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CR 98-70 Approve NSP Excelsior Blvd Street Lighting ContractY 0 O April 30, 1998 Council Report 98 -070 Approve NSP Excelsior Boulevard Street Lighting Contract Proposed Action. Staff recommends ado of the following motion: Move that Council authorize the Mayor and City Manager to enter into a contract with Northern States Power (NSP) for installation of 64 streetlights on Excelsior Boulevard from Shady Oak Road to 9 Avenue. Overview. In July, 1997 City Council approved the Excelsior Boulevard lighting design including base, pole and fixture style and color. The approved light style is as shown on the attached drawing. The approved color was a very deep raspberry or burgundy color. Staff stated at the July Council meeting that NSP would prepare a proposal to include installation and maintenance of the 64 streetlights. Staff received an NSP proposal of $205,722.00 and is now submitting it for Council consideration. Primary Issues to Consider. • Street lighting budget - NSP proposed fee • Bidding requirements for public improvements • Contract specifics • Schedule for installation Supporting Information. Analysis of Issues Streetlight design drawing City Attorney opinion regarding competitive bidding • NSP Letter and Contract Hallberg Engineerin opinion of probable cost N mber 21, • ' SP letter describing project scope J Steven J. Stadler, Public Works Director Council Report 98 -070 Page 2 Analysis of Issues. Street Lighting budget — NSP proposed fee The original Excelsior Boulevard reconstruction, Phase I street light budget was $328,000. The total annual maintenance and energy costs for these additional street lights is approximately $5,000.00 Hallberg Engineering provided a review of this project scope and an opinion of probable cost. NSP's requested construction fee of $205,722.00 is close to the $172,000 - $190,000 contractor cost range estimated by Hallberg Engineering. NSP's maintenance and energy fees are the Minnesota Public Utility Commissions approved amount for NSP - installed 150 watt HPS street lights. • Bidding requirements for public improvements The City Attorney has reviewed this project to determine whether the city must seek competitive bids. He states that based on the case law the competitive bidding statute does not apply to this project — see attached City Attorney memo. • Contract Specifics The contract will require NSP to purchase all materials and install the specified street lights and maintain them for a period of 25 years. Maintenance includes repair or replacement of all street light components including knockdowns or damaged poles, replacement of burned out lamps, repairing wiring, etc. Council Report 98 -070 Page 3 • Schedule for installation NSP anticipates installing the new street lights prior to the boulevard restoration work associated with the Excelsior Blvd street reconstruction. This means the lights will be installed this fall and/or next spring. • 15 0" --*.i 20" 0 ha— K I ", SE wASPI:Nr.:TC.N LL 1<16 CAPC.L 0. 1 .47,7r. TAPERED ALUV;NL9.1 c%i8F FLOREKTNE BASE (i. REV I ALTERATION cosapT 0 wG peratzT/cosiourat 20:60 2.6. 20 lnr 208 ezz 8319BON NagNISIDH COLOR RAL #3007 CUSTOMER APPROVAL: KING LUMR/AIRE SAO WAL1=-2 04. P0. eme 7. Qu-CTbi PA PDX 24$ JEMRSDN. oroo 0.1/44. CoAeixo.* AAS 1,$5 :mat Rovn 40N 40,467 0.4 rt.p4803 20€A0675 WOE: 07/02/97 Ert A.A. VWM\2COA0t75 09T 2--S2e-ET 9 Date: April 2, 1998 To: Steven Stadler From: Jerre Miller Re: NSP Contract city offfopkirts 1010 First Street South • 5fopkins, 9KN55343 -7573 • Phone: 612 -935 -8474 • Fax 612 -935 -1834 MEMO I have reviewed the packet concerning the NSP Contract for installation of light standards and service of them thereafter. The memorandum attached from the Eden Prairie City Attorney on a similar project was interesting and I agree with the conclusion if the circumstances of the Eden Prairie project and the proposed Excelsior Boulevard project are closely similar to each other. Hubbard Broadcasting, Inc. cited as Hubbard Broadcasting. Inc. v. Metropolitan Sports Facilities Commission, 381 N.W.2d 842 contains favorable commentary for cities when complex issues arise about whether a contract should be submitted to competitive bidding or not. The Hubbard case cited an authority that provisions in a statute about competitive bidding should be narrowly construed rather than broadly construed thus allowing cities to address this