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TO: Mayor Richard C. Irvin
FROM: David E. Schumacher, P.E.; Superintendent of Water Production
DATE: March 26, 2020
SUBJECT:
A Resolution approving a Professional Services Agreement with Layne Christensen Company for the Water Production Division.
PURPOSE:
To obtain City Council approval to enter into a new, five-year Professional Services Agreement (PSA) with Layne Christensen Company (Layne), Aurora, IL, for professional services to include, but not limited to, water well maintenance, well equipment repair, and field services. The resolution also seeks to allow for administratively-approved extensions to the term of the PSA when mutually agreed upon by the Water Production Division and Layne, and executed by the Mayor, the Mayor's designee, or the Chief Financial Officer.
BACKGROUND:
The city originally entered into a five-year PSA with Layne in 2012 via resolution R12-290. Subsequently, the PSA was extended for 36 months in 2017 with the extension expiring in April, 2020. As the City of Aurora (city) utilizes well water for a significant portion of the city's water supply, the need for professional well maintenance and repair services is necessary and on-going to ensure a plentiful supply of raw groundwater for treatment from the city's fifteen deep and six shallow water wells. To this end, Layne has provided professional water well services to the city for nearly a century, dating back to the 1930's. Layne has grown to be a global water management, construction and drilling company with its primary Illinois service and technical support center located at 721 W. Illinois Avenue, Aurora, IL, which enables Layne to provide responsive, personal, and dedicated service to the city's Water Production Division (WPD).
Layne is recognized as the sole regional factory authorized source for repair services of Flowserve-Byron Jackson well pumps and motors. The pumping equipment utilized by the WPD in the city's wells has long been standardized to the Flowserve-Byron Jackson brand. Maintaining the city/Layne customer/vendor relationship ensures that the best possible technical resources and specialized well services are received by the city and the WPD
DISCUSSION:
The financial guarantee of the PSA provides the city a 5% discount on Layne's published rates for all labor and field services, and a 10% discount on specialized well services (e.g. well televising which creates a downhole video to study or troubleshoot the well deep below the surface). In addition to the benefits already listed, there are numerous other intangible benefits which are inherent and emblematic of the professional services component of such an agreement. Many of the inherent benefits of the proposed PSA are listed on the attached document.
Experience and Reliability: Layne has access to a network of technical support professionals and equipment for enhanced customer service. Layne troubleshoots equipment problems at city well sites at no charge per the PSA. An extensive history of each well and detailed records of past well services are maintained by Layne. The WPD has the benefit of working with an experienced account manager (registered professional engineer) who provides personalized service and is the point of contact for all City of Aurora well business. For each well project, Layne provides a detailed inspection report of findings and recommendations of the pumping equipment. The most recently receive detailed inspection report is attached for reference. Layne employs forty operating engineers (Local 150) that average fifteen years of water well supply field service. Working directly with Layne under the provisions of the PSA allows well repairs to be facilitated in a timely manner. As a local business, Layne and its employees contribute tax dollars to the Aurora economy.
Financial Analysis: With the many intangible benefits already discussed, it is fair to illustrate cost information also. Attachment 1 documents Layne's performance on all City of Aurora well maintenance projects over a seven-year PSA period. Layne has outperformed their project estimates by 4% overall. With such a small variance between proposed and actual cost demonstrated by Layne, the city avoids the "bid low, sell up" pitfall that can occur when unknown well repair work is competitively bid. Attachment 2 provides a labor schedule from 2017 comparing Layne's rates to those of a primary competitor (competitor A). As shown, Layne's rates are higher than competitor A, but when applying the 5% PSA discount, the costs are very comparable with no significant variance. Lastly and easily overlooked, public bidding requires that a bid package be prepared listing specifications and drawings for the project. By virtue of the use of the PSA, it is estimated that the WPD/city saves significantly on time and potential consulting fees each time a well repair project is needed.
The WPD has an excellent working relationship with all levels of Layne personnel and believes strongly in the benefits received by virtue of the PSA with Layne since 2012. The WPD respectfully recommends a five-year PSA to the City Council for approval. A list of entities who currently have an existing PSA with Layne is attached for reference.
Annual funding for water well repair services is provided in Account No. 510-4058-511-38-31. The 2020 budget is $310,000.00. Layne is only compensated for the actual work performed per the terms of the PSA (time and material basis).
This agreement is different from a typical engineering professional agreement for design services. Layne offers an agreement that not only provides a financial benefit to the City, but it provides uniquely qualified professional engineering applied services utilizing the principles of mechanical, civil, and electrical engineering (by licensed professional engineers) in order to perform and deliver the best technical services required in this industry. It is in the City’s best interest to maintain a Professional Services Agreement with Layne to assure that these vital City assets receive the necessary, appropriate, and very best technical services when needed.
In summary, the PSA between the City and Layne is an exclusive agreement that provides the WPD access to the only factory authorized repair and maintenance services in Northern Illinois for the standardized Flowserve-Byron Jackson well pumps and motors utilized in the City’s well water assets. Although a limited number of other well water service providers are in the local market (2 - 3), none possess the factory endorsement for the subject equipment. In essence, it is the factory endorsement/authorization that Layne has that establishes their specialization for meeting the needs of the WPD..
IMPACT STATEMENT:
None.
RECOMMENDATIONS:
That the attached resolution be submitted to the City Council approving a five-year professional services agreement with Layne Christensen. It is further recommended that this matter be submitted to the Finance Committee for review and recommendation.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution approving a Professional Services Agreement with Layne Christensen Company for the Water Production Division
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City owns and operates deep and shallow water production wells which require maintenance services to keep them operational; and
WHEREAS, Layne Christensen Company has satisfactorily provided these maintenance services to the City for many years; and
WHEREAS, the City would receive cost reduction and professional benefits by entering into a Professional Services Agreement with Layne Christensen Company; and
WHEREAS, the Professional Services Agreement shall be for a five-year term, commencing on the date of this resolution, with the option to administratively extend based upon mutual agreement between the Water Production Division and Layne Christensen, and said extension to be executed by the Mayor, Mayor's Designee, or Chief Financial Officer; and
WHEREAS, funds are provided annually for water well repair services in the City Budget in Account No. 510-4058-511-38-31;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: hereby authorizes execution by the Mayor of a Professional Services Agreement for a term of five (5) years with Layne Christensen Company for water well repair services on an as needed basis for the Water Production Division.