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20200312 City Council Agenda Packet Agenda City of Vernon Special City Council Meeting Thursday, March 12, 2020, 09:00 AM City Hall, Council Chamber 4305 Santa Fe Avenue Vernon, California Melissa Ybarra, Mayor Leticia Lopez, Mayor Pro Tem William Davis, Council Member Carol Menke, Council Member Diana Gonzales, Council Member CALL TO ORDER FLAG SALUTE ROLL CALL CHANGES TO THE AGENDA PUBLIC COMMENT At this time the public is encouraged to address the City Council on any matter that is within the subject matter jurisdiction of the City Council. The public will also be given a chance to comment on matters which are on the posted agenda during City Council deliberation on those specific matters. CONSENT CALENDAR All matters listed on the Consent Calendar are to be approved with one motion. Items may be removed from the Consent Calendar by any member of the Council. Those items removed will be considered immediately after the Consent Calendar. 1. Public Utilities Purchase Contract with Rolls Wood Group for the Inspection and Evaluation of the H. Gonzales 571K Gas Turbine Unit 1 Recommendation: A. Find that the proposed action is exempt from the California Environmental Quality Act (CEQA) review, because purchasing vehicles is an administrative activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines §15061(b)(3), the general rule that CEQA only applies to projects that may have a significant effect on the environment; and Page 2 of 2 Special City Council Meeting Agenda March 12, 2020 B. Approve and authorize the City Administrator to execute a purchase contract in the amount of $65,100 with Rolls Wood Group to disassemble, clean, and inspect the damage to H. Gonzales 571K Gas Turbine Unit 1. 1. Rolls Wood Group Quote and Terms CLOSED SESSION 2. PUBLIC EMPLOYMENT DISCIPLINE/DISMISSAL/RELEASE Pursuant to Government Code Section 54957 One Matter 3. PUBLIC EMPLOYEE APPOINTMENT/PUBLIC EMPLOYMENT Pursuant to Government Code Section 54957 Title: Interim City Attorney ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Vernon City Hall, located at 4305 Santa Fe Avenue, Vernon, California, and on the City’s website, not less than 24 hours prior to the meeting set forth on this agenda. Dated this 11th day of March, 2020. By: __________________________________ Sandra Dolson, Administrative Secretary City Council Agenda Item Report Agenda Item No. COV-108-2020 Submitted by: Jessica Balandran Submitting Department: Public Utilities Meeting Date: March 12, 2020 SUBJECT Purchase Contract with Rolls Wood Group for the Inspection and Evaluation of the H. Gonzales 571K Gas Turbine Unit 1 Recommendation: A. Find that the proposed action is exempt from the California Environmental Quality Act (CEQA) review, because purchasing vehicles is an administrative activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines §15061(b)(3), the general rule that CEQA only applies to projects that may have a significant effect on the environment; and B. Approve and authorize the City Administrator to execute a purchase contract in the amount of $65,100 with Rolls Wood Group to disassemble, clean, and inspect the damage to H. Gonzales 571K Gas Turbine Unit 1. Background: Recently, the H. Gonzales 571K Gas Turbine Unit 1 (Unit) suffered a compressor failure and must be examined by the sole authorized vendor, Rolls Wood Group (RWG). This Unit was originally placed into service in the 1980s and very few are still in service to date. Vernon Public Utilities (VPU) has two H. Gonzales Units that provide peaking energy into the California Independent System Operator (CAISO) grid. The Units also provide local capacity to VPU which would otherwise need to be purchased in the market at a costly rate. Due to Unit 1 being inoperable, the City must spend more money to purchase this capacity from the market, and must continue to do so until the Unit can be placed back into service. Each of the Units are very unique, requiring specialized inspection and repair. RWG has provided VPU a quote with a scope of work to disassemble, clean, and inspect Unit 1, which includes a limited warranty and round trip freight fees. The total extent of the damage to the Unit cannot be determined in the field resulting in the need to transport it to and from Houston, Texas, where RWG is located. Upon completion of the thorough inspection and evaluation, RWG will provide VPU with an additional quote for any and all necessary repair work, which will be brought to City Council for review and approval in the near future. With a previous parts purchase from RWG in July 2019, totaling $41,506.97, coupled with the recommended expenditure of $65,100, the total amount of purchases from this vendor within a 12 month period would exceed $100,000. It is, therefore, required that City Council approve the proposed purchase contract, pursuant to Vernon Municipal Code Section 2.17.02. Staff recommends approval of this purchase contract due to the significant financial