SR-11-B (7)
.
fftJlJ-- <<J3
.
SH.1i.: HED : mh
Councll Meetl~g:
9/25/84
Santa Mon~ca, Californ~a
TO:
~Iayor and Cl ty Councll
11-.8
SEP H .,
FRO~'I :
Clty Staff
SUBJEC~: Authorlzatlon for Clty to operate alrcraft fuellng
fac~llty at Santa Honlca Alrport on ~mergency
basls and related appropriations from the Alrport
Fund
Introductlon
Thl~ repcrt s~wmarizes varlOUS actlons related to alrcraft fuellng
at the Sant~ ~onlca Alrpcrt. requests authorlzatlon for the C~ty
to o~e~ate an alrcraft fuellns fac~lity at the Santa Hon~ca Alrport,
3stahllshes permanent positlons and wakes ~elated approprlat~ons
fro!", the ;<ir;,-ort l"und, and requests City Counell adoption of a
resolut~on WaJVlng COmpetlt~Ve bidding procedures for a period of
90 day~ to allow the purchase of aviation fuels on the open market.
Background
The Clty for nany years profltably operated the alrcraft fuel~ng
facilltv at the Santa Monlca Alrport. During the energy crisis
of lQ77-78, the Clty had lncreasing difflculty In ob~alnlng a
guaranteed source of supply for aVlation fuel. After unsuccess-
fully gOlng out to bld for a contract for aviatlon fuels, the
City was ~pproached by OaS1S Petro Energy Corporation wlth a
proposal not only to supply fuel but also to operate the facility
wlth a suaranteed annual income to the City of $100,000 accrued
11-3
SEP25~4
-
-
S~~:EED:mh
Septenber 25, 1984
=ro~ ~onthly rent of $6,000 per month and commlSSlonS on the
sales of fuel.
The agreement wlth OaS1S was entered lnto on "March 19, 1979
(Contract No. 3021 (CCS). The lease was for three years from
April 1, 1979 to March 31, 1982, wlth two optlons for addltiona1
flve year perlods.
On Aprll 1, 1982, Oasis exercised its flrst flve year optlon,
WhlCh extended their lease to March 31, 1987. On June 3, 1983,
OaS1S lnforned the Clty that effectlve June 1, 1983, OaS1S would
pay the Clty $500.00 per month rent untll alleged lease and
safety vlolatlons were resolved and that monles remaining due to
Clty would be kept ln escrow.
Verbally and by letter, the Clty lnformed OaS1S that a payment
ot $500 would not be accepted as full payment of rent. The Clty
further, lnformed OaS1S of their responsibllity to submit prompt
payment 0= the full lease amount for June 1983 and all subsequent
months.
OaslS contlnued to submlt $500 payments from June 1983 to the
present date. One June 1, 1984, after exhaustlng all informal
avenues of negotiatlon with Oasis, the Acting Airport Director
requested that the City Attorney serve Oasis with a Three-Day
Notice. ?he Notlce was served and following Oasis's failure to
respond the Clty filed Stilt agalnst OaS1S.
2
-
-
SHA:HED:rrh
September 25, 1984
The case was to corne to trial on Thursday, September 20, 1984.
On wednesday afternoon, September 19, 1984, Oas~s Petroleum's
attorney ~nformed the Clty Attorney's offlce of Oasls's decision
to vacate the premises as of midnight on Wednesday, September
19, 1984. As of September 19, 1984, the balance due the City
of Santa Mon1ca was $87,000. The C1ty is sUlng for damages.
The removal of Oas~s from occupancy of the fuel1ng station left
the A1rport w1th only one fueler on the Alrport; Cal1forn~a Avia-
tion, Wh1Ch sells only two of the three types of aviation fuel
ava1lable.
Clty staff feels that it is essential that at least two fuel
suppllers be 1n operatlon on the Alrport, and lndeed federal
regulations 1nclude requ1rements for competltive services. The
City could pursue two options for the provision of fuel at the
Airport: 1) the lease could be rebid; or 2) the City could re-
sume management of the aircraft fuellng statlon. For several
reasons, the second option 1S recommended.
