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Home My WebLink About0138.091• February 7, 1991 THE HONORABLE CITY COUNCIL palo Alto, California supervisory control and Data Acquisition System Sales Taxes MEmbers of the council: Report in Brief This staff report requests that the City Council approve a Budget Amendaent Ordinance (BAO) to pay a claim ~or sales tax and interest thereon for the Supervisory control and Data Acquisition systea purchased from Landis , Gyr under contract CO-4528, which was concluded in 1987. Funds would be transferred within the 1990-92 Electric Fund Capital Improvements Program froD the -Third 60kV Under-ground Circuit-elP project to the ·Substation Improvements/SCADA-CIP project for this purpose. BAckground The city of Palo Alto contracted in 1985 with Landis' Gyr for the purchase of the Utilities Supervisory Control and Data Acquisition (SCADA> computer, software and remote terminal units. The contract provided for the City to pay all sales and use taxes hut during the performance of the contract the taxable properties were not identified and taxes paid. Upon audit by the State Franchise Tax Board, Landis and Gyr was required to pay $100,122 in sales taxes for the SCADA system and $39,288 interest thereon. Landis , Gyr fiied a claim with the City for the total of $140,010, which the city Attorney presented to the city Council and obtained approval for compromise and settlement in executive session on December 11, 1990. The city Attorney's Office bas been consulted and concurs in the payment of the claim rrom the furldinq sources identified below. The contract ~ith Landis , Gyr has been concluded and the elP for purchase ot the SCADA system closed. Installation of the SCADA system is proceedinq under a current CIP project entitled ·Substation ImprovementsjSCADA-; however. funding is not adequate to also pay the tax bill. CIOI.138,tl • • In the current elF, staff reque$~ed and received council approval to install a third 60kV underground circuit to support the electric subtransmission system~ This project includes funding of $1~500,OOO in 1990-91 and $1,500,000 in 1991-92. During the budget process, staff stated that a detailed analysi!3 \I.'ould be done prior to impl~Mcntinq this project. This analysis of the electric system was completed in August 1990~ and it shows that the additional underground circuit is not needEd at this time. The analysis does recommend several changes to improve the reliability and capacity of the existing circuits. These improvements are expected to reg-,.lire only $500,000 of thO! $3,000,000 available ever the next t~o years. St~ff will perform an annual review to determine when the third circuit is needed and will return to Council for fundinq in a future budget. Staff recommends that the taxes be paid from funds no longer required for the third 60kV circuit. Recommendaliqn Staff recommends that the Council: 1. Approve the attached Budget Amendment Ordinance transferring $l~OIOlO.CO from the ~Third 60kv Underground Circuit-CIP project to the ~Substation Improyements/SCADA-CIP project in the Electric FUnd; 2. Authorize the city Manager Or his designee to make a payment to Landis' Gyr in the amount of $140,010.00 for the taxes and interest thereon on the purchase of the SCADA system under contract 00-4528. Respectfully submitted~ j.',. / 1<",/.,.,,_ "f:' -f 11'1 A5I i;' -,,/ ,--, EDWARD J. KRIZEK Assistant Director of Utilities -Engineering , /~<-~ hCHARD L. YOONc/ Director of Utilities ~~~fl,~ WILLIAM z~' City Manager Attachments: Invoice from Landis , Gyr Budget Alnendment Ordinance CXII,138:91 • ./ ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1990-91 TO PROVIDE AN ADDITIONAL APPROPRI~TION FOR SALES TAX OWED FOR THE SUPERVISORY CONTROL AND DATA ACQUISITION SYSTEM WHEREAS, pursuant to the provisions of section 12 of Article III of the Charter ot the City of Palo