Council runs up against time-sensitive contracts

While City Council members requested more time to better understand two contracts with city departments Thursday, city staff argued that these agreements were time-sensitive and urged members to avoid further delays.

The first item asked Council to approve a contract allowing Austin Energy to service its turbines at the city’s Sand Hill Energy Center in addition to purchasing a backup turbine. But Council Member Sheri Gallo said the contract amount of $14 million unnerved her, and she wanted more time to understand the need for such large funds.

Austin Energy’s General Manager Larry Weis said waiting much longer to approve this contract was not a good idea – neither for the smooth operation of the city’s utility, nor because there would be more Austin Energy contracts down the line. Delaying this one, he said, would mean holding out on the approval of future contracts.

“We have run the economics on this, and I would highly encourage Council to not delay this and move this forward,” said Weis. “We will have several multimillion-dollar power issues that we will be bringing you over a period of time. I would not say this is insignificant, but this is not a big one.”

Mayor Pro Tem Kathie Tovo proposed delaying any decision on the contract until the Austin Energy meeting next week. A Council meeting follows, so members would be able to reach a final decision then.

“A week is fine,” said Weis. A spokesperson for Austin Energy told the Austin Monitor that while there is no set deadline on approving this contract, ideally it would be done before the beginning of summer – which, more than other seasons, taxes the city’s energy system.

Weis stressed this idea Thursday.

“I think Council knows what happens when we have a critical machine that goes out,” Weis said. “We have an electric system that we have to run.”

On a vote of 10-0, with Council Member Delia Garza absent, Council approved pushing this item to next week’s agenda.

Council expressed similar apprehension regarding a second contract Thursday, but in this case, staff said it could not wait any longer for Council to debate approval.

Staff from Austin’s Fleet Services Department said it hoped to receive an additional $149,000 on top of a $1.05 million three-year contract to fund city rental vehicles from Longhorn Car-Truck Rentals.

Fleet Officer Gerry Calk said this additional amount would cover vans needed for the city’s youth summer program, run by the Parks and Recreation Department.

“This is very time-sensitive,” said Calk. He explained that money from the department’s original contract, approved by Council in 2012, would run out at the end of May. The city needed this money for the department to operate until the current contract’s expiration at the end of August, when it would come to Council with a new one.

Council Member Ellen Troxclair said she had trouble understanding why the original contract amount could not carry the cost of city vehicle rentals through the end of the term.

Calk explained that Council members in 2012 had reduced the original amount requested by $224,000.

“Had that $224,000 remained in there, we would have had sufficient funding under the contract, and we wouldn’t be here to get an amendment today,” Calk said.

Council members voted to approve the additional funds with a vote of 8-2, with Council members Ora Houston and Don Zimmerman voting in opposition. Garza was absent.