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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />AUGUST 20, 2007 <br />TITLE: <br />CONTRACT RENEWAL FOR <br />UNLEADED FUEL <br />(SPEC. NO. 06-066) <br />CI ANAGE <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />^ As Recommended <br />^ As Amended <br />^ Ordinance on 1~~ Reading <br />^ Ordinance on 2n° Reading <br />^ Implementing Resolution <br />^ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Renew the contract with G.P. Resources, Inc., for the purchase of unleaded <br />fuel for a one-year period in an annual amount not to exceed $1,320,000. <br />DISCUSSION <br />The Fleet Division of the Finance and Management Services Agency provides <br />diesel and unleaded fuel for all City gasoline and diesel operated <br />vehicles. The fuel is stored in underground tanks located at the Corporate <br />Yard, the Police facility, and Fire Stations No. 1, 4, 5 and 6. <br />Pricing for the City's fuel purchases are based upon daily benchmarks <br />published by the Oil Price Information Service (OPIS) plus fixed fees and <br />applicable taxes. Prices in the volatile petroleum market have increased <br />58 percent since January 2007 and G.P. Resources, Inc., projects the basic <br />price of unleaded gasoline to follow the same pattern through the current <br />fiscal year. <br />As a result of the volatile petroleum market, the City has established a <br />program to evaluate the use of alternative fuels where applicable to reduce <br />consumption of gasoline and diesel fuel. Currently, ten of the City's <br />eleven street sweepers are fueled with compressed natural gas (CNG). Since <br />the 05/06 fiscal year, 12 gasoline/electric hybrid vehicles have been added <br />to the City fleet. In addition, the City is testing hydrogen as an <br />alternative fuel and currently operates five hydrogenfelectric hybrid <br />vehicles. <br />On June 5, 2006, Th <br />Inc., for a one-year <br />vendor has performed <br />agreed to renew the <br />recommends the first <br />e City Council awarded a contract to G.P. Resources, <br />period with provision for four, one-year renewals. The <br />satisfactorily during the past contract period and has <br />contract without an increase in base pricing. Staff <br />renewal of the contract. <br />22E-1 <br />