SR-120208-1FCity Council Meeting: December 2, 2008_
Agenda Item:
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Purchase of Biodiesel Fuel
Recommended Action
Staff recommends that City Council award Bid #2956 to General Petroleum Corporation
to supply and deliver B20, B50 and B99 biodiesel fuel blends to the Big Blue Bus
Department and the Fleet Management Division in an estimated amount of $3,140,520
annually.
Executive Summary
The purchase of biodiesel fuel supports the City's Sustainable City Plan for reduced
emissions and sustainability. Staff received authorization from Council on July 23, 2008
to purchase biodiesel fuel fora period of six months from General Petroleum
Corporation following a formal bid process. In August 2008, another bid solicitation for
the purchase of biodiesel fuel was issued based on the responses from the most recent
formal bid process. The Office of sustainability and the Environment approved this
specification which is consistent with the goals of the City's Sustainable policy of
reducing. the consumption of non-renewable, non-recyclable and non-recycled fuels.
General Petroleum Corporation was recommended as the best bidder following this
formal bid process. This bid award is for the period January 24, 2009 through June 30;
2009 with one additional one-year renewal option, subject to annual budget approval.
The estimated expenditure for the balance of this fiscal year is $'1,570,260, and funds
are available in the Big Blue Bus Department and Fleet Management Division budgets.
The total estimated expenditure for the year and one half term is $4,710,780.
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 which can. be found at the following link: htto://www01.smaov.net/cityclerk/council/
information items/2008/ReducedEmissionsFuelsPolicy.odf. In accordance with its
commitment to sustainability, the City continues a policy of using less harmful and
renewable fuel sources. 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.
On July 23, 2008, Council awarded Bid #2922 to General Petroleum Corporation to
supply and deliver biodiesel fuel blends as required by the Big Blue Bus Department
and Fleet Management Division for a six month period, through January 23, 2009.
Hence, another formal bid solicitation to supply and deliver biodiesel fuel at these
locations was issued in August 2008. This formal bid closed on September 17., 2008.
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 trucks
and tractors, compressors, pressure washers, stationary compactors and other pieces
of miscellaneous equipment. Biodiesel affords numerous advantages over conventional
diesel, including 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). 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.
2
The Fleet Management Division and the Big Blue Bus maintain fuel storage tanks at
their respective locations where biodiesel fuel is available.
Although bibdiesel fuel has always been available and delivered when ordered, should
biodiesel fuel not be available, ultra low sulfur diesel #2 (ULSD #2) will be purchased
instead.
Vendor Selection
The City published Notices Inviting Bids to supply and deliver biodiesel fuel in
accordance with City specifications. Bid forms were mailed to forty-seven vendors and
notices were advertised in accordance with City Charter and Municipal Code provisions.
Four 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 Corporation is
recommended as the best bidder.
Financial Impacts & Budget Actions
Fiscal Year 2008/2009 budget authority in the amount of .$1,570,260 is available as
follows:
Fleet: $192,504 in account 54554.522910, "Vehicles-Fuels/Lubrication"
• BBB: $1,375,002 in account 41.111008, "Fuel-Revenue Vehicles" (initially
recorded as inventory and periodically expensed as fuel is dispensed)
• BBB: $2,754 in account 41654.522840, 60W, "Fuel & Oil Taxes"
Budget authority for subsequent years will be included in each annual proposed City
budget.
3
Prepared by:
Kimberlie Nimori, Senior Buyer
Approved: Forwarde~to Council:
windell P. amont well
Director of Finance C y Manager
Attachments: Attachment A -Pricing
4
ATTACHMENT A
BID #: 2956
BID CLOSE DATE: 09/17/08
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
1550 Pacific Coast Highway
B50 Biodiesel Blend Fuel
Bid Item/Vendor
Falcon Fuels
General Petroleum Corporation. Imperial Western
Products, Inc.
