1b. Approve Fuel Pruchase with State of MN
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone: 952,227,1100
Fax: 952,227,1110
Building Inspections
Phone: 952,227,1180
Fax: 952,227,1190
Engineering
Phone: 952,227,1160
Fax: 952,227.1170
Finance
Phone: 952,227,1140
Fax: 952,227,1110
Park & Recreation
Phone: 952,227,1120
Fax: 952,227,1110
Recreation Center
2310 Coulter Boulevard
Phone: 952,227.1400
Fax: 952,227,1404
Planning &
Natural Resources
Phone: 952,227,1130
Fax: 952,227,1110
Public Works
1591 Park Road
Phone: 952,227.1300
Fax: 952,227.1310
Senior Center
Phone: 952,227,1125
Fax: 952,227,1110
Web Site
www.ci.chanhassen.mn.us
11
MEMORANDUM
TO:
Todd Gerhardt, City Manager
0,
Paul Oehme, Director of Public Works/City Engineer <! t
FROM:
DATE:
November 9; 2009
oW
SUBJ:
Approve Fuel Purchase with State of Minnesota - PW305B
PROPOSED MOTION
"The City Council approves fuel purchase with State of Minnesota for 20-10."
City Council approval requires a simple majority vote of the City Council present.
BACKGROUND
Cities and Counties in the Metro area will have the opportunity again to purchase all or a
portion of their fuel through a State of Minnesota joint fuel purchase contract. It is
estimated that this contract could be as large as 5.8 million gallons of unleaded and diesel
fuel with as many as 30 agencies participating. Chanhassen participated in this contract
for the first time this year. The pricing and fuel delivery was acceptable. The City did
not see a significant price savings with this contract in 2009, however, the fuel prices did
not spike like in years past. Thejoint fuel purchase allows the City to lock in a price for
a portion of the fuel needs for the upcoming year. Using this approach, the City can'
mitigate for potential price spikes.
DISCUSSION
Staff is requesting participation in this State contract with just over half of the annual
estimated unleaded and diesel fuel needs. This approach will give the City some
flexibility in fuel purchase based on what prices are in the market at the time fuel is
needed. By locking in approximately half of the fuel needs with the fixed price program,
the City can better budget for fuel costs and will still have the ability to purchase fuel in
the open market from local suppliers or use the spot price program in the State contract,
whichever is more cost effective at that time.
The State of Minnesota is planning to go out for bids on the fuel purchase contract in
early December so staff does not know the contract fuel prices at this time. By approving
this agreement, the City will be required to purchase the specified fuel amount at the
contract price. If bid prices come in higher than expected, the State may not accept the
bids and the City would purchase fuel as it has in the past by obtaining spot pricing from
local suppliers.
Attachments: State Contract
Fuel Order Form
g:\eng\budget & cip\budget\20 I O\bkgd 110909 appv mndot joint fuel purchase agmt.doc
Chanhassen is a Community for Life. Providing for Today and Planning for Tomorrow
TO:
2(
CURRENT FUEL CONSORTIUM MEMBERS
CPV MEMBERS LOCATED IN THE 9 COUNTY
METROPOLITAN AREA (Anoka, Carver, Dakota, Hennepin,
Scott, Sherburne, Ramsey, Wright and Washington)
CPV MEMBERS LOCATED WITHIN 50 MILES OF REPORTING
FUEL TERMINALS IN:
ALEXANDRIA
DULUTH
MANKATO
MARSHALL
ROCHESTER
MARSHALL
FROM:
JACKIE FINGER - STATE MATERIALS MANAGEMENT DIVISION
RE:
FIXED PRICE FUEL PROGRAM FOR 2010
The State intends to lead a solicitation again for 2010 for a fixed price fuel program for qualified participants. There will
be two separate solicitations issued - one for participants in the nine county metropolitan area and one for
participants located within50 miles of reporting fuel terminals.
The Qualification requirements are as follows:
. Participant must be a CPV member and agree to, and comply with, all terms and conditions of the Contract.