kind of an issue sensibly and in a practical way. Splitting the approach to the lighting project competitively bidding on light standards and then dealing exclusive for maintenance and : ical service with NSP is neither practical nor sensible. c: \file \hopkins \ss -memo 1 An Equal Opportunity Employer ROBERT r. LANG ROGER A. PAULY DAVID H. GREGERSON RICIL F. ROSOW MARK J. JOHNSON JOSEPH A, MAN JOtL*r W. LANG- - SUSAN M. LACH••- 1L Defy H. DU CHER WILLIAM R. h1ILLER TODD A. BATTLER JENNIFER X. INz - Atm Amoral Vt Wiscon »a - also a Centaca Public Accountant ""Also Admitted so Cobr Ito Mr. Eugene Dietz Eden Prairie City Offices 8080 Mitchell Road Eden Prairie, MN 55344 -2230 RE: Eden Prairie Marketeenter Lighting Dear Mr. Dietz: 1 t . • is LANG, PAULY & GREGERSON, LTD. ATTORNEYS AT LAW FIRST BANK PLACE 1600 IBM PARK BUILDING 650 THIRD AVENUE SOUTH MINNEAPOLIS. MINNESOTA 55402 -4337 TELEPHONE: (612) 338 -0755 FAX (612) 349 -6718 May 24, 1994 You have asked whether. the City must seek competitive bids for a proposed street light project in the Marketcenter area. I . understand that the particular fixtures to be used are decorative in nature and not the ordinary street light pole. NSP has made a proposal whereby NSP would supply electric service, own, operate, repair and maintain the light poles, fixtures and underground wiring and charge the City a per fixture fee each month. The City would be required to pay the capital and installation costs up front. By doing this, the City reduces ,the monthly charges from the normal leased ratc and allows NSP to install, 'own and maintain the entire system for 25 years. Contract amounts estimated to exceed $25,000.00 must be solicited by competitive bidding under Minnesota Statute 471:345. The statute applies to the sale or purchase of supplies, materials, equipment or the rental thereof, or the construction, alteration, repair or maintenance of real or personal property. The Minnesota Supreme Court held that the bidding statutes are to be narrowly applied. Hubbard Broadcasting, Inc. v. Metropolitan Sports Facilities Commission, 381 N.W.2d 842 (Minn, 1986). The following paragraph from the Court's Opinion is instructive: "We have recognized that public bidding provisions are to be construed narrowly. In R.E. Short Co. v. Minneapolis, 269 N.W.2d 331, 342 n. 11 (Minn. 1978), we noted that the public bidding statute is restrictive and should not be extended to contracts not envisioned by the legislature. In Griswold v. Ramsey County, 65 EDEN PRAIRIE OFFICE sUrrE )70 :so PRAtIttE CENTER DANE EDEN PRALRIE. MINNESOTA 55:1.4.4 TELEPHONE: (51_1 a29.733s FAX 1612) 829.071) REPLY TO E,A?O . S OFFICE LANG, PAULY & GREGERSON, LTD. Mr. Eugene Dietz May 24, 1994 Page 2 N.W.2d 647, 651 (Minn. 1954), we stated: `In the absence of a controlling constitutional, statutory, or charter provision, it is generally held that public policy does not demand that a municipal corporation ... advertise for bids and let the contract to the lowest responsible bidder.' • . . One authoritative text notes: `These [competitive bidding] provisions are strictly construed by the courts, and will not be extended beyond their reasonable purport. Such provisions must be read in the light of the reason for their enactment, lest they be applied where they were not intended to operate and thus deny municipalities authority to deal with problems in a sensible, practical way.' 10 E. McQuillin, Municipal Corporations (3rd ed.) §29.29 (citations omitted). This principle of narrow construction requires that the contract being challenged must unambiguously fall within the language of the public bidding statute ... " The contract considered by the Hubbard Broadcasting case is instructive. In that case, the Metropolitan Sports Facilities Commission entered into a contract with American Sign to purchase a scoreboard for the Metrodorne. As all or part of the consideration the Commission paid for the purchase of the sign from American Sign, the Commission granted American Sign the exclusive right to sell and contract for advertising on the scoreboard. The agreement also provided for a splitting of revenue from the advertising. The Court held that the contract was not a contract that fell within the purview of the statute as "many of the features of the agreement are simply beyond any fair meaning of `contracts for materials, supplies and equipment' within the statute." 