22C - DIESEL FUEL - Laserfiche WebLink

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 2, 2009 TITLE: CONTRACT RENEWAL FOR DIESEL FUEL (SPEC. NO. 08-004) vk-`z CITY ANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 151 Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For CONTINUED TO FILE NUMBER Renew the contract with SC Fuels for the purchase of diesel fuel and petroleum products for a one-year period in an annual amount not to exceed $325,000. DISCUSSION The Fleet Division of the Finance and Management Services Agency provides diesel fuel at the City's Corporate Yard for all City diesel-operated vehicles. In addition to the underground fuel storage tanks at the Corporate Yard, tanks are located at the Police facility, and Fire Stations No. 1, 4, 5 and 6. The City has established a program to move its fleet to alternative fuels, where applicable. Additionally, the South Coast Air Quality Management District (AQMD) Ruling 1186.1 and 1196 requires the City to move from diesel engine vehicles to gasoline or alternative-fuel engines in the heavy-duty category. The 11 street sweepers are all CNG units. However, the City's fleet still consists of diesel-powered vehicles, including fire engines and diesel powered back-up generators for emergency operations. On February 4, 2008, the City Council awarded a contract to SC Fuels, for a one-year period with provision for four one-year renewals. The vendor has performed satisfactorily during the past contract period and has agreed to renew the contract at the same rate structure. In the last year, the City experienced a 67 percent gyration in the cost of diesel in the volatile fuel market, currently paying the same cost as in early 2008. However, the City's consumption has decreased by 1.85 percent, enabling the cost of the renewal to remain at the same level as the prior year, $325,000. Staff recommends the first renewal of the contract. 22C-1