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Home My WebLink AboutFY 17-18 - Gas and Diesel Fuel CITY OF PALM DESERT PUBLIC WORKS STAFF REPORT REQUEST: APPROVE THE PURCHASE OF GAS AND DIESEL FUEL FOR THE CITY'S FLEET AND EQUIPMENT, AND FOR DESERT WILLOW'S MAINTENANCE VEHICLES AND EQUIPMENT FROM BECK OIL, INC., FOR FY 2017/18 IN AN AMOUNT NOT TO EXCEED $245,000 SUBMITTED BY: Mark Greenwood, P.E., Director of Public Works VENDOR: Beck Oil, Inc. 85-119 Leoco Lane Coachella, CA 92236 DATE: May 25, 2017 CONTENTS: Beck Oil, Inc., Bid Recommendation By Minute Motion, approve the purchase of gas and diesel fuel from Beck Oil, Inc., for FY 2017/18 for: 1. City's fleet and equipment in an amount not to exceed $145,000; and 2. Desert Willow Maintenance Facility in an amount not to exceed $100,000. Funds are available in General Fund Account No. 1104331-4217000, Auto Fleet—Supply Automotive Gas; and Account No. 5204195-4803100, Desert Willow Maintenance Facility. Strategic Plan Objective This is an on-going maintenance function and as such, does not directly contribute to the objectives of the Strategic Plan. Background Many of the City fleet vehicles and power equipment depend on gasoline and diesel fuels to perform daily operations for the City and Desert Willow. Since fuel prices fluctuate on a daily basis, it is not possible to lock in a fuel price for an entire year. However, there are components of the fuel price that can be locked in. Public Works requested a bid Staff Report Purchase of Gas and Diesel Fuel from Beck Oil, Inc. Page 2 of 3 May 25, 2017 price from vendors that covers delivery, profit, and other fees for vendors to supply fuel to city-owned facilities. The cost of the fuel itself is determined by OPIS, a company that accumulates price data and averages the per-gallon prices from the refineries that distribute fuel from the fuel terminal in Colton. OPIS provides updated data at least once a day depending upon market conditions. When purchasing fuel, the bid amount will be added to the OPIS average rack rate to determine the total per-gallon cost paid. A call for bids was advertised in the newspaper, and local vendors were encouraged to submit bids. On May 10, 2017, bids were opened and read aloud. Below are the results: Contractor Location Bid Score Beck Oil, Inc. Coachella, CA 10.509 The Soco Group Carlsbad, CA 10.706 The City uses three different fuels: 87 unleaded, clear diesel, and red-dyed diesel. To ensure the vendors were providing the best price for all three fuel types, the City required the vendors to provide a per-gallon price for each fuel, based upon the actual rack rate for a specific date. Those prices were then weighted based upon the City's usage. The City uses three times more unleaded fuel than diesel. Therefore, the bid score is the sum of the per-gallon cost of clear diesel, red-dyed diesel, and three times the cost of 87 unleaded gasoline. As an example, the low-bid is detailed below: Unleaded Clear Diesel Dyed Diesel OPIS Rack Rate for 8/19/16 1.6551 1.7251 1.7318 Tax, Delivery, and Profit .4976 .3789 .2189 Per Gallon Cost 2.1527 2.1004 1.9507 Weighting X 3 X 1 X 1 Weighted Price 6.4581 2.1004 1.9507 The sum of the weighted prices equals the bid score. Public Works has reviewed the bid and recommends that Council approve the purchase of fuel from Beck Oil, Inc. for Fiscal Year 2017/18. Staff Report Purchase of Gas and Diesel Fuel from Beck Oil, Inc. Page 3 of 3 May 25, 2017 Fiscal Analysis This is a necessary, on-going expense with no fiscal