TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Steve S. Charelian, Finance Director
Gwen Eng, Purchasing Manager
SUBJECT:Title
Resolution No. 18-0159 Awarding Bid #1185-19 to Merrimac Energy Group for a Three-Year Bulk Fuel Contract with an Estimated Value of $290,000 (Finance Director Charelian).
ADOPT RESOLUTION NO. 18-0159
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 18-0159 approving a three-year contract with Merrimac Energy Group to provide fuel with an estimated value of $290,000 and authorize the City Manager to extend the term of the contract for two additional one-year periods if deemed in the City's best interest.
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FISCAL IMPLICATIONS:
Sufficient funds are available in the Public Works budget for on-going fuel purchases. Based on today's fuel prices, the City's annual cost to purchase gasoline and diesel fuel with taxes and fees is estimated to be $290,000 annually.
BACKGROUND:
The City operates a fueling station located at the City Yard. For the past year, the City has successfully procured automotive fuel through a bulk fuel contract with fixed indexed pricing.
The industry standard index, Oil Price Information Service (OPIS), publishes a daily index of fuel prices. With this pricing tool, the City and a supplier enter into a contract at a fixed markup over the daily Oil Price Information Service average published prices over the course of the agreement.
DISCUSSION:
The City's most recent contract has expired. As a result, staff solicited bids utilizing the City's website, list of past respondents and BidSync, a public bid notification board, and received four responses. The City specified regular (87 octane) and mid-grade (89 octane) unleaded gasoline and 10% biodiesel. Biodiesel is one of the methods used by the City to reduce our carbon footprint.
The bid compa...
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