381 N.W.2d at 846. The Court held that the scoreboard system agreement was not a contract for supplies, materials or equipment and that the commission did not violate the public bidding statute by entering into the agreement. The competitive bidding statute has not been interpreted to apply to contracts for services other than services for maintenance of property. A contract for snow removal from town roads is not subject to competitive bidding for example. Op. Atty. Gen. 707(a), March 5, 1986. Further a City does not have to advertise for bids for a contract for the collection and hauling of refuse. Op. Atty. Gen. 707(a) - 15 (December 23, 1977). Based on the Hubbard Broadcasting case, 1 believe it is reasonable to conclude that the competitive bidding statute does not apply to this case. As with the situation in Hubbard Broadcasting, we also have in this situation an element of the proposed contract that is beyond a contract for materials. supplies and equipment, i.e., the purchase of electricity. The purchase of electricity by the City is not subject the competitive bidding statute. The argument could be made that NSP would supply the electric service even though the poles, fixtures and wiring were not purchased and/or leased as part of the transaction. However, the same statement could be made with respect to the purchase of the scoreboard in Hubbard Broadcastine. The Commission could have purchased a scoreboard separate from selling the advertising rights and certainly the �T ;y G, PAULY & GREGERSON, LTD. Mr. Eugene Dietz May 24, 1994 Page 3 purchase of that piece of equipment, isolated from the advertising feature, would have required competitive bidding. Since the Court did not require such unbundling of contract features in the Hubbard Broadcasting case, 1 believe it is reasonable to assume that such would not be required is this situation as well. Based on the above, 1 believe the Council could legally enter into a contract with NSP without fulfilling the requirements of competitive bidding. If you have any questions regarding this matter, please contact me. Very truly yours, LANG, PAULY & GREGERSON, LTD. RFR/snnt cc: Roger Pauly rft‘ep\marketst\urambrue. ttr MP 2 March, 1998 Steve Stadler Director of Public Works City of Hopkins 1010 First Street South Hopkins, MN 55343 Dear Steve, Ay 1518 Chestnut Avenue North Minneapolis, MN 55403 Telephone (612) 630 -4282 Thank you for the opportunity to work with you on the upgrade of the Excelsior Boulevard Street Lighting. In response to the January 1998 letter from Hallberg Engineering, NSP has revisited and re- evaluated our proposal. In viewing the costs for several aspects of this project from a "Total Project" perspective we have determined that we can justify a reduction based on enhancements to the ability to maintain the overall system. This will allow NSP to reduce the price of the proposed system to $205,722.00. The maintenance costs, $35,900.00 versus $70,000.00, are where the major differences can now be found. Per that letter, the premium option for the "Contractor Costs" during the 25 year period of $35,900.00, and with no mention of repairs or replacement of poles, wires or luminaires, are based on; • Replacement of 1 ballast per fixture • Replacement of 2 burned -out lamps per fixture (Spot Relamping) Northern States Power Company NSP's Full Service Maintenance, standard for this type of installation, provides for the repairs and replacement of luminaires, and wiring, along with the following coverage for the full 25 year period; • Group relamp all lamps on schedule (based on fixture type and roadway conditions, ranging 3 to 5 times over the 25 year period) • Repair /Replacement of knocked down or damaged poles • Replacement of any burned -out lamps within an agreed upon time period after reporting • Replacement of all broken or damaged glassware and /or gaskets • Replacement of all failed ballasts Replacement of all failed starters Replacement of all failed photo - electric controls • Replacement of all failed fuses Our maintenance efforts are more than double the proposed efforts of the "Contractor" and the proposed coverage is for the full extent of the system, not just the visible working portions. The NSP Rate Schedule for this type of system, Decorative Underground - Group V, provides a flat monthly rate of $6.45. $3.65 is maintenance and $2.75 represents a flat energy cost. Therefore, $3.65 x 64 x 12 x 25 = $70,000.00 over a 25 year period not "Up- front ". Regard Jim Rhodes Community Service Manager Receipt of the above amount hereby acknowledged on behalf of NSP by 1. The customer hereby grants NSP the right, privilege and easement to install, operate and maintain its underground facilities on the property as described above and /or the approximate location as shown on the attached "Exhibit A ". 