. Participant must be located in the areas defined above.
. The tanks must be owned and maintained by the CPV member.
. Participant must be able to take either gasoline or diesel fuel in the required product type and as delivered by
the Contract Vendor in quantities of at least 500 qallons per delivery.
. Participant must take 100 percent of the committed monthly amount at the fixed price contracted on its behalf.
. Fill rate must be at least 500 gallons or more.
CAREFUllY REVIEW THE FOllOWING INFORMATION!!!
Participation in the Spot Price ProQram does not require quantities to be submitted and may be used on an as
needed basis by any participants in the Fixed Price Fuel Program if they so choose.
If you have any questions, please feel free to contact me via E-mail (PREFERRED):iackieJinqer@state.mn.us.
by phone at 651.201.2436, by fax at 651.297.3996. Thank you.
RETURN ORDER FORM NO LATER THAN NOVEMBER 6, 2009.
FUEL CONSORTIUM - OVERVIEW
FIXED PRICE PROGRAM - The agencies listed on the Fixed Price Schedule are required to take 100% of its
monthly quantity committed and the Contract Vendor is required to provide 100% of the monthly quantities
contracted. The program will be for 13 months, ending January 31, 2011.
If the original purchaser is unable to take all of the monthly committed gallons, the Contract Vendor will be
responsible for contacting other locations participating in the Fixed Price Contract to determine if they are able
to take additional gallons.
If the Contract Vendor is able to ship the unused gallons from the original participating purchaser to another
participating agency, there will be no cost to the original participating agency. If the Spot Price is less than the
Fixed Price, participants are not required to take more than the monthly amount they committed to.
If the Contract Vendor is unable to ship the unused gallons from the original participating purchaser to another
participating agency, they may sell the unused gallons on the open market and either debit or credit the
difference in price back to the original participating purchaser based on the open market sell price.
If the Contract Vendor is unable to provide all of the monthly committed gallons to a participating member by the
due date and time, the participating member may purchase the product on the open market and charge the
Contract Vendor for any additional costs incurred.
SPOT PRICE PROGRAM. In addition to a Fixed Price program, the solicitation will include a Spot Price
program for participants to handle extra fuel needs over and above the committed quantities in the Fixed Price
program.
Participants are not required to use the Spot Price program and may use other State Spot Price programs
currently in place or may purchase their additional fuel needs independently.
If the Contract Vendor is unable to provide the order quantity to a State agency or CPV member by the required
due date and time, the State agency or CPV member may purchase the product on the open market and charge
the Contract Vendor for any additional costs incurred.
I...................................................................................
Only qualified State agencies and CPV Members may participate in the Fixed Price Program unless otherwise
approved.
Once final Contracts are executed, the participating agency or entity will be notified of the price and the name of
the Contract Vendor.
The signature below agrees to all terms, conditions and prices of any Contract
agreement entered into on its behalf by the State of Minnesota which includes, but
is not limited to, taking 100% of the monthly fuel quantities submitted for the Fixed
Price Program on the Fuel Order Form. There is no requirement to take any product
using the Spot Price Program.
AGENCY NAME: c.;+y 0-( ~/I\q(l),v\'a.~3~V\..
ADDRESS: ) 5'11 pen-}::. Je..c:l c.. h..QlI\.V\.4s.:1e..l.-\. AtV'. I 55311
CONTACT PERSON: C- h."", de.. s S i "C.c:1' <- TITLE: -f'l e.e.+ Swpe..t"~vd'ehde.K+
PHONE NO.: "}5:). ':2":2; - J3Q(" FAX NO.:9S,;l-;).a' -/31 (;)
E-MAIL:c.Sic.SIe...@<:...l.Ch.c..lI.o..loI.~::>e....... \"'r\n. iJ:$
AUTHORIZED SIGNATURE:
~~
~-
RETURN ORDER FORM NO LATER THAN NOVEMBER 6, 2009.
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