TRANSMITTAL LETTER FOR BOARD MEETING OF AUGUST 8, 2013
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Issue purchase order and enter into an agreement with American Appraisal Associates, Inc. for Asset Appraisal Services in an amount not to exceed $95,800.00, Account 101-25000-601170, Requisition 1364080
Body
Dear Sir:
Authorization is requested to issue a purchase order and enter into an agreement with American Appraisal Associates, Inc. (American) for professional appraisals of various District assets for the primary purpose of supporting the purchase of property insurance.
Pursuant to contract 12-RFP-21 Asset Appraisal Services, American prepared appraisals of the Stickney and the Calumet Water Reclamation Plants in 2012. This appraisal work was instrumental in establishing a working baseline of insurable property values for the District that were used in securing its first property insurance program.
Because the combined insurable values for the Stickney and the Calumet plants represent only approximately 50% of the District's total insurable values, it is highly recommended that appraisals be prepared for the remaining facilities to provide a true picture of the District's property values at risk. After an initial appraisal, updates are typically done at a 5 or 7 year interval or when there is a major change to a facility.
American is prepared to provide appraisals of the properties listed below:
Lockport Powerhouse
O'Brien Water Reclamation Plant
Egan Water Reclamation Plant
Kirie Water Reclamation Plant
Hanover Park Water Reclamation Plant
Lemont Water Reclamation Plant
TARP Mainstream Pumping Station
Racine Pumping Station
Main Office Building
Main Office Building - McMillan Pavilion
Assets to be appraised include buildings/constructed assets, machinery and equipment, site improvements, and furniture and fixtures. American will provide the District with a detailed building appraisal report containing construction, occupancy, protection, and exposure (COPE) data. Valuation will be done by process system rather than on a gross capacity basis; individual values will be assigned for major systems and equipment following the same parameters used for the appraisals of the Stickney and the Calumet WRPs completed in 2012, thus ensuring consistency across the District.
American has extensive experience in appraising water reclamation facilities and has developed a proprietary, in-house database of equipment values specific to our industry. In preparing the appraisals of the Stickney and the Calumet Water Reclamation Plants, American spent a great deal of time, over a number of months, working closely with the District and a number of its contractors to tailor American's pricing models to more closely reflect the equipment and construction costs of the District, which are quite complex and unique. As a result, American's resources combined with its understanding of the District's construction cost components uniquely positions American to do this work in a way that will bring the most value to the District.
Consistency in the valuation process and deliverables is critical to underwriters in developing a true picture of the District's property risk, both for insurance pricing and for determining what will be paid at the time of loss. Therefore, it is highly recommended that a single appraisal firm be used to set a baseline valuation.
If awarded the work in August of 2013, American commits to the completion of this work by December 31, 2013.
American Appraisal Associates, Inc. is registered and in good standing with the State of Illinois.
Inasmuch as the firm of American Appraisal Associates, Inc. possesses a high degree of experience and expertise germane to the work required, it is recommended that the Director of Procurement and Materials Management be authorized to issue a purchase order and enter into an agreement without advertising, per Section 11.4 of the Purchasing Act, in an amount not to exceed $95,800.00.
Funds are available for 2013 in Account 101-25000-601170.
Requested, Denice E. Korcal, Director of Human Resources, DEK:RJ
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for August 8, 2013