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Item Coversheet Page 1 of 2 <br /> � <br /> Financial Management <br /> DATE: 5/9/2016 <br /> MEMO: Letter to the Decatur City Council Financial Managment Department#2016-07 <br /> TO: Honorable Mayor Julie Moore Wolfe <br /> Members of the City Council <br /> FROM: Tim Gleason,City Manager <br /> Gregg D.Zientara,City Treasurer&Director of Finance <br /> SUBJECT: Electricity Supply Contract <br /> SUMMARY RECOMMENDATION: <br /> It is recommended that the City Council approve the attached resolution, which authorizes the City Manager to award an <br /> Electricity Supply Services contract. This resolution will be presented to Council at the May 16�'meeting. <br /> BACKGROUND: The City purchases electricity service to"light up"city owned buildings,traffic signal lights and lampposts <br /> throughout the city.Currently,the city operates with three(3)electricity supply contracts,all with Homefield Energy.The three <br /> (3)contracts are the result of prior decisions of past city administrations in setting up contractual anangements.The current <br /> contracts expire in October of 2016. <br /> With this contract award,the City will consolidate electricity supply into a single contract. <br /> Requests far Price Proposal were sent to thirteen(13)electricity supply companies.Three(3)suppliers expressed interest in the <br /> City business whereby the City will receive electricity supply price bids from the three(3)suppliers,including,Constellation <br /> Energy Services,Inc.Illinois Power Marketing d/b/a Homefield Energy(current supplier),and MidAmerican Energy Services, <br /> LLC(current natural gas supplier).These three suppliers are the largest electricity supply companies in the United States. <br /> Electricity supply contracts are typically of one to three year duration.Time length variation is generally buyer driven due to buyer <br /> sentiments regarding future price expectations.Longer term contracts generally coincide with the expectation for rising electricity <br /> pricing,where shorter contracts generally result from the expectation of declining prices. <br /> Electricity is a commodity and therefore follows the price structure of the commodity market.Price quotations have a short life, <br /> price quotes must be acted upon before the close of business on the day of the release of the price quote. <br /> The three(3)suppliers,noted above,are asked to deliver a price quotation to the City Treasurer on Monday May 16,2016 before <br /> 1:00 pm CST covering 1,2 and 3 year terms.The City Treasurer will review the price quotations with the City energy advisor, <br /> CQI,Associates,Principal Richard Anderson,where the electricity supply bid will be chosen and presented to the City Manager <br /> for his consent.Upon consent of the City Manager,the City Treasurer will notify the selected supplier to lock the price pending <br /> final contract approval by the City Council. <br /> Upon receipt of the price bids,the City will select a vendor and present the vendor selection to the City Council in Resolution <br /> authorizing the City Manager to execute a contract with the selected vendor. <br /> Terms of the contract and contract price will be available at the Council meeting. <br /> POTENTIAL OBJECTIONS: There are no know objections to this resolution. <br /> INPUT FROM OTHER SOURCES: CQI Associates was engaged in energy advisory services for the RFP and selection <br /> process. <br /> STAFF REFERENCE: Gregg D.Zientara,City Treasurer&Director of Finance <br /> BUDGET/TIME IMPLICATIONS: None. <br /> https://decatur.novusagenda.com/AgendaWeb/CoverSheet.aspx?ItemID=586 5/13/2016 <br />