Alto, the Council on June 18, 1950 did adopt a budget for fiscal year 1990-91; and WHEREAS, the city purchased a supervisory Control and Data Acquisition System (SCADAJ for monitoring and controlling the electric distribution system from the [.andis ana Gyr company; ancl WHEREAS, the contract 'With Landjs and Gyr provided for the City to pay all sales and use taxes; and WHEREAS, the contract with Landis and Gyr was completed in 1987 without payment to the State of california for sales and use taxes; and WHEREAS, Landis and Gyr was, thereafter, auditea by the state o~ California and required to pay the state $100,722 for sales tax on the SCAOA system and an additional $39 .. 288 interest on that unpaid balance; and WHEREAS, the City Council has approved in executive session on December 17, 1990, the payment of the claim by Landis and Gyr for the sales taxe$ and interest paid to the state under protest; and WHEREAS, funds exist in the Electric Fund crp project KThird 60kV Underground Circuit-which could be used for paying the sales tax and interest~ NOW. THEREFORE, the Cc .. uncil of the city of Palo Alto does ORDAIN as follows~ SECTION 1. The sum of One Hundred Forty Thousand and Ten Dollars ($140,010) is hereby transferred from the Electric Fund CIP project ·'l'hird 60kV Underground Circuit· to the Electric Fund CIP project -Substation Improvements/SCADA-. ~I()N 2. 'I'his tr-ansaction wi 11 have no impac:t on Reserves ~ SECTION _3. The Council of the city of Palo Alto hereby finds that the enactment of this ordinance is not a project under the California Environmental Quality Act and, ther-efore, no environmen tal impact assessment is necessary. , • SECT tON t. Municipal Coda# &~opti.on. As provided in Section 2.04.37~ of the PalQ Alto this ordinance shall become effect iva upon I~TRODUCEO AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: city Clerk Mayor APPROVED AS TO FDRM: Asst. city Attorney APPROVED: city Manager Director of Finance DIrector of UtilIties 90-1.10 A"gut 11, U9C ~~0~ D (LA~DlS & GYR Landls & Gyr Systems, Inc. 1730 Ted'looIogv DnYe SariJo9f!, CA. 95~1 D-1..Y.l5 Te/epI'lOl-..e (4Ofl) 4s.:J.52Z2 T~ax (408) 4S.2·5260 Mr .. "..icbael Baanland l project Ha.nager Utilities Dept., Resources Pl4nninq Div. City of Palo Alto P.O. so" 10250 Palo Alto, CA 94303 Subject, State & Local 551e. and Ose Taxes, L&G Invoice No. 47470M Dear I!r. Beanland.. Enclosed ia t.b.e L'G invoice for t.he sul:lject taxes on the .EXS 8yBt_~ You and I discuased this Subj9Ct some time ago and L'G has subsequently been audited by the State Board of Equalization and haa paid the taxes indicatQd on the attached invoice. If you have questions regarding the invoice, please call me. very truly yours, LANDIS , GYR SYSTpIS, INC. la··;··· (k~ wiir~B Program l!Ianagement Manager cc: W. ~. Holehouae, Admdnistrative Manager L. V. Johnson, Controller :9:LL TO, 1:-.10 Te::~":;;:~' Dr've San ~ :t. £I51l<H36i.i letephc".n.: ,':-::8: 297·9'3;.'0 ~)I ,.1J3, :'31-3260 I Mr. Mikt BeanTand , Project Manager Ut'liti~s Dept.~ Resources Plannf~9 Div. City of Palo Alto P.O. Box 10250 Palo Alto, CA 943CJ ~- 1 ~s:;";;;! po"'-;o-;,·;;,:-----i'f,·::;L'z;· '[.": .. ~::: .• 'C •.• ::: .. ,=.,=,=. ==L=s="=,,,,,=,,=,=, :::'::';~~~!;~b":;;;,;;;':=~4;~;'; ~gii...-::~ ~::';::;:"::~=:;T,:;,;;;,~::,;~;;.~'''':'T£ s ~."P~D I TfR '-IS - ... , ""'" <>omT ii, ,. Ju_ummmmmm___ "','"T..:30"",O"',,',,s,-__ [~~;" 'j:1="'="~:;;;:~"~::~~ ::::.; .. ; .. ~:;:,,"t: -='----, =-='-O-E-S.LCR-,-P-TIO--'N-------'---LUN'T PR ICEjmENslON , I . i Te bill for State & local Sales and Use • J Taxes on shipment of EMS system to City of I I. Pal, Alto per contract signed .Iugust 1985. Please refer to attached Board cf EauaTization I I Audlt Fonn. . I I 1 Taxable Amount I I I DR 132UO I C~ 37100 $1.~38,884 ,00 Tax @ i::': Plus interest TOTAL i>J10lJ11T DUE $100,722.00 39,288.00 ____ ~_~ _______ ..1!'_'"_;_1 '" 1