2. The customer also agrees that, prior to NSP starting work: (a) the route of NSP's underground installation shall be accessible to NSP's equipment; (b) all obstructions shall be removed from such route at no cost or expense to NSP; (c) ground elevation along the route shall not be above or more than four (4) inches below the finished grade; and (d) the area under the transformer pad shall be compacted to at least 2000 lbs. /sq. ft. 3, CITY OF HOPKINS agrees to pay all additional installation costs incurred by NSP because of (a) soil conditions that impair the installation of underground facilities, such as rock formations, etc., and (b) sidewalks, curbing, black top, paving, sod or other landscaping and obstructions along the cable route. NSP will backfill trench with existing soil. Restoration of construction area on customer property is the responsibility of the customer. 4. NSP is not responsible for any customer -owned underground facilities not exposed at the time service is installed. 5. The underground installation may be subject to a winter construction charge if it is installed between October 1 and April 15. N/A to if NSP determines winter conditions exist when the underground facilities are installed. NSP e will a h w rater construction charge if prior to October 1st the customer is ready to accept electrical service, has executed this form and has notified NSP in writing that the requirements of Paragraph 2 hereof have been fulfilled. 6. The underground facilities installed by NSP, shall be the property of NSP and any payments made by the customer, or their contractor, shall not entitle the customer to any ownership interest or rights therein. 7. The customer agrees to pay the cost of relocating any portion of said underground facilities made to accommodate the customer's needs or required because of altering the grade, additions to structures, installing patios, decks or gardens or any other condition which makes maintenance of the company's facilities impractical. 8. Customer must provide the following minimum clearance around the transformer: front, 10 feet; sides and back, 2 feet. EXCEPTION: side facing building must have 30" clearance. These clearances must be at the same grade as the transformers. If screening is to be used, the area in front of the transformer must be left open or a hinged door, easily operable by one person, must be provided. The area must be accessible 24 hours a day. $ $ $ $ $ UNDERGROUND SERVICE FORM Form 17- 2759(2 -94) In consideration of NORTHERN STATES POWER COMPANY, hereinafter called "NSP ", extending its facilities to make 120 volt, 1 phase, 2 wire underground service available (customer) CITY OF HOPKINS at (service address) 0 Excelsior Boulevard (city) Hopkins the sum of Two Hundred - Five Thousand, Seven Hundred Twenty - Two Dollars ($ 205,722.00 ) will be paid to NSP by (other than above) Same Address (other than above) 1010 Second Street South City Hopkins Zip 55343 in accordance with the following terms: In Advance - Returned with signed contracts Credit Approval Excess U.G. Distribution Lateral (Primary Cable) Excess U.G. Service Lateral U.G. Service Lateral (Secondary Service From Utility Pole) U.R.D. Installation Including U.G. Service Lateral U.G. Distribution Lateral (Primary Cable) $ $ $ $ $205,722 Winter Const. Charge 1 (See paragraph 5) Specific Service Location or Route Replace Overhead Line With Underground Line Temporary Service KVA Other (explain) Install 64 - Group 5 Fixtures on Excelsior Boulevard * *Customer agrees to pay monthly Residential Service Underground Trench Ft. rate of the double asterisk. ❑ Applicable ® Not Applicable type of installation indicated by a Dated this day of 19 98 Dated this Customer CITY OF HOPKINS Contractor Iliv City Manager Mayor / By File # 737659 y NSP Rep James H. Rhodes 3/31/98 Div Edina NSP Proj /Serv. No. SHAD HPK AAM Const.