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Resolution No. 80321 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 RESOLUTION NO. 8032 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN INTERIM LETTER AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND SCOTT CO. INDUSTRIAL CONTRACTORS, A SUBSIDIARY OF THE SCOTT COMPANIES, INC. WHEREAS, the City of Vernon ("City") is proceeding at this time to develop a 134 MW Combined Cycle Power Plant officially named the Malburg Generating Station (the "Malburg Project") for the purpose of installing additional generating capacity that will yield an efficient, cost-effective, and reliable source of electric generation to the City of Vernon; and WHEREAS, City staff has determined that it needs the services of a consultant to provide consulting services respecting a detailed engineering, procurement and construction ("EPC") contract for the Malburg Project; and WHEREAS, in order for the City to provide the California Energy Commission ("CEC") with information that it requires under its six-month expedited license process and complete the design requirements for the EPC contract, the City staff needs to proceed with the development and completion of the engineering design and drawings for the Malburg Project; and WHEREAS, Scott Co. Industrial Contractors, a subsidiary of The Scott Companies, Inc. ("Scott"), a firm specializing in Industrial Construction Services, is willing to provide such services to the City while the EPC is still being negotiated; and WHEREAS, City staff has determined that Scott possesses the technical knowledge and expertise to provide the necessary 1 engineering design and drawings to support the CEC permitting process 2 and complete the required attachments for the EPC contract for the 3 Malburg Project; and 4 WHEREAS, during the negotiations for the EPC contract, the 5 City and Scott desire to enter into an interim letter agreement setting 6 forth the terms and conditions of providing the engineering design and 7 drawing services to support the CEC permitting process and EPC contract 8 for an amount not to exceed $150,000.00; and 9 WHEREAS, in the event an EPC contract is finalized with 10 Scott, any amount paid pursuant to this interim letter agreement shall 11 be treated as a credit to the City to be applied to the City's first 12 payment under the EPC contract; and 13 WHEREAS, on July 23, 2002, the Finance Committee recommended 14 that the City Council approve the recommendation of Bruce V. 15 Malkenhorst, Director of Finance, dated July 18, 2002, that an interim 16 Letter Agreement be approved and executed with Scott; and 17 WHEREAS, the City Council of the City of Vernon has 18 determined that, pursuant to the provisions of subsection (a) of 19 Section 2.27 of the Vernon City Code, it is in the public interest and 20 necessity to enter into an interim Letter Agreement with Scott setting 21 forth the terms and conditions of the services to be performed for the 22 Malburg project to enhance services provided to the Vernon community. 23 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 24 CITY OF VERNON AS FOLLOWS: 25 SECTION 1: The City Council of the City of Vernon hereby 26 finds and determines that the recitals contained hereinabove are true 27 and correct. 28 / / / 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 2: The City Council of the City of Vernon hereby approves the Letter Agreement with Scott, a copy of which is attached hereto as Exhibit "A" and made a part hereof. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor and the City Clerk to execute said Letter Agreement for, and on behalf of, the City of Vernon. SECTION 4: The City Council of the City of Vernon hereby directs the City Clerk, or his designee, to send one fully executed Agreement to: Scott Co. Industrial Contractors Attn. Steve Klaus, Project Manager 14920 S. San Pedro St. Gardena, CA 90248 SECTION 5: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 24th day of July, 2002. ATTEST: BRUCE V. MALKENHORST, City Clerk EONIS C. MAL URG, M yor - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8032, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Wednesday, July 24, 2002, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, City Clerk - 4 - SUPPORTING DOCUMENTS EXHIBIT 0 CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Fro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 July 24, 2002 LETTER AGREEMENT Scott Co. Industrial Contractors Attention: Mr. Steve Klaus 14920 