Title
MOTION TO APPROVE ADDENDUM NO. 1 TO ASSIGN THE MANAGEMENT SERVICES AGREEMENT FROM FLORIDA HYDROCORP INC. TO HYDROCORP OF FLORIDA, LLC FOR THE CITY'S WATER SYSTEM CROSS-CONNECTION CONTROL AND BACKFLOW PREVENTER TESTING PROGRAM.
Summary Explanation and Background
SUMMARY EXPLANATION AND BACKGROUND:
1. On March 15, 2023 the City Commission approved an Agreement with Florida HydroCorp, Inc. (HCI) to provide management services for the City's Cross Connection Control Program (CCCP), which included testing of backflow preventers. The Agreement ended on September 12, 2023.
2. As a result, on November 1, 2023, the City Commission approved entering into a new Agreement with HCI to provide management services for the City's water system CCCP, utilizing pricing established by the City of Cape Coral Solicitation BPW2336MM, in an annual amount not to exceed $357,495, pursuant to Section 35.18(C)(5) of the City’s Code of Ordinances. The Agreement expires on May 18, 2028 and provides for up to one, one-year renewal.
3. Section 50.40 of the City’s Code of Ordinances establishes the City’s water system Cross Connection Control Program (CCCP). This is a program to protect the public water system against contamination or pollution via backflow from a premises or private property. This program is required under the provisions of Section 62-555.360 Florida Administrative Code (FAC).
4. Included in that program is the requirement that all customers, at their own expense, shall annually test, and maintain backflow prevention assemblies (this does not include single family residences). FAC 62-555.360 holds the water purveyor (the City in this case) responsible for ensuring that this testing and maintenance is completed.
5. The City’s past practice for ensuring that the required testing and maintenance is completed, via its contract utilities operator Jacobs/OMI, was to send notices to each customer reminding them of this requirement. Despite multiple notices, however, which ultimately includes a notice of potential shut-off of water service, the overall compliance rate is approximately 15 percent. At that rate, the City could have been at risk of being in violation of the FAC.
6. To resolve this issue, the City Commission adopted an amendment to Chapter 50 of the City Code of Ordinances that allows Utilities Department Staff to provide for the above testing and maintenance and to charge Utilities customers for the cost of said testing and maintenance.
7. The Agreement provides for assignment of rights and obligations with written consent of both parties.
8. The City attempted to issue timely payment to HCI via the City’s online vendor onboarding and vendor payment verification system, PaymentWorks which is utilized by the Finance Department's Accounts Payable Division.
9. During this process, the City learned that the vendor name listed in the PaymentWorks system and on their invoices did not match the Vendor name identified in the Agreement.
10. City Staff diligently attempted to correct the issue directly with HCI.
11. HCI’s agents advised they could not amend their vendor name in the PaymentWorks system, as it would affect their other customers that are also using the PaymentWorks system.
12. HCI’s agents further represented that HCI is no longer an operational entity, and has not operated as HCI since 2021.
13. HCI remains an active company with the Florida Department of Corporations.
14. Instead, HCI’s agents stated that the entity providing services to the City as described in the Agreement, is operating as HydroCorp of Florida, LLC the name listed in the PaymentWorks system.
15. HydroCorp of Florida LLC, as represented by its agents, and as registered with the Florida Department of Corporations, is comprised of the same officers and agents as HCI.
16. The City’s payment obligations under the Agreement are outstanding due to the Vendor’s name discrepancy.
17. Due to the City’s need for continuous service of the water system, and to make payments that are outstanding for services already performed, staff is requesting that the Commission approve the attached Addendum to the Agreement, assigning rights and obligations from HCI to HydroCorp of Florida LLC, and keeping all other terms of the original Agreement intact.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: The contract's annual not-to-exceed amount shall remain $357,495. ($495 annual fee paid by City. The additional expenses would be reimbursed to the City by automatically adding testing fee to each affected customer's utility bill as a "backflow testing fee")
b) Amount budgeted for this item in Account No: Funds are available in account # 471-533-6032-534990-0000-000-0000 (Other Svc)
c) Source of funding for difference, if not fully budgeted: Not Applicable.
d) 5 year projection of the operational cost of the project: The Agreement expires on May 18, 2028 and provides for up to one, one-year renewal.
|
|
FY25-26 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
Revenues |
$357,000 |
$357,000 |
$357,000 |
|
|
|
Expenditures |
$357,495 |
$357,495 |
$357,495 |
|
|
|
Net Cost |
$495 |
$495 |
$495 |
|
|
e) Detail of additional staff requirements: Not Applicable
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Not Applicable.
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? Not Applicable.