$ 205; 722, ah $ Maint. $ Oper. $ Transf. $ = Total $ 205,722.00 Copy — Division Accounting (Original) • Copy — Division Distribution Engineering • Copy — Customer day of 19 Northern States Power c/o RPLS Coordinator 5309 W. 70th St. Edina, MN 55439 EXHIBIT B The City of Hopkins has elected to receive street Tight service for unique non- standard Designer Series NSP facilitates. The City shall purchase, own and provide, upon request by the Company, the replacement non - standard components to keep the unique non - standard facilities operable. The non- standard components to be purchased and warehoused by the City are: 1.) The King High Performance Acorn Luminaire - 150 watt HPS, Type II fixture 2.) The LUMEC Pole, smooth tapered extruded aluminum shaft, (LMS -14' 6" RAL3007- 11695A) The components shall be made available to the Company at the City's Public Works facility at 3100 Hopkins Crossroads, Hopkins Minnesota 55343. Once NSP has picked up and installed the above listed replacement part, the City shall submit a bill to NSP to recover its original purchase cost. Accompanying the bill shall be a copy of the original sales invoice from the part supplier. This bill shall be payable within 30 days and is to be sent to: If, in order to comply with the normal operation of he unique Designer Series street lights, it is necessary to install temporary facilities due to City's inability to provide the non - standard components, when requested by the Company, the City shall be responsible for all costs incurred for such temporary facilities. The City will reimburse the Company for such costs within 30 days after receipt of a bill from the Company. Form 17 -2796 AVAILABILITY: Available for year -round illumination of public streets by electric lamps in luminaires mounted on standards and served through underground circuits, where the facilities for this service are furnished by Company. Street lighting service under this schedule is limited to areas having a Company -owned underground electric distribution system. RATE: Group V Purchased Equipment Rate Schedule C (Minnesota) To Street Lighting Contract DatedF e b ru a r y 15, 19 7 9 STREET LIGHTING (Company Owned) Designation of Lamps Monthly Rate per Standard 150 Watt High Pressure Sodium $6.45 Refer to Rate and Rules for application of Street Lighting Rates which are attached for specific information. Note here if customer wishes NSP to retain ownership NS P w i 11 retain ownership SERVICE INCLUDED IN RATE: Company shall operate and maintain the Custom Street Lighting system using Company's standard street lighting equipment. DAILY OPERATING SCHEDULE: The daily operating schedule of the above lamps shall be from approximately one -half hour after sunset until one -half hour before sunrise. OUTAGES: If illumination from any lamp is interrupted and said illumination is not resumed within 24 hours from the time Company received notice thereof from customer, 1/30 of the monthly rate for such lamp shall be deducted for each night of nonillumination after such notice is received. The above rate schedule has been filed with the Minnesota Public Utilities Commission effective February 3 , 19 98 Date March 31, 1998 Supersedes Rate Schedule C Dated De c emb e r 31, 19 9 2 W I Northern States Power Company Minneapolis, Minnesota 55401 MINNESOTA ELECTRIC RATE BOOK - MPUC NO. 2 STREET LIGHTING SYSTEM SERVICE RATE CODE A30 AVAILABILITY Available for year -round illumination of public streets, parkways, and highways by High Pressure Sodium (HPS) or Metal Halide electric lamps in luminaires supported on poles, where the facilities for this service are furnished by Company. Underground Service under this schedule is limited to areas having a Company owned underground electric distribution system. RATE Designation of Lamp 70W High Pressure Sodium 100W High Pressure Sodium 150W High Pressure Sodium 250W High Pressure Sodium 400W High Pressure Sodium 175W Metal Halide 250W Metal Halide 400W Metal Halide 1,000W Metal Halide Date Filed: 06 -30 -97 Docket No. E,G002/M -97 -985 E: RATES%CURRENTIMN ELECIME 5 074.DOC Overhead $8.70 $8.85 $10.15 $13.85 $17.70 $12.60 $15.90 $19.70 $28.95 Section No. 5 Original Sheet No. 74 Relocated from MPUC No. 1 Sheet No. 5 -39 Monthly Rate Underground $14.40 $14.75 $16.70 $20.00 $23.00 $20.40 $22.70 $25.45 $35.70 Per Luminaire Decorative Purchase Underground Option $19.20 $5.45 $20.85 $6.45 $24.30 $8.50 $27.45 $11.95 $25.10 $27.10 $29.85 $40.10 PURCHASE OPTION SURCHARGE A monthly surcharge per luminaire of 0.2% applies to the amount the purchase price exceeds $1,200. $8.80 $10.10 $12.85 $23.10 RESOURCE ADJUSTMENT Bills are subject to