S. San Pedro Street Gardena, CA 90248 EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 Re: Malburg Generatinq Station Project: Citv of Vernon Gentlemen: The City of Vernon (the "City") has received a proposal dated April 29, 2002, from Scott Co. Industrial Contractors, a subsidiary of The Scott Companies, Inc. ("Scott") for the engineering, procurement and construction ("EPC") of the Malburg Generating Station ("MGS") Project. A contract for the EPC has not yet been fully negotiated. However, in order for the City to provide the California Energy Commission ("CEC") with information it requires under its six-month expedited license process and complete the design requirements for the EPC contract, the City must proceed with the development and completion of the engineering design and drawings. Scott has indicated a willingness to provide such services to the City. However, Scott is concerned that it will incur costs associated with the completion of the engineering design and development while the EPC is being negotiated. Scott Co. Industrial Contractor Letter Agreement Page 2 July 24, 2002 The City and Scott (hereinafter referred to as "the Parties") intend to proceed with the negotiation of an EPC contract as soon as practical. The Parties also intend to complete such negotiations no later than August 14, 2002. The City shall not be obligated or bound by any EPC contract until and unless the negotiations result in a EPC contract acceptable to both parties and approved by the Vernon City Council. The Parties hereto do mutually agree to this Letter Agreement subject to the following terms and conditions: 1. The effective date for this Letter Agreement shall be July 24, 2002. 2. Scott shall proceed to complete the engineering design and drawings to support the CEC permitting process and complete the EPC contract. 3. The City shall pay Scott on a time and material basis. The total amount to be paid to Scott under this Letter Agreement shall not to exceed one hundred fifty thousand dollars ($150,000.00). 4. Scott shall submit an invoice to the City within thirty (30) days of the end of any month in which services have been performed or costs incurred by Scott. The invoice shall state the amount due to Scott and itemize the services performed. 5. The City of Vernon may terminate this Letter Agreement at any time, without cause. 6. If the parties are able to agree upon an EPC contract, all sums paid under this Letter Agreement shall be treated as a credit to the City which shall be applied to the first payment to be paid by the City under the EPC contract. . aF Scott Co. Industrial Contractor Letter Agreement Page 3 July 24, 2002 7. This Letter Agreement shall be governed by the laws of the State of California. Please confirm your acceptance of this Letter Agreement by return. Sincerely, CITY OF VERNON ATTEST: Bruce V. Malkenhorst, City Clerk APPROVED AS TO FORM: Uzz Eduardo Olivo, City Attorney Leonis C. Malburg, Mayor ACCEPTED BY SCO. INPUSTRIAL CONTRACTORS, A�s,ab-S�diaA-� o T e Sc t Companies, Inc. Title CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 August 6, 2002 Scott Co. Industrial Contractors Attn: Steve Klaus, Project Manager 14920 S. San Pedro St. Gardena, CA 90248 Re: Letter Agreement Dear Mr. Klaus: EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 Transmitted herewith is a duplicate original copy of the above referenced approved by the Vernon City Council on July 24, 2002. If you have any questions regarding this matter, please call Mr. Kenneth DeDario at (323) 583-8811 ext. 211. ery truly yours, NelOGin Assistant to the Chief Deputy City Clerk NG/gm CC: Kenneth DeDario Dolores Fonseca Resolution No. 8032 Agreement No. 02-047 CITY ADMINISTRATOR/CITY CLERK'S INTER -OFFICE MEMORANDUM DATE: July 30, 2002 TO: Cindy Calzada, Secretary FROM: Nelly Giron Assistant to the Chief Deputy City Clerk RE: Resolution Nos. 8024, 8025, and 8032 Per your request, transmitted herewith are copies of the above referenced, approved on July 24, 2002. :gm CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator/City Clerk FAX (323) 826-1438 Finance Committee City of Vernon Honorable Members: CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 July 18, 2002 EDUARDO OLIVO City Attorney FAX: (562) 869-1883 KEVIN WILSON Director of Community Services & Water FAX: (323) 826-1435 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 826-1425 STEVEN E. PARKER Fire Chief FAX: (323) 826-1407 BRUCE W. OLSON Police Chief FAX: (323) 826-1481 oa The Malburg