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HomeMy WebLinkAbout08 - CC-8 - Unleaded Fuel Services - 6/1/20211 CITY COUNCIL AGENDA REPORT MEETING DATE: JUNE 1, 2021 ITEM NUMBER: CC-8 SUBJECT: UNLEADED FUEL SERVICES DATE: MAY 7, 2021 FROM: PUBLIC SERVICES/MANTENANCE SERVICES DIVISION PRESENTATION BY: RAJA SETHURAMAN, PUBLIC SERVICES DIRECTOR FOR FURTHER INFORMATION CONTACT: MIKE TUCKER, MAINTENANCE SUPERINTENDENT (714) 327-7473 RECOMMENDATION: Staff recommends that the City Council: 1. Approve Amendment No. 1 (Attachment 1) to the Agreement with Merrimac Petroleum, Inc., DBA Merrimac Energy Group increasing the annual amount by $35,000; and 2. Authorize the City Manager and the City Clerk to execute the amendment and future authorized amendments to the agreement. BACKGROUND: The City’s Public Services Department, Equipment Maintenance Section, is responsible for maintaining a total of twelve (12) fuel storage tanks and ensuring that they have adequate and uninterrupted supply of fuel. This includes five (5) above ground storage tanks and seven (7) underground storage tanks. These tanks provide fuel storage and dispensing at the City’s Corporation Yard, Police Department and Fire Stations 1, 2, 3, 5, and 6. The City also has ten (10) emergency generators located at various sites that require fuel. The Equipment Maintenance Section maintains, monitors, coordinates fuel deliveries and oversees fueling operations in compliance with Federal, State and County regulations. ANALYSIS: The City is currently purchasing unleaded fuel from Merrimac Energy Group utilizing pricing provided by a Cooperative Agreement MA-017-16011533 with the County of Orange. Using the County’s Cooperative Agreement has proven to be an effective means of purchasing fuel and ensures that the City receives the best possible prices. The current $350,000 allotment provided under the original agreement is nearly expended. Based on projected demand, an additional $35,000 in fuel purchases is required in order to ensure supply of unleaded fuel to support City operations including Emergency Police and Fire services for the remainder of Fiscal Year 2020-21. 2 Staff requests City Council approval of the amendment to increase the annual compensation by $35,000 to meet City’s fuel needs. ALTERNATIVES CONSIDERED: The City Council may reject Amendment No. 1 to Merrimac Petroleum, Inc., DBA Merrimac Energy Group in the amount of $35,000 to provide City-wide unleaded fuel delivery services for the remainder of Fiscal Year 2020-21. However, this action would negatively impact public safety and the daily operations and services rendered by City staff. FISCAL REVIEW: The amendment will be funded from the Fuel Inventory Budget. Based on City Council approval, fuel purchasing and delivery services will continue to be budgeted in subsequent fiscal years. LEGAL REVIEW: The City Attorney’s Office has reviewed this agenda report, has prepared Amendment No. 1 to the PSA, and approves them both as to form. CITY COUNCIL GOALS & PRIORITIES: This item supports the following City Council Goal: Maintain and enhance the City’s infrastructure, facilities, equipment and technology. CONCLUSION: The use of the County of Orange’s Cooperative Agreement is a cost effective method of procuring fuel and delivery services from an established fuel vendor that will secure the City’s ability to purchase fuel while meeting all procurement provisions set forth by the City’s procurement policies. Therefore, staff recommends that the City Council: 1. Approve Amendment No. 1 (Attachment 1) to the Agreement with Merrimac Petroleum, Inc., DBA Merrimac Energy Group, increasing the annual amount by $35,000; and 2. Authorize the City Manager and the City Clerk to execute the amendment and future authorized amendments to the agreement. 3 RAJA SETHURAMAN MIKE TUCKER Public Services Director Maintenance Superintendent CAROL MOLINA KIMBERLY HALL BARLOW Finance Director City Attorney ATTACHMENTS: 1. Amendment No. 1 to Merrimac Petroleum, Inc. PSA $77$&+0(17 $77$&+0(17 $77$&+0(17