SC Fuels
Line Description Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection Floating price per gallon,
with rice rotection* Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection '
1 BioDiesel-B99 per the OPIS
indexX 50% (taxable)
$
4.750000
$
4.750000
$
4.750000
$
4.750000
$
4.750000
2 Carb #2 ULSD per the OPIS index
X50% (taxable)
$
3.184200
$ ~
3.184200
$
3.184200
$
3.184200
$
3.184200
3 Mark up (taxable) $ 0.107900 $ 0.069000 $ 0.089000 $ 0.210000 $ 0.205000
4 L. U.S.T. tax (taxable) $ 0.001000 $ 0.001000 $ 0.001000 $ 0.001000 $ 0.001000
5 Federal oil spill fee (taxable) $ 0.001190 $ 0.001190 $ 0.001190 $ .0.001190 $ 0.001190
6 CA oil spill surcharge
(taxable)
$
0.001190
$
0.001190
$
0.001190
$
0.001190
$
0.001190
7 Subtotal of above taxable
items
$
4.078380
$
4.039480
$
4.059480
$
4.180480
$
4.175480
8 Sales tax (8.25%) $ 0.336466 $ 0.333257 $ 0.334907 $ 0.344890 $ 0.344477
9 State excise tax (non taxable) $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000
10 Total for (1) gallon $ 4.594846 $ 4.552737 $ 4.574387 $ 4.705370 $ 4.699957
11 Estimated annual gallons 18,000 18,000 18,000 18,000 .18,000
12 Total for 12 months $ 82,707.23 '$ 81,949.27 $ 82,338.97 $ 84,696.65 $ 84,599.23
13 Regulatory compliance fee per
delivery (non taxable)
tJ/A
$
6.95
$
6.95
$
-
$
-
14 Fuel surcharge per delivery (non
taxable)
.0313 (29%) per gallon
$
9.92
$
9.92
$
-
$
-
Estimated annual total (12 deliveries): $ 83,270.63 $ 82,151.71 $ 82,541.41 $ 84,696.65 $ 84,599.23
'Floating price per gallgn, with price protection
Maximum amount ihatthe City will pay for th
BioDiesel index portion
N/A
N/A
$
5.25
N/A
N/A
*Floating price per gallon, with price protection
Maximum amount that the City will pay for th
ULSD portio
N/A
N/A
$
5.250
N/A
N/A
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ATTACHMENT A
BID #: 2956
BID CLOSE DATE: 09/17/08
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
2500 Michigan Ave.
B50 Biodiesel Blend Fuel .
Bid Item/Vendor
Falcon Fuels
General Petroleum Corporation Imperial Western
Products, Inc.
SC Fuels
Line D0SC1'IptlOn Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection Floating price per gallon,
with rice rotection* Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection
1 BioDiesel-B99 perthe OPIS
intlexX 50% (taxable)
$ 4.750000
$ 4.750000
$ 4.750000
$ 4.750000.
$ 4.750000
2 Carh #2 ULSD per the OPTS index
X50% (taxable)
$ 3.184200
$ 3.184200
$ 3.184200
$ 3.184200
$ 3.184200
3 Mark up (taxable) $ 0.032300 $ 0.029000 $ 0.049000 $ 0.020000 $ 0.086200
4 L.U.S.T. tax (taxable) $ 0.007000 $ 0.001000 $ 0.001000 $ ~ 0.001000 $ 0.001000
5 Federal oil spill fee (taxable) $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190
6 CA oil spill surcharge
(taxable)
$ 0.001190
$ 0.001190
$ 0.001190
$ 0.001190
$ 0.001190
7 Subtotal of above taxable
items
$ 4.002780
$ 3.999480
$ 4.019480
$ 3.990480
$ 4.056680
8 Sales tax (8.25%) $ ~ 0.330229 $. .0.329957 $ 0.331607 $ ~ 0.329215 $ 0.334676
9 State excise tax (non taxable) $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000
10 Total for (1) gallon $ 4.513009 $ 4.509437 $ 4.531087 $ 4.499695 $ 4.571356
11 Estimated annual gallons 60,000 60,000 60,000 60,000 60,000
12 Total for 12 months $ 270,780.56 $ .270,566.23 $ 271,865.23 $ 269,981.68 $ 274,281.37
13 Regulatory compliance fee per
tlelivery (non taxable)
N/A
$ 6.95
$ 6.95
$ -
$ -
14 Fuel surcharge per tlelivery (non
taxable)
.0094 (29%)
$ 9.92
$ 9.92
$ -
$ -
Estimated annual total (12 deliveries): $ 271,344.56 $ .270,768.67 $. 272,067.67 $ 269,981.68 $ 274,281.37
"Floating price pergallon, with price protection
Maximum amount that the City will pay for th
BioDiesel index portion
N/A
N/A
$ 5.25
N/A
N/A
*Floating price per gallon, with price protection
Maximum amount that the City will pay forth
ULSD portio
N/A
N/A
$ 5.25
N/A
N/A
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ATTACHMENT A
BID #: 2956
BID CLOSE DATE: 09/17/08
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
1550 Pacific Coast Highway
B99 Biodiesel Blend Fuel
Bid Item/Vendor
Falcon Fuels
General Petroleum Corporation Imperial Western
Products, lnc.
