SR 09-27-2011 3QCaro City Council Report
Santa Monica'
City Council Meeting: September 27, 2011
Agenda Item: �C
To: Mayor and City Council
From: Edward King, Director of Transit Services
Subject: Purchase of Biodiesel Fuel
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a contract with General Petroleum Corporation, a California -based company, in
an amount not to exceed $5,106,000 over a four and three - quarter year term to supply
and deliver biodiesel fuel blends to the Big Blue Bus and Fleet Management Division.
Executive Summary
The purchase of biodiesel fuel supports the City's Sustainable City Plan for reduced
emissions and sustainability. Following a competitive process, staff recommends
contracting with General Petroleum Corporation. Fuel will be used by Big Blue Bus and
Fleet Management Division. The total estimated expenditure for the four year and three -
quarter term is $5,106,000.
Background
In February 2005 the City began using biodiesel in the municipal fleet and in October
2006 the Big Blue Bus began using biodiesel in all diesel buses.
On January 19, 2010, City Council awarded Bid No. 2984 to General Petroleum
Corporation for the purchase of biodiesel fuel through June 30, 2010. On June 8, 2010,
City Council authorized staff to exercise a renewal option offered by General Petroleum
Corporation to supply and deliver biodiesel fuel blends to the Big Blue Bus and Public
Works Fleet Management Division, for the period July 1, 2010 through June 30, 2011 in
1
an amount of $2,050,131. On May 10, 2011, City Council authorized an increase of
$600,000 to the existing purchase orders for anew total of $2,650,131. On June 14,
2011, City Council authorized the rejection of all bid responses to Bid No. 3047 to
supply and deliver biodiesel fuel, and increase the bid award amount of Bid No. 2984
made to General Petroleum Corporation, for the period July 1 through September 30,
2011 or until a formal bid is awarded.
Discussion
The City currently has many vehicles, generators and small engine equipment that
operate on diesel fuel. These vehicles include 62 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.
The Fleet Management Division and the Big Blue Bus maintain fuel storage tanks at
their respective locations where biodiesel fuel is available.
Although biodiesel fuel has always been available and delivered when ordered, should
biodiesel fuel not be available, ultra -low sulfur diesel #2 (ULSD #2) would be purchased
instead.
Vendor Selection
In June 2011, the City published Notices Inviting Bids to supply and deliver biodiesel
fuel as required by the City of Santa Monica in accordance with City specifications. The
bid was posted on the City's on -line bidding site Planet Bids, and notices were
advertised in the Santa Monica Daily Press in accordance with the City Charter and
Municipal Code provisions. Eight bids were received and were publicly opened and read
on July 19, 2011 per Attachment A.
`a
Bids were evaluated based on meeting all specifications, 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
The contract amount to be awarded to General Petroleum Corporation, for the four and
three - quarter year term is $5,106,000. Funds for the purchase of biodiesel fuel are
included in the FY 2011 -13 Budget in the following line items.
• Fleet: $290,000 in account 54459.522910, "Vehicles- Fuels /Lubrication"
• BBB: $2,526,000 in account 41654.522911, "Fuel- Revenue Vehicles"
• BBB: $315,750 in account 41654.522830, "Fuel & Oil Taxes"
Funding for subsequent years will be requested in each budget cycle for Council
approval. Future funding is contingent upon Council approval. All funds used for this
purchase for BBB come from funding sources specifically dedicated for transit uses.
Prepared by: Ralph Merced, Transit Maintenance Manager
Approved:
Edward King
Director of Transit
Attachment A: Bid No. 3056 Results
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Forwarded to Council:
� >
Rod Gould
City Manager
ATTACHMENTA
BID #3056
BID CLOSE DATE: 07/19/11
TITLE: SUPPLY AND DELIVER BIODIESEL FUEL AS REQUIRED BY THE CITY OF SANTA MONICA
General Petroleum
Corp.
