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Home My WebLink AboutAgenda Report - November 28, 1990 (38).I-" COUNCIL COMMUNICATION TO: TETE CITY COUNCIL COUNCIL MEETING DATE NO. FROM: THE CITY MANAGER'S OFFICE NOVEMBER 28, 1990 SUBJECT: CONTRACT APPROVAL - FUEL SUPPLIES FOR THE PERIOD DEC. 1, 1990 THROUGH MAY 31, 1991 RECOMMENDED ACTION: That the City Council approve the agreement providing to - then City of Lodi supplies ofregularand -unleaded- gasoline, and diesel fuel, covering the period December 1, 1990 through May 31, 1991, for award to Roberts Petroleum Service of Lodi, California. BACKGROUND INFORMATION: On September 21, 1990, the City Council authorized the Purchasing Officer to negotiate a fuel supplies agreement with a -local distributor of major brands of fuel. In view of the current -crisis in the Persian Gulf .and uncertainty over availability of fuel this winter, it would be prudent for the City to be involved in a fuel supplies agreement over the near term. Since Roberts Petroleum has access to the greatest number of major refiners (Chevron, Arco, and BP North America), and offers the greatest - assurance for continuity of supply during a fuel shortage situation, Roberts was selected for negotiation of an agreement. The text of the agreement is attached. Revised estimates of fuel requirements during the six-month period are: Regular- Unleaded: 77,400 gallons Regular Leaded: 12,400 gallons Diesel: 21,500 gallons Projected costs are difficult to determine as the price of oil varies, but at current prices the total cost to the City during the period is estimated to be about $125,000. While fuel supplies agreements do not guarantee delivery of 100% of fuel requirements during periods of shortage, users with contracts are generally given preference over those without. Additionally, in times of limited supply, major refiners generally have greater access to supplies than do independents, hence the decision to align with a major supplies contractor such as Roberts Petroleum. 444-- Aw oel E. Harris Purchasing Officer cc: Finance Director November 30, 1990 FUEL SUPPLY AGREEMENT IEmma A I 1. This agreement between Roberts Petroleum Service (Seller) and City of Lodi, California (Buyer) provides for the sale and delivery to the Buyer estimated amounts of Unleaded Regular Gasoline ("Unleaded") Leaded Regular Gasoline ("Regular") Diesel Fuel ("Diesel") during the six-month period beginning December 1, 1990 and ending May 31, 1991, unless otherwise extended or renewed. 2. Estimated requirements by fuel type and delivery location are shown on Attachment 1. 3. Seller agrees to contract with one or more major refiners, including but not limited to Chevron, BP North America, and Arco, for the purpose of providing to the Buyer the estimated supplies shown on Attachment 1. 4. In the event of allocation of fuels provided by refiners) to Seller, Buyer would be subject to similar allocation at a level not less than the highest level of allocation imposed by any of the Seller's contract suppliers. 5. A. Pricing of fuels to Buyer will be based on the lowest available rack price, provided by local sources, on the date of de ivery, subject to the following terms and upcharges: Payment of Invoice Truck/Trailer Split Loads Under 4300 Gal. (8600 gallons) (4300 gallons) (Invoice price = rack price plus:) 0 - 10 days + $.03/gal + S.04/gal + $.06/gal 10- 15 days + S.035/gal + 5.05/gal + S.07/gal 15- 20 days + $.04/gal + $.06/gal + S.08/gal B. Freight surcharges which will apply, only in the event of fuel shortages at primary distribution locations, are: Primary distribution location: Stockton, CA +5.000/gal Secondary distribution location: Sacramento, CA +5.015/gal Tertiary distribution location: Richmond, CA +5,035/gal 4 Fuel Supplies Agreement November 30, 1990 Page 2 In the event allocation to Buyer falls to or below 70% of estimated requirements (referencing Attachment 1), Seller is obligated to provide minimum deliveries to assure adequate supplies for Public Safety (Police and Fire) vehicles and emergency Utility and Public Works service vehicles, which obligation may be superseded only by any State and/or Federal regulations thereafter imposed upon Seller for the purpose of providing fuel supplies to Public Safety agencies. 