the adjustments provided for in the Fuel Clause Rider and in the Conservation Improvement Program Adjustment Rider. SURCHARGE In certain communities, bills are subject to surcharges provided for in a Surcharge Rider. LATE PAYMENT CHARGE Any unpaid balance over $10.00 is subject to a 1.5% late payment charge or $1.00, whichever is greater, after the date due. The charge may be assessed as provided for in the General Rules and Regulations, Section 3.5. OTHER PROVISIONS This schedule is also subject to provisions contained in Rules for Application of Street Lighting Rates. By: James M. Ashley Effective Date: 02 -03 -98 General Manager, Marketing and Sales Order Date: 02 -03 -98 January 28, 1998 Mr. Steve Stadler City of Hopkins 1010 1 Street South Hopkins, MN 55343 Re: Opinion of Probable Cost Excelsior Blvd. Street Lighting Hallberg Project #98 -2026 Dear Steve, • H A L L B E R G ENGINEERING We have prepared an opinion of probable cost for the Excelsior Blvd. project based on the quantities indicated in the November 21, 1977 letter from Jim Rhodes at NSP. The following are the results of our review: Contractor Costs NSP Costs Wiring and installation of all equipment $77,000 to $45,000 Cost of Fixtures and Poles* $95,000 Total $172,000 to $190 000 $226,294 Maintenance Costs ** $13,200 to $35,900 $71,040 *The cost for the fixtures and poles is approximately $1485 per fixture /pole combination (64 total). * *The Contractor Costs are based on the following assumptions: 1) The $13,200 cost assumes, changing all the ballasts once for each fixture, and group relamping of all fixtures twice during the 25 year period. 2) The $35,900 cost assumes, changing all the ballasts once for each fixture, and spot relamping of the fixtures twice during the 25 year period. * *The NSP Costs are based on the following assumptions: 1) NSP charges $6.45 per month per fixture for energy and maintenance, based on NSP's September 30, 1997 letter. 2) Energy cost is approximately $2.75 per month per fixture assuming 190 watts pc.r fixture (including ballast loss), $.04 per Kwhr, 12 hours per day (average) operation and 30 days per month. This leaves $3.70 for maintenance costs($6.45- $2.75). Mechanical /Electrical Consulting Engineers 2207 Third Street • White Bear Lake, MN 55110 • Phone (612) 429 -5655 • Fax (612) 429 -6215 • 3) Maintenance costs is approximately $3.70 per fixture times 64 fixtures times 12 months times 25 years. Our understanding is this covers all lamp replacement, labor for ballast and pole replacement (City furnishes bal,sts and poles), and repair of underground cables. lvd We confirmed our pricing by obtaining unit pricing for the installation from two electrical contractors and obtaining fixture /pole pricing from two sources. Please note the costs are for the electrical work only and do not include any costs for cutting and patching of sidewalks, roadways, etc. An additional 5 - 8% savings may be realized in a competitive bidding environment. If you have any questions please call me at 407 -2361. Sincerely, HALLBERG ENGINEE4NG, INC. Oleo es R. Penkivech, P.E. ice President/Principal • Nuv - ci - vi mu u.zu iN r R5P November 21, 1997 Steven Stadler Public Works Director City of Hopkins 1010 First Street South Hopkins, Minnesota 55343 Mr. Stadler, You requested more detail on the components involved in the Excelsior Boulevard Street Lighting Proposal that NSP submitted in September of this year. Listed below are the components and activities integral to installing the 64 King Luminaire Florentine Poles (15' smooth tapered extruded aluminum shaft), and 64 King Luminaire High Performance Acorn Fixtures (150 Watt (HPS), Type 1I). / • Install approx. 8,180 feet of #6 Triplex Cable in Gopher Pipe • Directional bore 820 feet • Dig, auger, and splice 30 splice pits • Pull cable through approx. 720 feet • Trench, back -fill and tamp approx. 6,640 feet • Install 2 Secondary Pedestals • Set 64 Screw -in Anchor Bases • Install 64 Luminaries (poles, fixtures, lamps and fuseholders) • Full Maintenance of all components within this system for 25 years Again, thank you for the opportunity to work with you and the City of Hopkins in improving your community. Please contact me at 630 -4282 to finalize or further review this offer. Regards, � H. Rhodes Community Service Manager rtin 11U, 01CGJU4wuO r. ui re, Northern States Power Company 1518 Chestnut Street North Minneapolis, MN 55403 Telephone 612/630 -4282