HomeMy WebLinkAbout21 - CC-10 - Agreement for Unleaded Fuel Services wit - 7/20/20211
CITY COUNCIL AGENDA REPORT
MEETING DATE: JULY 20, 2021 ITEM NUMBER: CC-10
SUBJECT: AGREEMENT FOR UNLEADED FUEL SERVICES WITH PINNACLE
PETROLEUM, INC.
DATE: JUNE 30, 2021
FROM: PUBLIC SERVICES/MAINTENANCE 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 the proposed Agreement (Attachment 1) with Pinnacle Petroleum, Inc., 16651
Gemini Lane, Huntington Beach, CA 92647 for the purchase and delivery of unleaded
fuel in an annual amount of $400,000, based upon pricing provided through a
Cooperative Agreement with the County of Orange, Contract RCA-017-210100021
(Attachment 2), commencing on August 1, 2021 and continuing for a term of five (5)
years from that date to June 30, 2026, unless otherwise terminated by the County of
Orange; and
2. Authorize the City Manager and the City Clerk to execute the agreements and future
authorized amendments to the agreements.
BACKGROUND:
The City’s Public Services Department, Equipment Maintenance Section maintains a total
of twelve (12) storage tanks for fuels, lubricants and hazardous waste. These tanks provide
fuel storage and dispensing at Fire Stations 1, 2, 5, and 6, the Police Department and the
City’s Corporation Yard. 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. The goal is to provide uninterrupted service to the City and to
minimize delays in daily operations.
The City has purchased fuel utilizing pricing provided by a cooperative agreement with the
County of Orange for fuel delivery services since April 15, 2015. 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.
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ANALYSIS:
The City will utilize the County of Orange’s cooperative agreement with Pinnacle Petroleum,
Inc., (RCA-017-210100021) for the procurement of unleaded fuel. The agreement meets all
of the City’s purchasing requirements and all requirements set forth by the County of Orange
regarding regional cooperative agreements and subordinate contracts. This agreement was
competitively bid by the County of Orange through a formal bid process, assuring the lowest
prices are attained.
In FY 2020-21, approximately 175,000 gallons of unleaded was used by the City. The
average price paid per gallon for unleaded fuel in FY 2020-21 was $1.91. Staff estimates
that in Fiscal Year (FY) 2021-22, the total purchase of unleaded fuel will be approximately
$400,000, after accounting for increases in fuel prices based on Oil Price Information
Service (OPIS) rates, a service that monitors and sets the daily prices of wholesale fuel.
Staff requests City Council approval of the proposed agreement for fuel purchases.
ALTERNATIVES CONSIDERED:
The City Council may direct staff to conduct an independent formal bid to acquire fuel
procurement and delivery services. However, this process is unlikely to obtain pricing below
that of the County agreement due to the low volume of fuel purchased by the City in
comparison to the County.
FISCAL REVIEW:
The agreement will be funded from the Equipment Replacement Fund’s Fuel Inventory
Account. Subject to 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, prepared the Agreement, and
approves them both as to form.
CITY COUNCIL GOALS & PRIORITIES:
In 2021, the City Council adopted a list of goals and priorities. This project works toward
achieving the following City Council goals:
“Strengthen Public Safety and Keep the Community Safe.”
“Maintain and Enhance the City’s Infrastructure, Facilities, Equipment, and
Technology.”
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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 the proposed Agreement (Attachment 1) with Pinnacle Petroleum, Inc., 16651
Gemini Lane, Huntington Beach, CA 92647 for the purchase and delivery of unleaded
fuel in an annual amount of $400,000, based upon pricing provided through a
Cooperative Agreement with the County of Orange, Contract RCA-017-210100021
(Attachment 2), commencing on August 1, 2021 and continuing for a term of five (5)
years from that date to June 30, 2026, unless otherwise terminated by the County of
Orange; and
2. Authorize the City Manager and the City Clerk to execute the agreements and future
authorized amendments to the agreements.
MIKE TUCKER RAJA SETHURAMAN
Maintenance Superintendent Public Services Director
CAROL MOLINA KIMBERLY HALL BARLOW
Finance Director City Attorney
ATTACHMENTS: 1.
2.
Proposed Agreement for Unleaded Fuel Services
Orange County Contract RCA-017-210100021