need to place the Unit back into service at the earliest date possible. The terms in the attached quote have been reviewed and approved by the City Attorney's Office. Fiscal Impact: The fiscal impact to disassemble, clean, and inspect, including roundtrip freight, will be $65,100. This includes the following breakout charges: •Flat Rate DCI Price $56,100 (disassemble, clean, and inspect) •Freight (flat rate plus insurance Vernon, CA to Houston, TX) $4,500 •Freight (flat rate plus insurance Houston TX, to Vernon, CA) $4,500 Upon inspection and evaluation, an additional scope of work will be provided by RWG to include the estimated hourly rate for anticipated repairs 570/571 Hourly Rate $235. Once the work and associated costs for the repair of Unit 1 are identified, staff will return to City Council for authorization to issue a purchase contract to complete its restoration. Funds are available in the Public Utilities Fiscal Year 2019-2020 budget. Attachments: 1. Rolls Wood Group Quote and Terms A Siemens and John Wood Group Company 6223 W. Sam Houston Pkwy N. Houston, TX 77041-5145 Tel: (713) 538-9740 Fax: (713) 538-9788 cvazquez@rwgroup.com Website: www.rwgroup.com 02/20/2020 City of Vernon Public Utilities 4305 S. Santa Fe Avenue Vernon, CA 90058 Attn: Mr. Don Quiroz & Mr. Jorrie Estrada Subject: Model 571K Repair Inspection Quote, RWG2112 Dear Gentlemen, RWG is pleased to provide the following pricing for the Disassembly, Cleaning & Inspection (DCI) for repair of one of the City of Vernon’s Model 571K Gas Turbines which has suffered a compressor failure. Background Based upon borescope photos and information reported to RWG, it appears that the subject unit suffered a 7th stage compressor blade failure with secondary downstream damage. The total extent of the damage cannot be determined in the field resulting in the need for a shop visit. Workscope The proposed workscope is to determine the extent of the damage, possible source and requirement to return the unit to service. RWG proposes a DCI workscope as follows: • Collect gas turbine from City of Vernon site and move to RWG’s Houston, Texas Facility. • Receive, inventory and photograph the unit upon induction into the RWG facility. • Separate the compressor from the hot section (Combustion, GP and PT sections) • Disassemble compressor sufficiently to remove the compressor rotor. • Complete a visual inspection of the compressor rotor and cases to assess extent of damage. • Review the Combustion Liner and GP turbine for damage. Disassemble as required should damage be noted. • Review the PT section for damage. Disassemble as required should damage be noted. • Based upon initial visual inspections above, proceed with cleaning of components as needed. Present any additional workscope changes. • Complete repair inspection determines disposition of discrepant parts. • Based upon inspection results, assemble disassembly report and cost estimate for presentation to City of Vernon for review and approval. • Hold pending release by City of Vernon. - Flat Rate DCI Price (Includes all above) $56,100.00 USD - Freight (Flat Rate Vernon, CA to Houston, TX) $ 4,500.00 USD - Freight (Flat Rate Houston, TX to Vernon, CA) $ 4,500.00 USD - 570/571 Hourly Rate, Other $ 235.00 USD A Siemens and John Wood Group Company General Information/Terms • Model 570/571 Gas Turbine testing is no longer offered by RWG, all post repair operation will take place upon unit install at customer site. • Seal break-In steps, if required, will be provided to the customer. An RWG Field Service Representative can be made available for initial commissioning at customer request. Please provide your request for commissioning assistance prior to final pricing. • The Model 570/571 OEM no longer supports R&O activities and therefore RWG makes no representation as to the extent of availability of replacement parts for the Model 570/571 Gas Turbine. All efforts will be made to secure/obtain the necessary replacement parts to return unit to operating condition. Due to the possible unavailability of replacement parts for the 570/571, RWG assumes no liability/responsibility for the customer’s inability to operate the unit should it be determined the unit cannot be returned to service. Warranty RWG offers a limited workmanship warranty of 6 months from date of shipment of unit, limited to areas of the unit directly addressed/accessed by RWG for the purpose of this repair. RWG offers no warranty on replacement parts since the OEM no longer produces replacement parts for the Model 570/571 gas turbine. Turn-Time Estimated turn-time for the above workscope is 30-45 days from date of induction at RWG’s Houston, Texas facility. Payment Terms Net 30 days from date of invoice pending credit approval for repair value, unless otherwise negotiated. RWG thanks the City of Vernon for the opportunity to quote its Gas Turbine Services. Please feel free to contact me with any questions or concerns you may have. 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