldon Mechanical Corporation is reaching the end of their contract term and has submitted a written offer to extend their contract for an additional year. The extension reflects a 5.31%, or $15,828, cost of living adjustment to offset increases in labor rates. Their proposed increase reflects a labor/foreman rate increase from $117 to $125 per hour and labor/journeyman rate increase from $101 to $109 per hour. The higher costs are a direct result of annual labor rate increases and significant cost increases in Personal Protective Equipment (“PPE”) and Occupational Safety and Health Administration (“OSHA”) regulations. Sheldon Mechanical Corporation has provided quality service to the City of Arcadia and continues to be responsive to requests from City staff. Therefore, it is recommended that the City Council execute a one-year extension to the contract with Sheldon Mechanical Corporation for HVAC preventative maintenance and repair services at various City facilities. This will be Sheldon Mechanical Corporation’s second contract extension. It is further recommended that the City Council delegate the authority to approve a third and final extension under this agreement to the City Manager, without having to return to the City Council for subsequent approval, provided that any changes to the financial terms stay within standard inflationary limits. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the environment. FISCAL IMPACT Sufficient funds are available in each Department’s Fiscal Year 2024-25 Operating and Maintenance budgets for facility maintenance. All extraordinary repair work is performed Extend HVAC Preventative Maintenance Services Contract February 18, 2025 Page 3 of 3 on a time and materials basis and Sheldon Mechanical Corporation will only be paid for work performed. The total contract cost will be set at a not-to-exceed amount of $313,798. RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and approve, authorize, and direct the City Manager to execute a one-year extension to the contract with Sheldon Mechanical Corporation for HVAC preventative maintenance and repair services at various City facilities in an amount not to exceed $313,798. It is further recommended that the City Council delegate the authority to approve future extensions under this agreement to the City Manager, without having to return to the City Council for subsequent approval, provided that any changes to the financial terms stay within standard inflationary limits. Attachment: Proposed Amendment No. 2 to the Contract AMENDMENT NO. 2 TO THE HVAC PREVENTATIVE MAINTENANCE AND SERVICE CONTRACT FOR VARIOUS CITY FACILITIES 2022/2023 BY AND BETWEEN THE CITY OF ARCADIA AND SHELDON MECHANICAL CORPORATION This Amendment No. 2 (“Amendment No. 2”) is hereby entered into this ______ day of ______________, 2025 by and between the City of Arcadia, a municipal corporation of the State of California, and Sheldon Mechanical Corporation, a California Corporation, with respect to that certain Contract between the parties dated March 22, 2023, and further amended by Amendment No. 1 dated April 30, 2024 (“Agreement”). The Parties agree as follows: 1. Section B of the Contract Term is hereby extended to include the period from March 22, 2025 through and including March 22, 2026. (“Extended Term”). 2. Section C of the Contract, during the Extended Term Contract Price shall not exceed Three Hundred Thirteen Thousand, Seven Hundred Ninety-Eight Dollars and No Cents ($313,798.00). 3. All terms and provisions of the Contract not amended by this Amendment No. 2 are hereby reaffirmed. In witness whereof the Parties have executed this Amendment No. 1 on the date set forth below. CITY OF ARCADIA SHELDON MECHANICAL CORPORATION By: By: Dominic Lazzaretto City Manager Title: Dated: Dated: By: ATTEST: Title: Dated: City Clerk APPROVED AS TO FORM CONCUR: Michael J. Maurer Paul Cranmer City Attorney Public Works Services Director