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City of <br />University <br />City <br />Council Agenda Item Cover <br />MEETING DATE: June 21, 2010 <br />AGENDA ITEM TITLE: Annual Fuel Bid <br />AGENDA SECTION: Consent <br />CAN THIS ITEM BE RESCHEDULED? : No <br />BACKGROUND REVIEW: The City solicited bids from regional fuel suppliers to provide <br />Unleaded 87 octane fuel and Diesel and Bio-Diesel blends for the City's fleet and equipment. <br />Based on the data we are now able to generate from implementing the Fleet software <br />information system, the staffing and fleet reductions over the last three years have enabled the <br />City to reduce its estimated annual fuel consumption from the 2007-2009 levels of 125,000 <br />gallons per year to 90,000 of unleaded fuel for 2010, and from the 2007-2009 levels of 175,000 <br />to 80,000 gallons of Diesel/Bio-Diesel for 2010. This represents a reduction in the estimated <br />consumption of fuel of 38% for unleaded fuel and 54% for Diesel over previous years' levels. <br />The City requested bids based on the rack (wholesale) price plus mark-up. The rack price <br />fluctuates daily according to market conditions. The bidder that provides the least mark-up over <br />the rack price represents the lowest bidder. The cost per gallon below is as of the bid date of <br />May 27, 2010. Two vendors responded. The bid results are as follows: <br />Company Diesel #2 Unleaded Bio 5% <br />(80,000 gal.) (90,000 gal.) (90,000 gal.) <br />Energy Petroleum Fuel Cost $/gallon $2.05 $2.07 $2.09 <br />Total Cost $164,000 $186,300 $188,100 <br />Petroleum Traders Corp Fuel Cost/Gallon $2.28 $2.11 $2.18 <br />Total Cost $182,400 $189,900 $196,200 <br />Review of the bids revealed that Energy Petroleum charged amark-up of $0.01 per gallon on all <br />fuels. The mark-up from Petroleum Traders ranged from $0.05 to $0.25. This year to achieve <br />as much savings as possible we also negotiated with Energy Petroleum to honor their price on <br />smaller deliveries such as fueling the City Hall and Fire House generators, which historically <br />operators had provided with a higher mark-up. Their agreement to do so will result in a <br />significant savings to the city. <br />RECOMMENDATION: It is recommended that the bid be awarded to the lowest bidder Energy Petroleum. <br />June 21, 2010 I-7-1 <br />