ITEM: CONSENT CALENDAR

5. CONSIDER AUTHORIZATION TO EXTEND VEHICLE MAINTENANCE AGREEMENT WITH THE CITY OF MONTEREY FOR FISCAL YEAR 2004-2005

Meeting Date: June 21, 2004 Budgeted: Yes

Program Line Item No.: Services and Supplies, Transportation

Staff Contact: Rick Dickhaut Cost Estimate: $25,000

General Counsel Approval: N/A

Committee Recommendation: Administrative Committee recommended _______________.

CEQA Compliance: N/A

SUMMARY: Since 1993, the District has received outstanding vehicle repair and maintenance service from the City of Monterey's Mechanical Division. Current labor rates are $65.00 per hour and the cost of parts remains below prevailing retail rates. Fuel rates, which are based on the City of Monterey’s cost plus 15%, also remain below retail level. The existing agreement was signed in June of 2002 and provides for annual renewals by mutual consent. The City of Monterey has proposed a one-year extension with one change to the current rates, an increase of the labor rate to $68.00 per hour. All other costs would remain the same.

RECOMMENDATION: Authorize the General Manager to execute a vehicle maintenance agreement with the City of Monterey for Fiscal Year 2004-2005. If approved, this item will be adopted along with the Consent Calendar. The Administrative Committee reviewed this item at its June 7, 2004 meeting and recommended ___________ by a vote of _ to _.

IMPACT TO STAFF AND RESOURCES: As this item is routine, the funds necessary to defray the expected vehicle and equipment maintenance costs are included in the Services and Supplies, Transportation section of the Fiscal Year 2003-2004 budget. The total amount budgeted for 2003-2004 is $30,300, however, this includes amounts for services provided by entities other than the City of Monterey.

BACKGROUND: In January of 1993, the District contracted with the City of Monterey for vehicle maintenance. Since that time, the City has provided responsive and efficient repair and preventive maintenance service to the District=s fleet of eleven vehicles and two trailers, as well as other wheeled and powered equipment. In August 1993, the contract was expanded to include the purchase of gasoline and diesel fuel from city pumps. Despite some increases over the years, costs to the District for fuels, labor, and parts have remained very competitive. The current hourly labor rate is $65.00 per hour, parts are provided at wholesale cost plus 15 percent and fuel is provided at cost plus 15%. Added benefits to continuing this out sourcing to the City of Monterey include the quality of the city's automotive service and preventive maintenance system, efficiency in tracking preventive maintenance and billing and convenience for staff due to the proximity of the city=s facilities to the District=s main office. The current agreement, which was executed on June 21, 2002, provides for annual renewals.

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