SR-1000-001-07 (2)
TRANS:MAINT:JC:PB\F:TRANS\ADMIN\COUNCIL\WORD\ARCOFUEL
Council Meeting: January 11, 2000 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Authorize the City Manager to Negotiate and Execute a Sole
Source Contract with ARCO Products Company to Furnish and
Deliver ARCO EC-Diesel Test Fuel.
Introduction
This report recommends that the City Manager be authorized to execute a one-
year sole-source contract with ARCO Products Company (ARCO) to furnish and
deliver ARCO EC-Diesel (EC-D) low sulfur diesel test fuel. The EC-D fuel will be
used in 20 of the Transportation Department’s diesel buses to test and verify
reductions in particulate and nitrogen oxide emissions.
Background
The Transportation Department operates 166 diesel buses. In keeping with the
City’s policy to purchase alternatively fueled vehicles, in November 1999, the City
Council approved the first purchase of 37 low emission, liquefied natural gas
(LNG) powered 40-foot buses. These buses are scheduled to arrive the first
quarter of 2001. Until the entire diesel bus fleet has been replaced with
alternatively fueled buses, diesel buses must be used, yet staff will endeavor to
make use of technological advances to ensure buses produce the lowest level of
emissions possible.
1
Arco has developed a decisively cleaner diesel fuel called EC Diesel (EC-D),
which has resulted in a 15% reduction in particulate matter emissions and a 5%
reduction in nitrogen oxide emissions, without reducing fuel economy. This low
sulfur fuel has a sulfur content level of less than 10 parts per million (PPM), as
compared to the sulfur content of the diesel fuel currently allowed in California
(CARB diesel), which has a sulfur content almost 12-times greater, or 120 PPM.
According to studies and air quality regulators, the lower the sulfur content the
greater the benefit in reducing air pollution and harmful emissions.
ARCO has requested that the Big Blue Bus participate in a year-long
demonstration program of the EC-D fuel using 20 of our buses. Ten buses will
use the EC-D fuel only, and ten will use the EC-D diesel fuel and be equipped
with advanced technology mufflers called Passive Regenerating Particulate
Filters (DPF). These mufflers are expected to reduce emissions even farther, to
a level equivalent to that of natural gas powered buses. The manufacturers of
the DPF after-treatment devices will furnish those devices to ARCO, who will
provide them to the Big Blue Bus at no cost to the City.
ARCO will furnish the fuel to the City at the same cost we pay for our regular
CARB diesel fuel. ARCO will also furnish the fuel tanks for the storage of the
fuel. It is estimated that a maximum of 257,000 gallons of EC-D diesel will be
needed to operate the 20 buses for the one-year test period.
2
Ordinance Number 1743 (CCS), Section 5, paragraph 2.24.080 (1) of the Santa
Monica Municipal Code allows exception to competitive bidding when products
are purchased from a sole provider.
Budget/Financial Impact
The total cost to procure the EC-D fuel is estimated to be $257,000. Fiscal Year
1999-2000 appropriation authority for this purchase exists in the Transportation
Department fuel account number 41654.522911. No additional funds are
required to purchase the EC-D fuel. As the test fuel is used, it will be expensed
against available FY 1999-2000 appropriation authority. For the period of July 1,
2000 through June 30, 2001, appropriation authority will be requested in the FY
2000-2001 budget.
Recommendation
City staff recommends that the City Council authorize the City Manager to
negotiate and execute a contract with ARCO Products Company to furnish and
deliver 257,000 gallons of ARCO EC-D diesel test fuel at a cost not to exceed
$257,000.
Prepared by: John Catoe, Director of Transportation
Pat Butters, Maintenance Manager
3