TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY SWAN, COMMUNITY SERVICES DIRECTOR
DATE: MARCH 10, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
AUTHORIZATION TO AMEND THE EXISTING AGREEMENT WITH FIRST CLASS HEATING AND AIR CONDITIONING, INC. TO INCREASE COMPENSATION FOR HEATING, VENTILATION, AND AIR CONDITIONING MAINTENANCE SERVICES (FUNDING SOURCE: GENERAL FUND)
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SUMMARY
On July 25, 2023, the City Council awarded a contract to First Class Heating and Air Conditioning, Inc. for heating, ventilation, and air conditioning (HVAC) maintenance services in the amount of $100,700 annually for three years. First Class is responsible for all HVAC preventive maintenance services, along with emergency callouts and routine maintenance.
Staff anticipates an additional $60,000 will be necessary for First Class to perform routine and preventive maintenance through the end of the fiscal year. To account for increased maintenance costs, staff recommends amending the existing agreement by $60,000, which will bring the total not-to-exceed contract amount to $160,700 for 2025-26.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Authorize the City Manager to execute an amendment to the existing agreement with First Class Heating and Air Conditioning, Inc. increasing compensation by $60,000, for a total not-to-exceed contract amount of $160,700; and
B. Appropriate $60,000 from the unassigned General Fund balance to fully fund the agreement.
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ALTERNATIVE TO RECOMMENDATION
In addition to the recommendation, there is the following alternative:
• Request additional information from staff.
FINANCIAL REVIEW
The Community Services Department budget includes funding for HVAC maintenance services. Staff recommends amending the current agreement, increasing the not-to-exceed contact amount from $100,700 to $160,700 to reflect anticipated additional costs for HVAC maintenance and repair services. The additional funding for HVAC maintenance services is recommended to be appropriated from the unassigned General Fund balance.
The staff cost to prepare this report and administer this contract is estimated at $958 and is included in the operating budget of the Community Services Department.
ANALYSIS
The HVAC maintenance services contract includes routine preventive maintenance, on-call services, and emergency response to address issues immediately and return the City to normal operations. There are 44 small City-owned HVAC units, three evaporative coolers, and five large City-owned HVAC units that require quarterly maintenance. Preventive maintenance includes but is not limited to cleaning, adjusting temperature controls, changing filters, lubricating, and inspection/calibration of heating controls and thermostats. Safety controls are also checked during preventive maintenance. Beyond routine maintenance, First Class Heating and Air Conditioning, Inc. provides on-call and emergency services to address unforeseen repairs or when units are not operational.
On-call and emergency services are billed as extra work on an hourly basis. These repair services include but are not limited to broken or non-operational fans, coils, controllers, compressors, condensers, chillers, and exhaust motors. First Class HVAC has responded and made several large repairs this fiscal year, including repair and replacement of two of the three evaporative coolers and compressor replacements of two of the older HVAC units.
Based upon increased maintenance calls and troubleshooting of the systems, staff recommends amending the current agreement to increase the not-to-exceed amount to $160,700. The billing structure for this agreement sets fixed pricing for preventive maintenance services, and repair services are billed at an approved hourly rate. Staff must review and approve all proposed repairs prior to work being completed. Although the not-to-exceed amount would be increased to $160,700, First Class will only be compensated for the approved work they complete.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Sustainable City Plan, Economic Sustainability Plan, General Plan, and the 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Jeremy Swan
Community Services Director