8. This agreement, or such agreement as is n effect on May 31, 1991, may be renewed, with the consent of both Buyer and Seller, for an additional six-month term beginning June 1, 1991. For City of Lodi, California (Buyer) For Roberts Petroleum, Inc. (Seller) Dated: Dated: C. Rack prices, defined as the Seller's buying price of fuel at the refiner's distribution terminal at the time fuel is loaded, must be verifiable and must be made available to Buyer upon request. "Distribution terminal" shall be the nearest distribution location of available fue?, in order of precedence, at Stockton, Sacramento, or Richmond, California. kms^. 6. Delivery to Buyer will be made within three (3) working days of phone order by Buyer. 7. This agreement is cancellable during the term December 1, 1990 through May 31, 1991, only with consent of both Buyer and Seller, but may be renegotiated with 30 -days' written notice by either Buyer or Seller, in the event the highest level of allocation imposed by any of the Seller's contract suppliers falls to or below 70% of amount contracted by Seller and supplier for delivery to Seller. In the event allocation to Buyer falls to or below 70% of estimated requirements (referencing Attachment 1), Seller is obligated to provide minimum deliveries to assure adequate supplies for Public Safety (Police and Fire) vehicles and emergency Utility and Public Works service vehicles, which obligation may be superseded only by any State and/or Federal regulations thereafter imposed upon Seller for the purpose of providing fuel supplies to Public Safety agencies. 8. This agreement, or such agreement as is n effect on May 31, 1991, may be renewed, with the consent of both Buyer and Seller, for an additional six-month term beginning June 1, 1991. For City of Lodi, California (Buyer) For Roberts Petroleum, Inc. (Seller) Dated: Dated: to el%% CITY OF LODI ESTIMATE OF FUEL REQUIREMENTS DECEMBER, 1990 THROUGH MAY, 1991 Attacnmen t 1 CITY HALL M.S.C. M.S.C. M.S.C. PARKS UNLEADED UNLEADED _ DIESEL__ REGULAR REGULAR DEC. 3 - - - - 10 - - - - - 17 - - - - - 24 - 4300 - 1500 - 31 8600 - 4300 - - JAN. 7 - - - - 14 - - 21 -. 4300 - - - 28 _ _ - 1500 - FEB 4 8600 - 4300 - - 11 - 4300 - - - 18 - - - - - 25 - _ - 1500 vnn MAR. 4 - - 4300 - - 11 8600 4300 - - - 18 - - - - ' 25 - - - 1500 - APR. 1 - 4300 - - - a - - 4300 - - 15 8600 m - - - 22 - - - 1500 - 29 - 4300 - - - MAY 6 - - 4300 - - 13 ' 20 8600 4300 - 1500 - 27 - _ - - 1700 TOTAL GALL=: 43,000 34,400 21,500 9,000 3,400 Attacnmen t 1 ..... ;_ .,.,,.,,., I... RESOLUTION NO. 90-175 A RESOLURON OF THE LODI CITY COUNCIL AWARDING THE OJN110C,T FOR FUEL SUPPLIES FOR THE PERIOD DECEMBER 1, 1990 THROUGH MAY 31, 1991 zsxsaas=ssssx=ssasxa=asxsssz=aaaaac=ssssassssxaaasaassssss�ssss=x=sssaaa=sasassassass WIIFIZM on September 21, 1990, the City Council authorized the Purchasing Officer to negotiate a fuel supplies agreement providing to the City of Lodi supplies of regular and unleaded gasoline and diesel fuel, covering the period December 1, 1990 through May 31, 1991; and VdER ASS Roberts Petroleum Service of Lodi, California was selected for negotiation of an agreement; NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council hereby approves the agreement attached hereto as Exhibit A for providing to the City supplies of regular and unleaded gasoline and diesel fuel, covering the period December 1, 1990 through May 31, 1991 for the award to Roberts Petroleum Service of Lodi, California. *Dated: November 28, 1990 ssssss==sss �sssaxsssassssas=scars=a=axss=cassssassssaassasaaassc=asasssa=ass=sossas- I hereby certify that Resolution No. 90-175 was passed and adopted by the City Council of the City of Lodi in a regular meeting held November 28, 1990 by the following vote: Ayes: Council Members - Hinchman, Olson, Pinkerton, Reid and Snider (Mayor) Noes: Council Members - None Absent: Council Members - None _.A'1 ice M../. Reimche r City Clerk 90-175 RES90175/TATA.02J