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<br />6.1J <br />The purchase agreement will cover a three-year period, in individual fiscal year increments. Page 2 <br />The $175,433.00 not-to-exceed purchase amount reflects the materials purchase for the <br />first year. The total not-to-exceed purchase amount will be amended each fiscal year <br />based on Council-approved budgets. <br /> <br />The agreement provides for up to a 3% increase in unit bid prices based on the current <br />one-year average of the consumer price index for San Francisco/San Jose/Oakland. <br />Additionally, because oil prices have been fluctuating so greatly, the agreement contains a <br />provision for adjusting the unit bid prices based on the California Statewide Paving Asphalt <br />Price Index. The California Statewide Paving Asphalt Price Index is determined each <br />month on the first business day of the month by the California Department of <br />Transportation. If the index increases or decreases by greater than 10% in a one-month <br />period, unit prices can be adjusted. <br /> <br />Alternatives <br />The alternatives are to either reject the bids and re-bid the project or not perform the <br />paving work. Staff does not believe the City will receive a more favorable price by re- <br />bidding. The paving work is essential for maintaining the quality of the City's street <br />infrastructu re. <br /> <br />Fiscal Impact <br />The total award amount is $175,433.00. Funds in the amount of $70,284.00 have been <br />approved in the 2005-2006 Public Works Services Streets and Parking Lots Maintenance <br />budget for asphalt materials purchase. Only $28,741 of the $70,284 is available as <br />$41,453 has already been expended during this fiscal year. <br /> <br />The balance of $146,692 is available in the adopted 2005-2006 Roadway Maintenance <br />System (RMS) Capital Improvement Program (CIP) budget for materials used for prep work <br />ahead of cape seal, slurry seal, and overlay projects. The majority of prep work for these <br />capital projects is performed by City crews. <br /> <br />Staff will bring annual amendments to the agreement for City Council approval for the next <br />two fiscal years based on the funds available in adopted Public Works Services <br />maintenance and RMS CIP budgets. <br /> <br /> <br />~1L- <br /> <br />0 aon Mann <br />Public Works Superintendent <br /> <br />Attachments <br />Agreement <br /> <br />Councilraportlasphalt purchase award <br /> <br />Page 2 of 2 <br />