SC Fuels
Line DQSRI'IptlOn Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection Floating price per gallon,
with rice rotection* Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection
1 BioDiesel-899.per the OPIS
index (taxable)
$ 4.750000
$ 4.750000
$ 4.750000
$ 4.750000
$ 4.750000
2 Carb #2 ULSD per the OPIS index
(taxable)
N/A
N/A
N/A
N/A
N/A
3 Mark up (taxable) $ 0.107900 $ 0.069000 $ 0.089000 $ 0.080000 $ 0.215000
4 L. U.S.T. tax (taxable) $ 0.00100 $ 0.00100 $ 0.00100 $ 0.00100 $ 0.00100
5 Federal oil spill fee.(taxable) $ 0.00119 $ 0.00119 $ 0.00119 $ 0.00119 $ 0.00119
6 CA. oil spill surcharge
(taxable)
$ 0.00119
$ 0.00119
$ 0.00119
$ 0.00119
$ 0.00119
7 Subtotal of above taxable
items
$ 4.861280.
$ 4.822380
$ 4.842380
$ 4.833380
$ 4.968380
8 Sales tax (8.25%) $ 0.401056 $ 0.397846 $ 0.399496 $ 0.398754 $ 0.409891
9 State excise tax (non taxable) $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000 $ 0.180000
10 Total for (1) gallon $ 5.442336 $ 5.400226 $ 5.421876 $ 5.412134 $ 5.558271
11 Estimated annual gallons 18,000 18,000 18,000 18,000 18,000
12 Total for 12 months $ 97,962.04 $ 97,204.07 $ 97,593.77 $ 97,418;41 $ 100,048.88
13 Regulatory compliance fee per
delivery (non taxable)
N/A
$ 6.95
$ 6.95
$ - -
$ -
14 Fuel surcharge per delivery (non
taxable)
.0313. (29%)
$ 9.92
$ 9.92 -
$ - .
$ -
Estimated annual total (12 deliveries) $ 98,525.44 $ 97,406.51 $ 97,796.21 $ 97,418.41 $ 100,048.88
*Floating price per gallon, with price protection
Maximum amount that the City will pay for th
BioDiesel index portion
N/A
N/A
$ 5.25
N/A.
N/A
*Floating price per gallon, with price protection
Maximum amount [hat the City will pay forth
ULSD portio
N/A
N/A
$ 5.25
N/A
N/A
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ATTACHMENT A
BID #: 2956
BID CLOSE DATE: 09/17/08
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
2500 Michigan Ave.
B99 Biodiesel Blend Fuel
Bid ItemNendor
Falcon Fuels
General Petroleum Corporation Imperial Western
Products, Inc.
SC Fuels
Line Description Floating price per gallon,
no rice rotection Floating price per gallon,
no rice rotection Floating price per gallon,
with rice rotection* Floating price per gallon,
no rice rotection Floating price per gallon,
ho rice rotection
1 BioDiesel-699 per the OPIS
index (taxable)
$ 4.7500
$ 4.7500
$ 4.7500
$ 4.7500
$ 4.7500
2 Carb #2 ULSD per the OPIS index
(taxable)
N/A -
N/A
N/A
N/A
N/A
3 Mark up (taxable) $ 0.022300 $ 0.029000 $ 0.049000 $ (0.050000) $ 0.075000
4 L.U.S.T. tax (taxable) ~ $ 0.001000 $ 0.001000 $ .0.001000 $ 0.001000 $ 0.001000
5 Federal oil spill fee (taxable) $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190
6 CA oil spill surcharge
(taxable)
$ 0.001190
$ 0.001190
$ 0.001190
$ 0.001190
$ 0.001190
7 Subtotal of above taxable
items
$ 4.775680
$ 4.782380
$ 4.802380
$ 4.703380
$ 4.828380
8 Sales tax (8.25%) $ 0.393994 $ 0.394546 $ 0.396196 $ 0.388029 $ 0.398341
9 State excise tax (non taxable) $ 0.180000 $ - 0.180000 $ 0.180000 $ 0.180000 $ 0.180000
10 Total for (1) gallon $ 5.349674 $ 5.356926 $ 5.378576 $ 5.271409 $ 5.406721
11 Estimated annual gallons 60,000 60,000 60,000 60,000 60,000
12 Total for 12 months $ 320,980.42 $ 321,415.58 $ - 322,714.58 $ ~ 316,284.53 $ 324,403.28
13 Regulatory compliance fee per
delivery (non taxable)
N/A
$ 6.95
$ 6.95
$ -
$ -
14 Fuel surcharge per delivery (non
taxable)
0094 (29%)
$ 9.92
$ 9.92
$ -
$ -
Estimated annual total (12 deliveries): $ 321,544.42 $ 321,618.02 $ 322,917.02 $ 316,284.53 $ 324,403.28
*Floating price per gallon, with price protection
Maximum amount that the City will pay forth
BioDiesel index portion
N/A
N/A
$ 5.25
N/A
N/A
*Floating price per gallon, with price protection
Maximum amount that the City will pay forth
ULSD.portio
N/A
N/A
$ 5.25
N/A
N/A
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ATTACHMENT A
BID #: 2956
BID CLOSE DATE: 09/17/08
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
.1620 6th Street
B20 Biodiesel Blend Fuel
Bid Item/Vendor
Falcon Fuels
General Petroleum Corporation Imperial Western
Products, Inc.
