TO:
Honorable Mayor Powell and Members of the City Council
THROUGH:
David N. Carmany, City Manager
FROM:
Bruce Moe, Finance Director
Gwen Eng, General Services Manager
SUBJECT: Title
Ratification of Motor Fuel Purchase from Merrimac Energy Group in the Amount of $29,483.84
APPROVE
Body
____________________________________________________________________
RECOMMENDATION:
Staff recommends that the City Council:
a) Waive formal bidding per Municipal Code Section 2.36.140 (waivers); and
b) Ratify the purchase of fuel from Merrimac Energy Group in the amount of $29,483.84.
FISCAL IMPLICATIONS:
Sufficient funds are available in the Public Works fleet budget for this purchase.
DISCUSSION:
The City operates a fueling station located at the City Yard. Our most recent contract for motor fuels was not renewed by the vendor because they wished to renegotiate the pricing structure. Additionally, because of the instability in wholesale fuel markets, few vendors are willing to enter into a contract, even with pricing indexed to market movements. Staff has determined that same day bidding and ordering (making formal bidding impractical) is the best method to secure deliveries.
On August 29, 2012, staff purchased motor fuels. The informal bid process resulted in four responses. The comparison in Attachment "A" shows the aggregate price, including sales tax and shipping.
Merrimac Energy Group was the lowest bidder for this requirement. Because the total purchase exceeded the formal bid limit of $20,000, staff is now seeking City Council ratification for this expenditure, as required by Municipal Code Section 2.36.140 (waivers).
Additional fuel purchases will be made approximately every 30-45 days, and if the purchase exceeds $20,000, it will be presented for City Council ratification.
Attachment:
1. Gasoline and Biodiesel Fuel Comparison