The Jankovich
RTC Fuels, LLC
Eco- Fuels, Inc.
Falcon Fuels, Inc.
Rancho Dominguez,
IPC (USA), Inc.
Company
Propel Fuels, Inc.
dba Pearson Fuels
SC Fuels
Vendor
Beverly Hills, CA
Paramount, CA
CA
Irvine, CA
Paramount, CA
Redwood. City, CA
San Diego, CA
Orange, CA
Description/
Average took + /-
Avetogerack +/.
metogerack +b
Aveagereck+ /-
Averagerack +/-
Maragetonk +/_
Aveto g Sto
Avera g Bra
Vendor Mark Up on index price
( pergallon)
( pergallon)
(pergallon)
(pergallon)
(pergallon)
(pergallon)
(pergallon)
(pergallon)
OPTS gross wholesale
CITYYARD
399 YGME biotliesel
index
$ -
$ 0.0424000
$ (0.0900000_
$ 0.0300000
$ 0.2200000
$ 0.2840000
$ (0.0300000)
$ -
1550 PCH
(B50)
OPS gross no.2 (dea0
-
distillate for CARS ULSO
index
$ -
$ 0.1800000
$ 0.1100000
$ 0.1875000
$ 0.2200000
$ 0.2840000
$ 0.1600000
$ (0.0030000)
CITY YARD
OPlsgrosswhmesals
2500
399YGMEblodlesel
index
$ -
$ 0.0726000)
$ 0.0900000
$ 0.0300000
$ 0.2200000
$ -
$ 0.1500000
$ -
MICHIGAN
AVE.
OPTS gross no.2 (dear)
(B20)
dlstinate for CARS ULSD
index
$ -
$ 0.0598000
$ 0.0280000
$ 0.0475000
$ 0.2200000
$ 0.1290000
$ 0.0490000
$ (0.0030000)
CRIS gross wholesale
BBB
399YGMEbiobiesel
index
I $ -
$ 0.0892000
$ 0.0900000
$ 0.0200000
$ 0.2200000
$
1620 6TH ST
(B5)
CRIS gross 1o.2 (dearr
distillate for CARS ULSD
index
$ -
$ 0.0441000
$ 0.0180000
$ 0.0375000
$ 0.2200000
$ 0.1030000
$ 0.0390000
$ (0.0030000)
Annual Totals
-
(Based on recent index prices)
CITY YARD
I
Est. annual
1550 PCH
YGMEtotal
-
(18,000 gaV12
(650)
deliveries)
$ 66,221.88
$ 68,408.63
$ 66,418.53
$ 66,516.86
$ 70,548.18
$ 71,806.74
$ 67,500.11
$ 66,192.38
CITY YARD
2500
MICHIGAN
Est. annual
AVE.
YGME total
(72,000 gal /12
(B20)
deliveries)
$ 263,927.09
$ 266,548.04
$ 264,273.19
$ - 267,388.13
$ 281,232.29
$ 276,512.69
$ 267,010.56
$ 263,738.31
BBB
1620 6TH
Est. annual
ST.
YGME total
(720,000 gal /104
-
(B5)
delivers)
$ 2,504,868.71
$ 2,534,315.08
$ 2,514,779.87
$ 2,533,677.93
$ 2,677,920.71
$ 2,581,837.52
$ 2,528,112.74
$ 2,502,626.90
Totals
$ 2,835,017.68
$ 2,869,271.75.
$ 2,845,471.59
$ 2,867,582.92
$ 3,029,701.18
$ 2,930,156.95
$ 2,862,623.40
$ 2,832,557.59
YGME: Yellow Grease Methyl Ester (produced from waste oils usually from food processing plants and restaurants)
ULSD: Ultra Low Sulfur Diesel
BXX: X= percentage of biodiesel. For example, B20 is 20% biodiesel (YGME) and 80% diesel
I oft
Reference Contract No.
9479 (CCS).