HomeMy WebLinkAbout3/19/2008 - STAFF REPORTS - 2.I. F pALM S,p
�p �2
City Council Staff Report
DATE: MARCH 19, 2008 CONSENT CALENDAR
SUBJECT: APPROVE COOPERATIVE PURCHASE OF THE CITY'S BULK
GASOLINE AND DIESEL FUEL COMMODITY REQUIREMENTS
FROM: David H. Ready, City Manager
BY: Assistant City Manager-- Administrative Services
SUMMARY
Due to the relatively small volume of fuel that is purchased, the City benefits by
participating in the bulk fuel contract of a much larger agency. The City has participated
in the County of Riverside's bulk fuel contract since 2004. The County recently
conducted a new formal bid process for a bulk fuel contract that included all of the
County fuel requirements, as well as the fuel requirements of nine cities in the county,
including Palm Springs. The County's formal bid process resulted in a contract
awarded to two vendors; Downs Commercial Fueling of Corona, CA and The SoCo
Group Inc. of Perris, CA. The SoCo Group Inc. is the vendor for this region of the
County.
RECOMMENDATION,
That City Council approve the issuance of an annual Blanket Purchase Order, not to
exceed the budgeted amount approved each fiscal year, for the City's bulk gasoline and
diesel fuel commodity requirements to The SoCo Group Inc., of Perris, CA.,
cooperatively participating in the County of Riverside Fuel Contract through February,
2011.
STAFF' ANALYSIS:
Fuel pricing formulas are based on the Oil Price Information Services (OPTS) weekly
newsletter that is an industry standard for reporting average fuel prices on a per gallon
basis nationally. Each supplier is allowed to charge a "differential" based upon volume,
load size, and delivery location. Applicable taxes are then added. The County of
Riverside, with significantly greater fuel volume to leverage in the market than the City
of Palm Springs, conducted a formal bid and split their award between two vendors,
Downs Commercial Fueling of Corona CA. and The SoCo Croup Inc. of Perris of CA.
ITEM NO.
Although fuel rack rates rluctuate weekly from the refineries, The SoCo Groups'
differential for the Palm Springs area (.01013 per gallon) was less than that of Downs
($.02990 per gallon) and therefore The SoCo Group received the award for this region
of the County. While we all know that gas prices are volatile and will fluctuate weekly
throughout the year, based on the current OPIS price for this week (including the
differential and CA sales tax) our price from SoCo Group under this contract would be
approximately $2.83 per gallon for unleaded gasoline and $3.09 per gallon for diesel.
The City is exempt from the Federal Excise Tax on fuel-
The County's bid for 3.8 million gallons of unleaded gasoline and 1.8 million gallons of
diesel fuel annually included the City of Palm Springs' approximately 165,000 gallons of
unleaded gasoline and 37,000 gallons of diesel fuel for the City's eight fuel tanks.
Current Fiscal Year 2007/2008 fuel costs for city vehicles are expected to exceed
$600,000 and the projected cost to be budgeted for Fiscal 2008/2009 will be $700,000
per the interim Finance Director.
The Procurement and Contracting Manager, pursuant to the requirements of Section
7.09.010 of the Municipal Code, finds that utilization of the formal competitive bid
process that leverages the bulk purchasing volume by the County of Riverside, CA to
procure the City's gasoline and diesel fuel commodity requirements from The SoCo
Group is adequate to protect the public interest, and the total cost of the fuel is likely to
be less than could be obtained through an independent City competitive process.
FISCAL IMPACT:
Funds are budgeted and available in the following accounts:
Gasoline: 510-5470-42035
Diesel: 510-5470-42045
L
ro L. Butzl istant City Manager David H- Ready, City er
000002