Pr1Gar1ly, staff do not belleve that it would be prudent to enter
into a lo~g term lease for the facility at this stage in the devel-
opment o~ the A1rport. Such a lease would limit the Clty'S op-
tlons for development of that portlon of the south side of the
A1rport and would compl1cate policy cholces yet to be made con-
cern1ng alrcraft fuel1ng operat1ons by F1xed Base Operators.
3
-
-
SHA:HED:mh
September 25, 1984
Airport staff have extensive experience ~n the operat~on of the
fuel~ng statlon, and believe that the station could again be
operated profltab1y by the Clty on an ~nter~m basis until con-
structlon beglns on Fixed Base Operator Leaseholds.
Successful aperatlan of the facillty will requlre the addition of
flve Alrport Attendant I posltions to Airport staff. There per-
sonnel wll1 be responslb1e for aircraft fueling and the collection
of cash and credlt card payment for the fuel.
In response to the emergency nature of the fuel supply problem at
the Alrport, the Acting Clty Manager exercised his authority under
Sectlon 2509 of the Santa Monlca Municlpa1 Code to authorize the
Purchaslng Agent to purchase aVlation fuel on the open market
prlor to receivlng City Councl1 approval at tonlght's meetlng.
Fuel was dellvered on Frlday, September 21, 1984 and the Airport
Dlrector opened the fueling station for business on Satuurday,
September 22, 1984. The faci11ty was thus closed for only two
days.
In order to assure an lnterim supply of aviation fuel, it will be
necessary to walve competltive bidding procedures for a period of
90 days; a reso1utlon authorlzlng thlS walver 18 attached.
Budgetaryj?lnanCla1 Impact
In order for the City's Alrport to operate the aircraft fueling
statlon, the following budget adjustments are necessary. These
4
"
-
-
SMA: HED : J"",h
September 25, 1984
~
adJustments are based on prellminary estimates of demand for aviation
fuel, addltlonal operating costs and wholesale and retail prices.
Durlng the mld-year budget reVleW approprlate adJustments will be
reconrnended to the Council.
I. Increased A~proprlation Authority
Item Tltle (~o.)
Amount
Comment
Permanent Employees (100)
$32,430
Five positions of
Insurance-Emp1.-Health/
5,547
Airport Attendant I
Dental (174)
for six months
Insurance-Worker Camp (173)
710
Retlrer.ent Contrlbution (177)
2,271
Other Fringe Benefits (197)
42
Temporary Employees (150)
16,215
F~ve positions of
A~rport Attendant I
for three months.
Overtlf'le (149)
1,926
Five posltion x 10 hrs/
mo. x 6 months
Airport Field Maintenance (621) 20,000
Varl0us minor items
for operation of
fueling statlon
Fue1/Lubrlcants for resale
745,000
( 297)
Total addltlonal Approprlation
Authorlty
$847,926
5
-
"
SMA:HED:rrh
September 25, 1984
II. Increased Revenue Estlmate
Alrport - Petro Sales (215)
$971,000
Recor1.,'lendatlon
Clty staff respectfully recommends that the Clty Council:
1) authorlze the operatlon of an a1rcraft fuellng statlon
at the Santa Monica Munlcipal Airport by the City;
2) approve the hlrlng of 5 Airport Attendants I to operate
the faclllty;
3) approve attached Resolutlon walvlng competitlve
Dldding procedures for a perlod of 90 days to allow
the purchase of aVlation fuels on the open market;
4) approve revlsed Airport Budget flgures as described in
the BUdgetary/Financlal Impact Section.
Prepared by: Hank Dittmar, Actlng Alrport Dlrector
Mlke Dennls, Flnance Dlrector
6
"
-
BEFORE DISTRIBUTION CHECK CONTENT OF ALL FOR CITY C~ERK'S ACTION
DIS fRIBUTION OF RESOLUTION ij ,< -/ :'J / ORDINANCE 1/
- , .
j>,. .
