SR-072308-1R~®
City Council Report
City of
Santa Monica
City Council Meeting: July 22, 2008
Agenda Item: ~ °~
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Award of Purchase Orders for Biodiesel Fuel
Recommended Action
Staff recommends. that City Council award Bid #2922 to General Petroleum to supply
and deliver B20, B50 and B99 biodiesel fuel blends in an estimated .amount of
$3,437,500 annually.
Executive Summary
The purchase of biodiesel fuel supports the City's Sustainable City Plan for reduced
emissions and sustainability. General Petroleum is recommended #ollowing a formal bid
process. The bid award is for aone-year period beginning July 1, 2008 with three
additional one-year renewal options at the same price, terms and conditions, subject to
annual budget approval. The total estimated expenditure for the four-year term is
$13,750,000. However, staff is including a provision in-the purchase order allowing the
City to unilaterally cancel the arrangement with thirty days notice provided to the
vendor. Additionally, staff will survey the market to determine if savings could be
realized from a new bid process.
Background
Reducing diesel use and switching to less harmful reduced-emission fuels was
mentioned in the Information Item that was submitted to City Council on January 15,
2008. The City strives to continue and expand it policies and programs by switching to
less harmful reduced-emission fuels. With the support of the Council, City staff and the
community, Santa Monica has become one of the world's leaders in successfully
incorporating alternative fuel vehicles into its daily operations.
Discussion
The City currently has many vehicles, generators and small engine equipment that
operate on diesel fuel. These vehicles include 102 buses, over 70 vehicles (large
1
trucks, tractors) compressors, pressure washers, stationary compactors and other
pieces of miscellaneous equipment. Biodiesel's advantages over diesel fuel include
domestic renewable production, clean burning properties and compatibility with existing
diesel engines, storage tanks and distribution equipment.
Fueling vehicles and buses with biodiesel fuel reduces emissions and the health risks
associated with petroleum diesel. Biodiesel contains no sulfur or aromatics, and the
use of biodiesel in a conventional diesel engine results in substantial reduction of
unburned hydrocarbons, carbon monoxide and particulate matter. A U.S. Department
of Energy study showed that the production and use of biodiesel, compared to
petroleum diesel, resulted in a 78.5% reduction in carbon dioxide emissions. Biodiesel
is registered as a fuel and fuel additive with the EPA and meets clean diesel standards
established by the California Air Resources Board (GARB). Since biodiesel receives
such favorable tax treatment, consumers see no increased activity cost. Because
biodiesel fuel is a non-toxic, domestically produced renewable resource that is
biodegradable and sustainable, the purchase of biodiesel fuel supports the standards
set forth by the City's Sustainable City Plan for reduced emissions.
The Fleet Management Division and the Big Blue Bus maintain fuel storage tanks at
their respective locations where biodiesel fuel is available.
City staff is surveying the market to identify if potential savings could be obtained and
plans to conduct a new competitive bid within six months. This will also allow staff to
examine problems specifically related to biodiesel, such as coagulation, and ensure that
bid specifications are consistent with the city's sustainable goals. In the interim, staff
recommends going. forward with this purchase order which will allow us to take
advantage of the environmental benefits of biodiesel as well as the lower price of
biodiesel compared to the cost of purchasing regular diesel.
2
Vendor Selection
The City published Notices Inviting Bids to .supply and deliver bibdiesel fuel in
accordance with City specifications. Bid forms were mailed to twenty-nine vendors and
notices were advertised in accordance with City Charter and Municipal Code provisions.
Two bids were received and publicly opened per Attachment A.
Bids were evaluated based on competitive pricing, bid response, and additional
available options. Based on these criteria, General Petroleum is recommended as the
best bidder.
Financial Impacts & Budget Actions
Fiscal Year 2008/2009 budget authority in the amount of $3,437,500 is available as
follows:
Fleet: $312,500 account 54554.522910, "Vehicles-Fuels/Lubrication"
BBB: $3,125,000 in account 41654.522911, "Fuel-Revenue Vehicles"
Budget authority for subsequent years will be included in each annual proposed City
budget.
