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Recommendation to authorize City Manager to execute an amendment to Contract No. 31166 with American Eurocopter LLC (AEC) to increase the contract amount by $200,963 for a total contract amount of $441,362 for additional work for service repairs to the Police Department's helicopter, with the option to add expenditures up to
5 percent (or $22,068) above the contract amount, if necessary and if reimbursable under the insurance claim, and if funds are available. (Citywide)
DISCUSSION
On December 11, 2008, the fire suppression alarm system .at the City's leased aircraft hangar at Long Beach Fire Department Headquarters located at 3205 Lakewood Boulevard, Long Beach, CA was accidentally activated. As a result of this accident, the suppression system dispersed CHEMGUARD C2 fire suppression foam into the 120,000 square foot hangar. One of the City's American Eurocopter EC-130 SN 3560, Unit 1908, was engulfed with fire retardant foam, completely immersing the unit and its interior components. As a result of this accident, the unit received significant damage. The City's aircraft cannot be placed back into service until an extensive and complete teardown inspection of the turbine engine and all rotating components is made.
On June 9, 2009, the City Council authorized the City Manager to enter into a contract with American Eurocopter LLC (AEC) in the amount of $240,399 to perform the teardown, inspection and repair of the helicopter to manufacturer and Federal Aviation Administration (FAA) standards. This contract was supported in full by the City's insurance policy. AEC has completed the basic tear down inspection of the helicopter and, upon disassembly, found hidden damage that could not be assessed by the original inspection. Thus, the City is requesting City Council to increase the contract in the amount of $200,963 for additional parts, components and repair work that need to be performed in order for the helicopter to achieve recertification and returned to service.
As a result, the amount covered by the insurance claim has been increased to $364,122 to overhaul the engine, replace parts, and make the required repairs associated with the foam damage. The City's insurer is underwriting these costs and is working with the City's Department of Human Resources, Risk Management, to assure all required documents are in compliance for timely insurance reimbursement. The estimated time for the reimbursement is approximately six to nine months from the date of completion of the helicopter repairs.
When an engine requires complete teardown and parts and repairs are made, the engine is required to be recertified for air worthiness that requires certain parts replacement and repair work to the aircraft that are unrelated to the foam incident. As stated in the June 9, 2009 Council letter (attached), the estimated cost of $77,240, for this aspect of the work will be covered under the Police Department's FY 10 budget for helicopter repairs.
This matter was reviewed by Deputy City Attorney Gary Anderson on November 23, 2009, and Budget and Performance Management Bureau Manager David Wodynski on December 16, 2009.
TIMING CONSIDERATIONS
City Council action on this matter is requested on January 5, 2010, in order to resume and complete the necessary repairs in accordance with FAA regulations to ensure that the City's helicopter is safely placed back in service so it may resume its air support to the Police Department.
FISCAL IMPACT
Sufficient appropriation exists in the Fleet Services Fund (IS 386) in the Department of Public Works (PW) to pay for the full contracted services of $441,362. However, an appropriation increase in the amount of $364,122 is requested in the General Fund (GP) in the Police Department (PO) to reimburse the Fleet Services Bureau for payments to Eurocopter for this work. The General Fund costs for foam-related damage will be offset by the reimbursement from the City's insurance company, which will seek reimbursement from the responsible party's insurance company once the claim has been settled. The remaining $77,240 cost is for the normal wear and tear and replacement components of the recertification of the helicopter, not related to the foam incident, and are included in the Police Department's FY 10 adopted budget.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
LORI ANN FARRELL
DIRECTOR OF FINANCIAL MANAGEMENT/CFO
MICHAEL P. CONWAY
DIRECTOR OF PUBLIC WORKS
BILLY B. QUACH
CHIEF OF POLICE
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PATRICK H. WEST |
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CITY MANAGER |