-~.(
CouncIl ~eetlng Date
,I or
i
Introduced:
!\genda Item It
//-
J/ /-
/ /
-i---/ -
Adopted:
* ALWAYS PlTBLISH JlOOPTED ORDINANCES
cross out Attorney J s approval
. "- Do back sheet on Word Processor
Was It amended? I~~)
VOTE, AffIrmatIVe" :",:~L ,',
\'egatlve:
AbstaIn"
Absent"
DISTRIBUTION:
ORIGINAL to be SIgned. sealed and filed in Vault.
~EWSPAPER PUBLICATION COate:
Department origInatIng staff report (
Management Serv~ce5 Lynne Barrette urdlnances only
~
Agency mentIoned In document or staff report
(certihed?)
~
J
SubJect file (agenda packet)
Counter fJ Ie
1
1
Others:
AIrport
ParkIng Auth.
),udI torum
Personnel
BUIldIng Dept.
Plannlng
EnVlron. Servo
Pollee (en-
forcement?)
FInance
Purchaslng
FIre
Recr/Parks
General Serv
LIbrary
Transportation_____
Treasurer
)\1anage r
SEND FOUD, COP IES OF AU ORDniA!\CES TO:
CODED SYSTEMS, At~n Peie~ Maclearie
120 r~aln C:tr':'et
AV0~1 ~ew Jersey_07717
SE~D FOUR 'COPIES OF Al.T. ()Rl1PJA"1rFc; TO:
PRESJDI'\G JUDGE
SANTA ~lO:\ICA ;vrU)\;ICTPAL COURT
1725 MAI:-.J STREET
SANTA ~ONICA. CA 90401
*Check Code SectlOns before sendll1g.
TOTAL COPIES
LJ
.'
.
,.
CA: RMM: CMD: JW
Clty Councll Meetlng 9-25-84
Santa Monica, Californla
RESOLUTION NO. 6921(CCS)
(City Cauncll Serles)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA
MONICA WAIVING COMPETITIVE BIDDING PROCEDURES AND
AUTHORIZING DIRECT NEGOTIATION FOR PURCHASE OF
AVIATION FUELS
WHEREAS, effectlve September 20, 1984, Oasis Petroleum
discontlnued selling aVlation fuels at the Santa Monica Alrport
because it has vacated premises leased from the City, and
WHEREAS, in order to ensure adequate supplles of fuels for
Airport users, the Clty intends to sell fuel; and
WHEREAS, It will take approximately ninety (90) days for
the Clty to evaluate lnterlm operating experlence and to purchase
appropriate amounts of aVlatlon fuels through competitive blddlng
procedures,
NON, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1.
Competltlve biddlng for the purchase of
aVlatlon fuels is hereby walved for a period of nlnety days.
SECTION 2.
The purchase of aV1.atlon fuels for the next
nlnety (90) days through negotiatlons on the open market is
necessary for the preservatlon of the publlC health, safety and
weltare.
SECTION 3.
The City Manager is hereby authorlzed to
execute a purchase order negotiated on the open market to
purchase necessary aVlation fuels at the lowest reasonable price.
':"
-
-
SECTION 4. The Clty Clerk shall certlfy to the adoption of
thls Resolution, and thenceforth and thereafter the same shall be
In full force and effect.
APPROVED AS TO FORM:
~\-,~
ROBERT M. MYERS
Clty Attorney
.
-
Adopted and approved thIS 25th day of September, 1984.
W~L)
- 1"Iayor
I hereby certIfy that the foregoing Resolution No. 6921(CCS)
was duly adopted by the CIty CouncIl of the CIty of Santa MonIca
at a meetIng thereof held on September 25, 1984 by the followIng
CouncIl vote:
Ayes: CouncIlmembers: Conn, EpsteIn, JennIngs, Press,
Reed, Zane and Mayor Edwards
Noes: Councllmembers: None
AbstaIn: Councilmembers: None
Absent: Councilmembers: None
ATTEST:
~~,~
CIty Clerk