Prepared by:
Diane Howell, Purchasing Agent
Approved:
t
t
f-oit-Carol Swindell
Director of Finance
Forwarded to Council:
v
Attachments: Attachment A -Pricing
3
Ewell
ier
ATTACHMENT A
BID #: 2922
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
LOCATION:
1550 PACIFIC COAST H/GHWAY
B50 Biodiesel Blend Fuel
B99 Biodiesel Blend Fuel
Bid Item General Petroleum SC Fuels General Petroleum SC Fuels
Line
Description Floating price per
gallon, no price
rotection Floating price per
gallon, with price
rotection' Floating price per
gallon, no price
rotection Floating price per
gallon, with price
rotection` Floating price per
gallon, no price
~ rotection Floating price per
gallon, with price
rotection" Floating pace per
gallon, no price
mtecticn Floating pace per
gallon, with price
rotection^
1 BioOiesel-a99 perthe OPlS index XSo%(taxable) $ 2.5500 No Bid $ 2.5500 $ 2.5500 $ 2.5500 No Bid $ 2.5500 $ 2.5500
' 2 Carb #2 ULSD perthe OPIS intlex X 50% (taxable) $ 2.6995 No Bid $ 2.6995 $ 2.6995 N/A No Bid N/A N/A
3 Markup (taxable) $ 0:069 No Bid $ 0.27 $ 0.27 $ 0.089 No Bid $ 0.305 $ 0.305
4 L. U.S.T. tax (taxable) $ 0.00700 No Bid $ 0.00'100 $ 0.00100 $ 0.00100 No Bid $ 0.00100 $ 0.00100
5 Federal oil spill fee (taxable) $ 0.001185 No Bid $ 0.001185 $ 0.001785 $ 0.001785 No Bid $ 0.001 185 $ 0.007185
6 CA oil spill surcharge (taxable) $ 0.00119 No Bid $ b.001 t9 $ 0.00119 $ O.OOt 19 No Bid $ 0.00119 $ 0.00119
7 Subtotal of above taxable items $ 2.697125 No Bid $ 2.898725 $ 2.898125 $ 2.642375 No Bid $ 2.858375 $ 2.858375
8 Sales lax (8.25%) $ 0.22251281 No Bid $ 0.23909531 $ 0.23909537 $ 0.21799594 No Bid $ 0.23581594 $ 0.23581594
9 Stale excise lax (non taxable) $ 0.18000 No Bid $ 0.18000 $ 0.18000 $ 0.18000 No Bid $ O.t 8000 $ 0.18000
10 Total for (1) gallon $ 3.0996378 No eitl $ 3.31722 $ 3.31722 $ 3.0403709 No Bid $ 3.27419 $ 3.27419
11 Estimated annual gallons 18,000 No Bid 78,000 18,000 18,000 No Bid 18,000 18,000
12 Total for t2 months $ 55,793.48 No Bid $ 59,709.97 $ 54,709.97 $ 54,726.68 No Bid $ 58,935.44 $ 58,935.44
13 Regulatory compliance fee per delivery(nontaxable) $ 6.95 No Bid $. $ $ 6.95 No Bid $ $
14 Fuel surcharge per delivery (non taxable) $ 9.92 No Bid $ $ $ 9.92 No Bid $ $
Estimated annual total 12 deliveries : $ 55,995.92 No Bid $ 59,709.97 $ 59,709.97 $ 54,929.12 No Bid $ 58,935.44 $ 58,935.44
'Floating price per gallon, with price protection
Maximum amount+hat the City will pay for the BioDiesel index portion
N/A
$ 3.255
N/A
$ 3.255
ULSD Index Podio N/A $ 3.255 N/A N/A
Pa ment Terms N30 Net 30 N30 Net 30
Delive Within 1 Da 1- 2 Da s 1 Da 1- 2 Da s
Renewal O tions Year 2 Same price, terms
and conditions
No Bid Same pace, terms
and conditions
No Extension Same price, terms
and cenditions
No eitl Same price, terms
and conditions
No Exension
Renewal O tion$ Year 3 Same price, terms
and conditions
No Bid Same price, lenns
and conditions
No Extension Same pace, terms
and cendHions
No Bid Same price, terms
and conditions
No Extension
Renewal Options Year 4 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension Same price, terms
and conddions
No Bitl Same price, terms
and conditions
No Exension
ATTACHMENT A
BID #: 2922
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
LOCATION:
