TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: Utility Audit Contract Award
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider approving contract award for utility auditing consulting services to Eric Ryan Corporation (ERC) for up to $619,200 with three one-year options for the review and audit of utility expenses by service providers, specifically to recoup refunds from billing errors and to recommend cost-savings measures through opportunities to lower utility rates and improve energy consumption efficiencies.
Body
BUDGETARY/FISCAL IMPACT:
The purpose of issuing this contract is to reduce utility expenses for the District and recoup funds from overcharges or billing errors by the utilities with the intent of achieving a net negative or revenue-generating fiscal impact. Process improvements will also be identified. The contract itself is cost neutral for two reasons: the primary scope obligates the District to pay the contractor 20% of refunds received by the District based on their work; the secondary scope includes optional fee-for-service tasks the District can elect to pursue at its discretion. The first year of the contract will look for surcharges as far back as 2015 and could reasonably be estimated to result in up to $3 million in refunds, of which the District would retain 80% ($2.3 million). The three one-year options will allow the District to continue to audit for reduced utility costs. The optional fee-for-service tasks include in-depth analysis of utility usage and optimization. The estimated maximum cost (payout) for the first year is $619,200. The three option years are estimated to cost up to $140,200, $125,700, and $111,200 respectively. This gives an estimated maximum four-year contract cost of $996,267.
BACKGROUND/RATIONALE:
The District pays over $2.9 million in utility bills per year, as shown by the list of utility expenses for FY 2016-2017 below. While staff does not have any current knowl...
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