ITEM:		ADMINISTRATIVE COMMITTEE
1.	CONSIDER AUTHORIZATION FOR EXPENDITURE OF BUDGETED FUNDS FOR RENEWAL OF VEHICLE MAINTENANCE AND FUEL CONTRACT WITH CITY OF MONTEREY
Meeting Date:			September 7, 2006	Budgeted:	Yes
From:			David A. Berger,	Program/	Services and Supplies,
			General Manager	Line Item No.:	Transportation
Prepared By:			Rick Dickhaut	Cost Estimate:	$30,000
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on September 7, 2006 and 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. The existing agreement was signed in June of 2002 and provides for annual renewals by mutual consent. For Fiscal Year 2006-07, the City has proposed another one-year extension with an increase in the hourly labor rate from $68 to $85. Even with the increase, the hourly rate is still very competitive compared to area retail rates. The cost for parts and fuel continues to be based on the City of Monterey’s cost plus 15%, which is below retail levels. 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 2006-07 budget. The total amount budgeted is $40,000, however, this includes amounts for fuel and maintenance services secured from entities other than the City of Monterey.

RECOMMENDATION: Authorize the General Manager to execute a vehicle maintenance agreement with the City of Monterey for Fiscal Year 2006-07. The Administrative Committee reviewed this item at its July 7, 2005 meeting and recommended __________ by a vote of _ to _.

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 vehicles, trailers and other 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. Added benefits to continuing this outsourcing to the City of Monterey include the quality of the City's automotive service, efficiency in tracking preventive maintenance 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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