Generation Station Project is undergoing a six-month expedited permit process with California Energy Commission (CEC) and they are requesting that the City provides engineering design and drawings to support the expedited permitting process. This has been reviewed by the Director of Utilities and the City Attorney and it is hereby recommended that an Interim Letter Agreement with The Scott Company be approved and executed to provide the necessary engineering design and drawings at a cost not to exceed $150,000.00. Very truly yours, Bruce V. Malkenhorst Director of Finance BVM/gm j11 t . Ju y 18, 2002 TO: Bruce V. Malkenhorst, City Administrator FROM: Kenneth J. DeDario, Director of Utilities SUBJECT: Malburg Generating Station Project Letter Agreement I recommend approval of the attached Letter Agreement between the City of Vernon and The Scott Company (Scott) to provide for needed engineering design and drawings to support the California Energy Commission (CEC) permitting process. Since Vernon is in the six-month expedited permit process the CEC is requiring this additional information. This Letter Agreement will authorize Scott to complete the required drawings at a cost not to exceed $150,000. This cost will be offset against the Detailed Engineering, Procurement, Construction, and Startup (EPC) contract between the City and Scott, if one is approved by the City Council. This Letter Agreement has been reviewed by the City Attorney. If you have any questions or comments, please contact me. Thank you for your consideration. KJD:dm Attachment , Do G (-cam LETTER AGREEMENT Scott Company 14920 S. San Pedro St. Gardena, CA 90248 Attention: Mr. Steve Klaus Re: Malburg Generatinq Station Project: Citv of Vernon The City of Vernon (the "City") has received a proposal dated April 29, 2002, from Scott Company ("Scott") for the engineering, procurement and construction ("EPC") of the Malburg Generating Station ("MGS") Project. The parties have not yet negotiated a contract for the EPC. However, in order for the City to comply with the informational needs of the California Energy Commission ("CEC") as required by the six-month expedited license process and complete the required attachments for the EPC contract, the City needs Scott to develop and complete engineering design and drawings. This Letter Agreement shall be subject to the following terms and conditions: 1. The parties intend to proceed with the negotiation of an EPC contract with a fixed and a firm price that shall not exceed US$43,900,000 (forty-three million nine hundred thousand dollars). 2. Payment terms shall be mutually agreed upon. 3. The scope of services shall be as provided in Scott's EPC proposal dated April 29, 2002. Scott Company Page 3 Letter Agreement Please confirm your acceptance of this Letter Agreement by return. Sincerely, CITY OF VERNON Bruce V. Malkenhorst Title: City Administrator Date: ACCEPTED BY SCOTT COMPANY Name Title Date Scott Company Letter Agreement Page 2 4. The effective date for this Letter Agreement shall be July 24, 2002. Based upon this Letter Agreement, Scott shall proceed to complete the engineering design and drawings to support the CEC permitting process and complete the required attachments for the EPC contract. 5. The City shall pay Scott an amount not to exceed one hundred fifty thousand dollars ($150,000), which sum shall be billed by Scott on a time and materials basis. 6. The parties intend to enter into negotiations as soon as practical and to complete such negotiations no later than August 24, 2002. 7. This Letter Agreement shall be governed by the laws of the State of California. 8. In no event shall Scott be liable to the City of Vernon for any special, incidental or consequential damages of any kind or nature. 9. The City of Vernon shall not be obligated or bound by any contract until and unless the negotiations result in a contract acceptable to both parties and the contract is approved by the Vernon City Council or executed by the Vernon City Administrator and the Vernon City Attorney. 10. The City of Vernon may terminate this Letter Agreement at any time, without cause. 11. If the parties agree upon a contract that is approved by the City as set forth in paragraph 9 above, the Contract will replace this Letter Agreement. 12. If the parties are able to agree upon a contract, all sums paid under this Letter Agreement shall be treated as a credit to the City which shall be applied to the first payment to be paid by the City under the contract.