Subject: Consent Agenda
Title
A Resolution of the Board of Trustees of the Town of Erie Approving the Services Agreement for the Purchase of Bulk Fuel from Hill Petroleum
Body
Department: Public Works
Presenter: Todd Fessenden, Public Works Director
Fiscal Summary:
Cost as Recommended: $ 185,900
Balance Available: $ 185,900
Budget Line Item Number: 100-70-450-534040
New Appropriation Required: No
Staff Recommendation:
Recommendation
Approve Resolution authorizing said purchase and authorizing staff to expend said funds.
End
Summary and Background of Subject Matter:
The 2022 Operating Budget includes funds for annual maintenance service and supplies contracts. These contracts are competitively or state-bid and awarded. Each of the contracts allows for a renewal option for up to four consecutive years following the initial award (a total of five years). A proposed renewal occurs when both the Town and Contractor/Vendor agree, the increased price is no more than 2% or the current Consumer Price Index increase of the previous year and performed work was satisfactory.
Weld County solicited fuel services in April 2021. Hill Petroleum was awarded that contract. The Town negotiated pricing with Hill to fit the Town’s estimated quantities of 118,000 gallons of unleaded and 30,000 of diesel. The diesel cost directly matches Ft Lupton’s cost while the unleaded is between Ft Lupton and Greeley. While Weld County bid a locked price per gallon, the Town uses a margin price over the base cost. We feel this allows more flexibility than a locked price.
For diesel, we’re right in line with Ft Lupton’s estimated usage (if not a bit higher as the estimated 30,000 is a bit low due to the light winter and lower diesel usage currently. So we went with Ft Lupton’s negotiated price of $0.135.
Type Storage Est. Usage Base Price Resell Price Total Price
Ft Lupton Diesel 5000 30,000 2.1577 0.135 2.2927
For unleaded, we are between Ft Lupton (19,000 at $0.13) and Greeley (368,000 at $0.08) at 118,000, and we negotiated to $0.11.
Type Storage Est. Usage Base Price Resell Price Total Price
Ft Lupton Unleaded 5000 19,000 2.3592 0.13 2.4892
Greeley Unleaded 18000 368,000 2.3592 0.08 2.4392
Fiscal Impact:
The Town’s Fleet Division orders fuel for all Town-owned units on an as needed basis. This initial contract is for 2022 with a not-to-exceed amount of $185,900. This contract will also automatically renew for four subsequent years pending prices are within the allotted increase amount, within the subsequent years approved budgeted amounts, and services are satisfactory for both parties.
Board Priority(s) Addressed:
ü Effective Governance
ü Environmentally Sustainable
ü Fiscally Responsible
Attachments:
1. Resolution 22-04
2. Weld County Contract
3. Town of Erie Agreement