SC Fuels
Line Description Floating price per gallon,
no rice rotection Floating price per gallon,.
no rice rotection Floating price per gallon,
with rice rotection` Floating price per gallon,
no rice rotedion Floating price per gallon,
no rice roteclion
1 BioDiesel-698 per the P
index X 20% (taxable)
$
4.750000
$
4.750000
$
4.750000
$
4.750000
$
4.750000
2 Carb #2 ULSD per the OPTS index
X 89 % (taxable)
$
~ 3.184200
$
3.184200
$
3.184200
$
3.184200
$
3.184200
3 Mark up (taxable) $ 0.029300 $ 0.013000 $ 0.033000 $ 0.016000 $ 0.038000
4 L.U.S.T. tax (taxable) $ 0.001000 $ 0.001000 $ 0.001000 $ 0.001000 $ 0.001000
5 Federal oil spill fee (taxable) $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190 $ 0.001190
6 CA oil spill surcharge
(taxable)
$
0.001190
$
0.001190
$
0.001190
$
0.001190
$
0.001190
7 Subtotal of above taxable
items
$
3.530040
$
3.513740
$
3.533740
$
3.516740
$
3.538740
8 Sales tax (8.25%) $ 0.291228 $ 0.289884 $ 0.291534 $ ~ 0.290131 $ -0.291946
9 State excise tax (non taxable) N/A N/A N/A N/A
10 Total for (1) gallon $ 3.8212683 $ 3.8036236 $ 3.8252736 $ 3.8068711 $ 3.8306861
11 Estimated annual gallons 720,000 720,000 720,000 720,000 720,000
12 Total for 12 months $ 2,751,313.18 $ 2,738,608.96 $ 2,754,196.96 $ 2,740,947.16 $ 2,758,093.96
13 Regulatory compliance fee per
delivery (non taxable)
N/A
$
6.95
$
6.95
$
-
$
-
14 Fuel surcharge per delivery (non
taxable)
.0061 (29%)
$
9.92
$
~ 9.92
$
-
$
-
Estimated annual total (104 deliveries) $ 2,755,705.18 $ 2,740,363.44 $ 2,755,951.44 $ 2,740,947.16 $ 2;758,093.96
*Floating price per gallon, with price protection
Maximum amount that the City will pay for [h
BioDiesel index portion
N/A
N/A
$
5.25
N/A
*Floating price per gallon, with price protection
Maximum amount that the Ciry will pay forth
ULSD portio
N/A
N/A
$
5.25
N/A
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-BID #: 2956
BID CLOSE DATE: 09/17/08
ATTACHMENT A
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
Imperial Western
Bid Item/Vendor Falcon Fuels Generaf Petroleum Corporation Products, Inc. SC Fuels
Imperial Western, BQ 9000 Future Fuels-Agra Blend, BQ 9000 accredited
accredited Paseo Cargill-Soy, BQ 9000 accredited.
SOUrCBS Of bI0d10Se General Petroleum, not Bq
9000 accredited Minnesota Soy Proo-Soy
LW.P-Recycled Agra Blend Imperial Western Products,
Inc., BQ 9000 accredited
REG, BQ 9000 accredited
Compliance With Specification Can Comply Can Comply Can Comply Can Comply
2004 Biodiesel Handling and Us
Guideline Can Comply Can Comply Can Comply Can Comply
Compliance with Section 5.
Additives Can Comply Can Comply Can Comply Can Comply
Compliance with Section 6.0 (Othe
Re uirements Can Comply Can Comply Can Comply Can Comply
Compliance with Section 7.2
DeIIVe for the Bi BIUe BUS Can Comply Can Comply Can Comply
Pa ment Terms Net 30 Net 30 Net 30 Net 30
Delive Within 1 da 1-2 days
Renewal O tions Year 2 No, to be reviewed at the
extension
Same price, terms and conditions/ $6.25 for bio/ULS diesels
No bid/renewal No, upon mutual agreement 30
days prior to expiration
Renewal O tions Year 3 No, to be reviewed at the
extension
No Extension -
No bid/renewal No, upon mutual agreement 30
days prior to expiration
Renewal Options Year 4 No, to be reviewed at the
extension -
No Extension
No bid/renewal No, upon mutual agreement 30
days prior to expiration
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