impact beyond the cost of the fuel. Prepared By: Dep t ead: David Reyes, Jr Mark a nwood, . , Streets Maintenance Supervisor Direct Public Worl J Moore, Director of Finance Approval: Lauri Aylaian, City Manager CITY OF PALM DESERT GASOLINE AND DIESEL FUEL BID INFORMATION BIDDER/VENDOR INFORMATION: Name: ESEG,K Ql_` i...NC, PHONE NUMBER: 76 J 3y 9 -035 J SS- 1 ( 9 L. QGQ LAwE FAX NUMBER: 76 G- 398 6,5a 8 Address: C13A( 1 t_-A , (.../q CLP36 EMAIL CONTACT: mdcQ b61)1zsa 'l ck olnc .m c Below is a table showing all the locations where the City of Palm Desert has fuel delivered. In 2016 the Corporation Yard was supplied with approximately 31,000 gallons of 87 octane unleaded gasoline with 10% ethanol (87 unleaded) and 2,000 gallons of diesel. Desert Willow was supplied with approximately 8,000 gallons of 87 unleaded and 12,000 gallons of diesel. The generators received an insignificant amount of diesel, just enough to top off the tanks about twice a year. Past use is no guarantee of future use. The vendor will supply the Corporation Yard with clear diesel, and all other locations will be supplied with red-dyed diesel. Site Site Address L 87 UNLEADED I DIESEL I Corporation Yard 74-705 42"d Avenue 2,000 gallon tank 1,000 gallon tank Desert Willow Golf Course 38-995 Desert Willow Drive 1,000 gallon tank 1,000 gallon tank Civic Center Generator 73-510 Fred Waring Drive - 1,000 gallon tank Fire Station 33 Generator 44-400 Town Center Way - 100 gallon tank Fire Station 67 Generator ^73-200 Mesa View Drive - 145 gallon tank Fire Station 71 Generator 73-995 Country Club Drive - I 1 100 gallon tank The OPIS Unbranded Rack Average Price for Colton with Cap-at-the-Rack(with CAR) cost included will be used by the City as a Base Price. In the bid form on the following page, the vendor will provide per-gallon rates that include all costs including, but not limited to delivery, profit, taxes (excluding sales tax), and other fees. For invoicing, the vendor shall show, at minimum, the OPIS Colton Unbranded Rack Average (with CAR) plus the detailed cost of taxes, fees, and other expenses, the quantity of fuel delivered, a sub-total, sales tax, and a grand total. The vendor shall include with the invoice a printout of the appropriate OPTS rack report for the date of purchase. CITY OF PALM DESERT GASOLINE AND DIESEL FUEL BID FORM Instructions: The vendor shall insert per-gallon prices in every line that is applicable. If a line item is not applicable, the line may be left blank. To calculate the Total Delivered Cost, the vendor shall add the amounts in rows 1 through 11. 87 UNLEADED CLEAR DIESEL RED-DYED DIESEL 1.EXAMPLE OPIS FUEL PRICE (WITH CAR COST) 8/19/2016 .':65'S -1:7251 1.7318 2.FEDERAL EXCISE TAX 3. FEDERAL LUST TAX . 0 0 1 .00 1 , 001 4. FEDERAL OIL SPILL FEE , 0 0 1 9 a.8 , Qo.21 /3 , 0 Q,2 P/.3 5.CALIFORNIA EXCISE TAX r c 7346 ,1lo 6.CALIFORNIA LEAD POISON 00 1 I 7.CALIFORNIA AB32 FEE , Q Qa 5'7` QQ 7/ ,00. 71 Y 8.DELIVERY 9.MARKUP/PROFIT f/, a 3 . 0] 3 Q 13 10.ENVIRONMENTAL FEE _ 11`.Jg ear !1 it;v,( '6,59 Per ,11:✓e0 59 P.or glr t/gt y 11.OTHER FEE(SPECIFY) TOTAL DELIVERED COST 1 j a , i 0 3 J Pc SA Ls 'v.0 Weighted Amount Total Delivered Cost for 87 Unleaded: a•(S a. multiply by 3 = 'L• 4/.S6 A Total Delivered Cost for Clear Diesel: 1 •1 O. multiply by 1 = a Total Delivered Cost for Red-Dyed Diesel: I . 5 multiply by 1 = 1. Total Weighted Bid Amount A+B+C: 1 i 0, Sq Signature: t'v� `v� � (Signatory acknowledges receipt of the insurance requirements, and agrees to furnish evidence of coverage)