Thursday, March 21, 2013

Kenner Council Approves Controversial Generator Maintenance Contract But With Lower Cap

The Kenner City Council approved a controversial generator maintenance contract on Thursday night but added an amendment to reduce its cap and cautioned the Yenni Administration to not exceed the state cap of $10,000 in electrical work performed without a state licensed electrical contractor.

The contract, between the City and Taylor Power Systems of Richland, MS, drew criticism from residents and was deferred by the Council after Kenner resident Jack Zewe disclosed that Taylor did not have the proper licenses to be awarded the bid.
Taylor has serviced the city’s generators since 2009 in a contract that began at $14,900. That contract was increased several times and the new contract was originally capped at a not to exceed amount of $100,000, up $20,000 over the expiring contract even though no new generators were added in the past year and the city is also supplying all of the parts and materials for the maintenance.

During the life of the contract, the city has added 12 generators to the original 37 that Taylor, then known as Kossen Equipment, serviced. 27 of the city’s current 49 generators are manufactured by Cummins/MidSouth, a Kenner company, which was the second lowest bidder losing out to Taylor by a mere $87.00. Many of Kenner's generators are still under their factory warranty and Taylor does not have any Cummins factory-trained technicians on it's staff.
Taylor bid $49,900 for the work however the Yenni Administration sought to have the contract capped not at the bid amount but at $100,000 per year, an amount more than double Taylor’s bid.

In addition, Taylor included $7,500 in the bid for 100 man hours of electrical work. Council members were fearful that amount could exceed the state’s $10,000 minimum for the state license.
Taylor and Yenni countered that Taylor would sub-contract out all electrical work to a state licensed contractor which would mean that, essentially, Taylor would simply perform routine maintenance like oil changes and would be unable to perform any electrical repairs.

The generators serve as backup power to City Hall, the Police Headquarters and jail, fire stations, sewerage lift stations and other city buildings.
Last Friday, the State Licensing Board sent a letter to Mayor Yenni saying that the city could award the contract to Taylor provided that the $10,000 electrical work limit was not exceeded.

Earlier, Councilman Kent Denapolis had said that he would push for a $50,000 cap on the contract but changed the cap to $75,000 after the Yenni Administration complained that a $50,000 cap was too low particularly if there was a hurricane.
"I was not comfortable at $100,000 a year, so we compromised," Denapolis said.

Public Works Director Jose Gonzalez said that $75,000 was more than adequate.
“I feel comfortable with the $75,000 cap,” Gonzalez said.

Despite the fact that the contract cap has increased in value from $14,900 to $75,000 in less than 4 years, Mayor Yenni and CAO Mike Quigley still contend that the contract will save the city money.
"The bottom line is we're saving the city more than $10,000 a year," Quigley told the Times-Picayune.

Councilman Denapolis alluded to the Charter Change approved last year by Kenner voters to have the Council approve all contracts valued at $100,000 or more, instead of allowing the Mayor to sign contracts at will, as part of his motivation for the increased scrutiny of this contract.
“The City of Kenner (voters) told us resoundingly to look hard at these contracts.”