ADMINISTRATIVE COMMITTEE
2.	CONSIDER AUTHORIZATION TO RENEW VEHICLE MAINTENANCE SERVICES AGREEMENT WITH THE CITY OF MONTEREY FOR FIVE YEARS
Meeting Date:		June 4, 2012	Budgeted:	Yes
From:		David J. Stoldt,	Program/	Services and Supplies,
		General Manager	Line Item No.:	Transportation
Prepared By:		Suresh Prasad	Cost Estimate:	$100,000
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on June 4, 2012 and recommended _____________.
CEQA Compliance: N/A

SUMMARY: Since 1993, the District has received vehicle repair and maintenance service from the City of Monterey's Mechanical Division. Current labor rates are $102.00 per hour, which is the same rate that is being applied for City of Monterey vehicle maintenance services. Repair parts are acquired through City of Monterey Mechanical purchasing and are charged back to MPWMD at cost plus 8%. Fuel rates are based on the City of Monterey’s cost plus 5% to cover for their cost of pumps and software to maintain the fuel station. The existing agreement was signed in June of 2005 and provided for annual renewals by mutual consent. The City of Monterey has proposed a five-year renewal agreement from June 30, 2012 through June 30, 2012 with five consecutive one year renewals after the five year term. The funds necessary to defray the expected vehicle and equipment maintenance costs are included in the Services and Supplies, Transportation section of the current fiscal year budget. This five year contract has a cost estimate of $100,000 (based upon $20,000 for each year). The total transportation amount budgeted for Fiscal Year 2012-13 is $39,100, however, this includes amounts for services provided by entities other than the City of Monterey.

RECOMMENDATION: Authorize the General Manager to execute a vehicle maintenance agreement with the City of Monterey five years from June 30, 2012 through June 30, 2017. The Administrative Committee reviewed this item at its June 4, 2012 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. The current hourly labor rate is $102.00 per hour, parts are provided at wholesale cost plus 8 percent and fuel is provided at cost plus 5%. Added benefits to continuing this outsourcing 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 27, 2005, provided for annual renewals.

EXHIBIT

2-A Draft Agreement for Vehicle Maintenance Services

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