2500 MICHIGAN AVE.
B50 Biodiesel Blend Fuel
699 Biodiesel Blend Fuel
Bid Item General Petroleum SC Fuels General Petroleum SC Fuels
Line
Description Floating pace per
gallon, no pace
rotection Floating price per
gallon, wiN price
rotection` Floating price per
gallon, no price
rotection Floating price per
gallon, with price
rotection' Floating price per
gallon, no price
rotection Floating price per
gallon. willr price
rotection' Floating pdca per
gallon, no price
rotection Floating price per
gallon, with price
rotection`
1 BioDiesel-B99 per the OPlS intlexX 50%(taxable) $ 2.5500 $ 2.5500 $ 2.5500 $ 2.5500 $ 2.5500 NO Bid $ 2.5500 $ 2.5500
2 Carb #2 ULBO per the OPl6 intlex X50/(taxable) $ 2.6995 $ 2.6995 $ 2.6995 $ 2.6995 N/A No Bid N/A N/A
3 Mark up (taxable) $ 0.034 No Bid $ 0.09 $ 0.09 $ 0.049 No Bitl $ 0.121 $ 0.121
4 L.U.S.T. tax (taxable) $ 0.00100 $ 0.00100 $ 0.00100 $ 0.00100 $ 0.00100 No Bid $ 0.00700 $ 0.00100
5 Federal oil spill fee (taxable) $ 0.001185 $ 0.007185 $ 0.007185 $ 0.001185 $ 0.001185 No Bid $ 0.001185 $ 0.001185
6 CA oil spill surcharge (taxable) $ 0.00119 $ 0.00119 $ 0.00119 $ 0.00179 $ 0.001 t9 No Bid $ 0.00119 $ 0.00119
7 Subtotal of shove taxable items $ 2.662125 No Bid $ 2.774325 $ 2.774325 $ 2.602375 No Bid $ 2.674575 $ 2.674575
8 Sales lax (8.25 %) $ 0.21962531 No Bid $ 0.22393181 $ 0.22393181 $ 0.21469594 No Bid $ 0.22065244 $ 0.22065244
9 Stale exdse lax (non taxable) $ 0.18000 $ O.t 8000 $ 0.18000 $ 0.18000 $ 0.18000 No Bid $ 0.18000 $ 0.18000
10 Total for (1)gallon $ 3.0617503 No Bid $ 3.11826 $ 3.11826 $ 2.9970709 No Bid $ 3.07523 $ 3.07523
11 Estimated annual gallons 60,000 60,000 60,000 60,Op0 60,000 No Bid 60,000 60,000
12 Total for 12 months $ 183,705.07 No Bid $ 187,095.47 $ 187,095.41 $ 179,824.26 No Bitl $ 184,513.65 $ 184,513.65
13 Regulatory cempliance fee pertlelivery(nontaxable) $ 6.95 No Bid $ $ $ 6.95 No Bid $ $
14 Fuel surcharge per delivery (non taxable) $ 9.92 No Bid $ $ $ 9.92 No Bid $ $
Estimated annual total (12 deliveries): $ 183,907.46 No Bid $ 187,095.41 $ 187,095.41 $ 180,026.70 No Bid $ 184,513.65 $ 184,513.65
'Floating price per gallon, with price protection
MaximumamountthatrheCitywillpayfortheBioDieselintlexporticn
N/A -
$ 3.07
N/A
$ 3.07
ULSD Index Portio N/A $ 3.071 N/A N/A
Pa ment Terms N30 Net 30 N30 Net 30
Delive Within 1 Da 1- 2 Da s 1 Da 1- 2 Da s
Renewal O lions Year 2 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension Same price, terms
antl conditions
No Bid Same price, lettns
and conditions
No Extension
Renewal O lions Year 3 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension Same price, terms
and condHions
No Bid Same price, terms
and conditions
No Extension
Renewal Options Year 4 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension Same price, terms
and wnditions
No Bid Same price, terms
and conditions
No Extension
ATTACHMENT A
BID #: 2922
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
LOCATION:
1620 6TH STREET
B20 Biodiesel Blend Fuel
Bid Item General Petroleum SC Fuels
Line
Description Floating price per
gallon, no price
ratection Floating pace per
gallon, with pace
mteclion' Floating pace per
gallon, no pace
ro[ection Floating pace per
gallon, with pace
mteclion`
1 BioDiesel-B99 per the OPlS intlexX 20%(taxable) $ 2.5500 No Bid $ 2.5500 $ 2.5500
2 Carb #2 ULSD per the OPlS intlexX80%(taxable) $ 2.6995 No Bid $ 2.6995 $ 2.6995
3 Markup (taxable) $ ~ 0.018 No Bid $ 0.04 $ 0.04
4 L.U.S.T. tax (taxable) $ 0.00100 No Bid $ 0.00100 $ 0.00100
5 Federal ail spill fee (taxable) $ 0.001185 No Bid $ 0.007185 $ 0.009 t85
6 CA oil spill surcharge (taxable) $ 0.00719 No Bid $ 0.00119 $ 0.00119
7 Subtotal of above taxable Hems $ 2.690975 No Bid $ 2.707975 $ 2.707975
8 Sales lax (8.25 %) $ 0.22200544 No Bid $ 0.22340794 $ 0.22340794
9 Stale excise tax (non taxable) N/A No Bid N/A N/A
10 Total for (1)gallon $ 2.9129804 No Bid $ 2.93138 $ 2.93136
11 Estimated annual gallons 720,000 No Bid 720,000 720,000
12 Total for 12 months $ 2,097,345.92 No Bid $ 2,110,595.72 $ 2,110,595.72
13 Regulatory compliance fee pertlelivery (non taxable) $ 6.95 No Bid $ $
14 Fuel surcharge per delivery (non taxable) $ 9.92 No Bitl $ $
Estimated annual total (104 deliveries: $2,099,100.40 No Bid $2,110,595.72 $2,110,595.72
`Floating price per gallon, with pace protection
Maximum amountthat the Ciry will pay for the BioDiesel intlex podion
N/A
$ 3.041
ULSD Index Portio N/A $. 3.041
Pa ment Terms N30 Net 30
Delive Within 1 Da 1 -2 Da s
Renewal O lions Year 2 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension
Renewal O lions Year 3 Same price, terms
and conditions
No Bid Same price, terms
and conditions
No Extension
Renewal O lions Year 4 ame pnce, terms
and conditions
No Bid Same price, terms
and contlilions
No Extension