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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />DECEMBER 19, 2011 <br />TITLE: <br />CONTRACT AMENDMENT AND <br />AWARD TO G.P. RESOURCES FOR <br />UNLEADED FUEL AND OIL <br />PRODUCTS (SPEC. NO. 11-064) <br />CITY MANAGER <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />? As Recommended <br />? As Amended <br />? Ordinance on 1st Reading <br />? Ordinance on 2nd Reading <br />? Implementing Resolution <br />? Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />RECOMMENDED ACTION <br />1. Amend the contract with Maxum West dba G.P. Resources for unleaded fuel by $130,000 <br />for a total amount not to exceed $1,220,000. <br />2. Award a contract with Maxum West dba G.P. Resources, Inc. for the purchase of <br />unleaded fuel and oil products for a six month period in an amount not to exceed <br />$625,000. <br />DISCUSSION <br />Facilities, Fleet and Central Stores (FMCS) Division of the Finance and Management Services <br />Agency provides fuel for all City vehicles, including gasoline and diesel-operated vehicles. The <br />fuel is stored in underground tanks located in the Corporate Yard, the Police facility, and Fire <br />Station No. 1, 4, 5 and 6. 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 applicable taxes. <br />The City has established a program to evaluate the use of alternative fuels to reduce <br />consumption of gasoline and diesel fuel. Currently, all 10 of the City's street sweepers are <br />fueled with compressed natural gas (CNG). Since the 05/06 fiscal year, 27 gasoline, electric, <br />hybrid and hydrogen vehicles have been added to the City fleet. Furthermore FMCS has <br />established a 5-year alternative energy plan to convert 75 - 85% percent of the fleet to <br />alternative energy within the next five-years. The plan will vastly reduce fuel cost, carbon <br />footprint, and the use of renewable energy in efforts of reducing the dependency on foreign oil. <br />Oil prices have been volatile over the past several years and G.P. Resources, Inc. projects the <br />price of unleaded petroleum to continue a steady climb. To date, the rising cost of fuel has <br />increased 20 percent from January 2011 to December 2011. With higher than anticipated <br />unleaded fuel rates, staff recommends amending the contract beyond the 10 percent change <br />notice already approved for a contract total of $1,220,000 for payment of invoices, and provide <br />uninterrupted fuel service until the new contract term becomes effective on January 1, 2012 (six <br />month period). <br />22E-1