Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Non-Professional Services Agreement with Western States Oil for Off-site Fueling Services During the Public Works Service Center Replace Fuel Tanks Project for $534,933 and to Negotiate Contract Amendments up to 10% of the Total Contract Amount, for a Total Not-to-Exceed Amount of $588,426, and to Appropriate $150,000 for the Services
Staffreport
COUNCIL PRIORITY
• Infrastructure
SUMMARY
The Public Works Service Center Replace Fuel Tanks Project planned for construction in 2025 will require an alternate fuel site for the City’s fleet vehicles while construction occurs. The off-site fueling agreement proposed herein will provide authorized City of San Leandro fleet operators with cards that can be used to acquire fuel at off-site locations.
RECOMMENDATIONS
Staff recommends that the City Council adopt a resolution to approve and authorize the City Manager to execute a Non-Professional Services Agreement with Western States Oil for off-site fueling during the Public Works Service Center Replace Fuel Tanks Project for a total amount not-to-exceed $534,933, to Negotiate Cumulative Contract Amendments up to 10% of the Total Contract Amount, for a Total Not-to-Exceed Amount of $588,426, and to appropriate $150,000 for the Services.
BACKGROUND
The City’s Public Works Service Center currently has four single-walled underground service tanks containing diesel and unleaded fuel. These tanks provide fuel a short distance to the four pumps that serve the City’s fleet of vehicles and equipment. The State of California Water Board requires all single-walled tanks and connected plumbing to be permanently closed by December 2025. Public Works Engineering Division is currently out to bid to identify a contractor to remove existing fuel storage tanks and replace them with new tanks and modern dispensers that meet both the applicable regulations and the current demands at the fuel station. Once underway, the construction will take up to nine months.
During this time, the City of San Leandro fleet will require an alternate fueling location. Upon approval of the proposed agreement, Western States Oil, a franchisee of the larger Pacific Pride network, will issue 235 fuel cards that will enable authorized City of San Leandro vehicle operators to acquire discounted fuel at fuel stations within the Pacific Pride network and market rate fuel at stations outside of the Pacific Pride network. There are 10 Pacific Pride fueling stations within San Leandro where discounted fuel can be acquired.
Analysis
Fuel can be purchased in commercial quantities, known as cardlock pricing, at a lower rate than retail sales. Staff obtained quotes for commercial fuel services from P-fleet, WEX and Western States Oil. Western States Oil provided the lowest price and is headquartered within the City of San Leandro.
Fuel prices during construction are estimated and prices may be higher or lower than projected. Authorization to execute change orders up to 10% of the original contract amount will allow staff to continue to purchase fuel if prices exceed current estimations.
Cardlock fuel, while cheaper than retail, is more expensive than the wholesale fuel normally purchased by the City. Over the life of this agreement the City expects to purchase 117,000 gallons of fuel at a premium of $1.15 to $1.28 per gallon. The extra cost is not accounted for in the project budget or the current operating budget and an appropriation from fund balance is necessary to continue to fuel the fleet during construction.
Financial Impacts
This contract for outside fuel purchase will require Council appropriation of $150,000 from the Equipment Repair and Maintenance Fund for Fiscal Year 2024-2025 from fund balance into Account 690-16-001-6180.
The project will be funded as follows:
• Equipment Repair and Maintenance Fund, Account 690-16-001: $588,426
This Council action was not budgeted and will require an appropriation of $150,000 for this project that will draw down the Equipment Repair and Maintenance Fund’s fund balance. There is sufficient undesignated fund balance to cover the appropriation.
ATTACHMENTS
A: Resolution Officsite Fueling
B: Scope of Services
C: Compensation Schedule
PREPARED BY: Dana Turner, Management Analyst I (Acting), Public Works