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TO:Mayor and City Council <br />FROM: Ron Moorse, City Administrator <br />DATE:January 21, 1993 <br />SUBJECT: City Facilities Fuel System Cancellation Costs <br />Attachment:A. Initial Listing of Cancellation Costs Related <br />to the Underground Fuel Storage System <br />Dated 10/28/92 <br />B. Updated Listing of Cancellation Costs Dated <br />12/8/9 2 <br />C. Letter From Pump and Meter Service, Inc. Dated <br />12/14/92 Proposing a 50% Reduction In che <br />Cancellation Costs <br />Si?;;:; •“ f -'-■prvic** Inc then proposed to reduce the remaining cancellation <br />cosrby' 50% for a totaf of $2,182. I have advised Pump and Meter <br />Service that the Council approved their above ground tctnk propos <br />on the condition that the cancellation costs be eliminated. <br />Pumo and Meter Service, Inc. has indicated they have a significant <br />amoSn? of tiL and expense invested in the under ground tank <br />nroiect and they need to recover a portion of those costs. <br />Although Pump and Meter has incurred some expenses they also wete <br />auowef to Lbmrt a proposal for an above ground <br />w^^hout having to compete with other vendors. It is difficult to <br />determine whether their profit margin on <br />sufficient to cover the costs incurred on the below ground fuel <br />system. <br />If the city believes the price for the aboveground syscem i® f <br />oL it is reasonable to pay some portion of the <br />However the citv should not pay for costs not directly <br />oTrll.6 costs. A ov«\ta*l co«^!breakdown, and assuming 35% of the nouriy races <br />is as follows: <br />Drafting time 10 hours • $32.50/hour $ <br />Engineering service 0 hours • $65.00/hour ^30!So <br />Permit tees 10.00 <br />AdminiHtrati«^overhead *10 hours • $26.65/hour <br />Material restocking <br />TOTAL $1,715.00 <br />J