The URL can be used to link to this page

Home My WebLink AboutStaff Report 2505-4702CITY OF PALO ALTO CITY COUNCIL Monday, June 16, 2025 Council Chambers & Hybrid 5:30 PM Agenda Item 13.Approve and Authorize the City Manager or Designee to Execute Purchase Orders as Needed with the Okonite Company, Extending the Term for the Blanket Purchase Order for Purchase and Standardization of Underground Cable Through December 31, 2025, and to Increase the Not-to-Exceed Amount by $100,000, for the Extension Period. CEQA Status: Not a Project. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: June 16, 2025 Report #:2505-4702 TITLE Approve and Authorize the City Manager or Designee to Execute Purchase Orders as Needed with the Okonite Company, Extending the Term for the Blanket Purchase Order for Purchase and Standardization of Underground Cable Through December 31, 2025, and to Increase the Not-to- Exceed Amount by $100,000, for the Extension Period. CEQA Status: Not a Project. RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or designee to execute an extension of the existing Blanket Purchase Order and equipment standardization with the Okonite Company (Okonite) through December 31, 2025, along with increased funds for the six month extension not to exceed an additional $100,000. EXECUTIVE SUMMARY Staff recommends that the City Council approve extending the existing blanket purchase order authorization and equipment specification to purchase cables from Okonite, including both a six- month extension of time from the end of Fiscal Year 2025 to the end of the calendar year, December 31, 2025, and increasing funding by $100,000 for the extension period, allowing Utilities to continue purchasing medium voltage cables while staff prepares a new longer-term purchase order. This recommendation will provide City staff the ability to continue to purchase medium voltage cable necessary for the completion of the Foothills Wildfire mitigation project, initial portions of the Grid Modernization Project, and to support various new and redevelopment projects or any unanticipated emergency repairs. BACKGROUND The electric distribution system in Palo Alto is comprised of overhead and underground wires to provide power to residents and commercial customers. For the underground system, City of Palo Alto Utilities’ (CPAU) underground cable technical specification covers the physical and electrical requirements for operation on the City’s medium voltage (4,000 and 12,000 Volts), 60 Hertz, 3- phase, and 3 or 4 wire systems. Cables used in CPAU operations must meet CPAU’s cable specifications and industry standards. The City’s underground cable specification ensures a high level of performance and reliability standard. Over the past 20 years, CPAU staff have installed Okonite underground cable without a cable failure. Any exceptions to the underground cable specification by any cable manufacturer must be reviewed and approved. Okonite is the only cable manufacturer that fully meets the City’s specification for both cable insulation and a manufacturing process that ensures quality and reliability. City Council has previously approved an equipment standardization with Okonite for medium voltage underground cable pursuant to Section 2.30.900 of the Palo Alto Municipal Code through the end of Fiscal Year 2025, and this report requests an extension of that standardization through the end of calendar year 2025. ANALYSIS •Okonite has provided the City with a base price for the four types of cable through December 31, 2025, the extended purchase order term. •An adjustments to metal pricing may rise but cannot increase higher than the CPI-W index. •If metal costs decrease the City will receive that pricing benefit. •New or adjusted tariffs will impact the price per foot of cable. Changes to Okonite’s material sourcing due to tariffs will be applied, up or down, and passed through to the City. To date, Okonite has absorbed cost increases due to new tariffs by limiting price increases to 1%. Future invoices during the extension term will include a separately stated charge for any tariff- impacted components. 2. Repair, maintenance, and replacement costs will be minimized. •Okonite is a supplier to PG&E which enables Palo Alto to benefit from bulk pricing discounts achieved when using the same cable as PG&E. •Okonite cable meets the City’s specification for both cable insulation and manufacturing processes that ensures quality and reliability. 3. Supplies and spare parts are minimized. •As the City uses some of the same cable as PG&E, Okonite keeps stock on hand and can meet the City’s short delivery requirements. Okonite maintains a minimum stock of the cables used by the City for emergency requests. •Okonite offers the City the ability to order reels cut to length for specific projects to help manage inventory and reduce waste. •Okonite’s factory (Santa Maria, CA) is located relatively close to Palo Alto and can expedite delivery of cable if needed for emergencies. 4. Standardizing existing equipment facilitates efficient construction and maintenance practices by helping City employees to more effectively plan, design, identify, and work with existing utility infrastructure. • Engineers and field workers are familiar with and can easily identify and work with Okonite cables because of the existing prevalence of these cables in the City’s system. • By using a standard product Utilities staff can implement a consistent maintenance and replacement program. For the past 20 years, Okonite has consistently been the lowest responsive bidder and awarded the purchase order to supply medium voltage underground cable as needed to the City. In 2020, the Council approved staff’s recommendation for a five-year standardization and authorization for a blanket purchase order for $350,000 each year. Cable shipments have never been missed and there have been no quality issues associated with Okonite’s cable. In addition, Okonite has provided excellent customer service to engineering and operations staff with training and support. Therefore, Staff requests an extension to the approved exception to the City's competitive solicitation requirements based on the approval of the equipment standardization, consistent with Section 2.30.360(e) of the Palo Alto Municipal Code. Staff requests authorization to increase the not-to-exceed amount by $100,000 through December 31, 2025. Any unspent funds will be returned to reserves or the capital improvement project as part of the year end procurement process. Timeline FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: