AGENDA REPORT
Meeting Date: May 24, 2022
Item Number:
To: Honorable Mayor & City Council
From: Craig Crowder, Fleet & Facilities Manager
Michael Hensley, Deputy Director of Public Works-Operations Subject: AMENDMENT NO. 2 TO AN AGREEMENT BETWEEN THE CITY
OF BEVERLY HILLS AND TACENERGY, LLC (FORMERLY
TRUMAN ARNOLD COMPANIES DBA TAC ENERGY) FOR
SUPPLY OF GASOLINE AND DIESEL FUELS AND CONSENT TO
ASSIGNMENT; AND
AN APPROPRIATION FROM THE VEHICLE FUND IN THE
AMOUNT OF $150,000 FOR PURCHASE OF GASOLINE &
DIESEL FUEL THROUGH FISCAL YEAR 2021/22; AND
APPROVAL OF A CHANGE PURCHASE ORDER TO
TACENERGY, LLC FOR A TOTAL NOT-TO-EXCEED AMOUNT
OF $875,000 FOR THE PURCHASE OF GASOLINE & DIESEL
FUEL
Attachments: 1. Amendment No. 2
RECOMMENDATION
Staff recommends City Council move to (1) approve an amendment to TACenergy, LLC (formerly Truman Arnold Companies DBA TAC Energy) for the purchase of Gasoline & Diesel Fuel, (2) approve an appropriation from the Vehicle Fund in the amount of $150,000 for the purchase of Gasoline & Diesel Fuel and (3) approve a change purchase order in the not-to-exceed amount of $875,000 to TACenergy, LLC for the purchase of gasoline and diesel fuel for the remainder of Fiscal Year 2021/22.
INTRODUCTION
The City owns and operates a fleet consisting of approximately 450 vehicles and equipment. To support fleet operation, the City takes delivery of approximately 250,000 gallons of gasoline and diesel fuels annually. This annual volume, which contains approximately 85,000 gallons of renewable diesel (RD99) which is a direct drop-in E-7
Meeting Date: May 24, 2022
replacement fuel, is 100% renewable and sustainable, has up to 80% smaller greenhouse gas emissions compared to petroleum diesel and is an approved fuel by the State of California.
DISCUSSION
In order to get the best possible pricing for fuel, staff conducted a formal-bid solicitation by publishing “Bid 17-21” on the City’s website. This bid specified the purchase of regular unleaded gasoline and CARB #2 Ultra Low Sulfur Diesel (ULSD) Renewable Diesel (RD99) fuels for the operation of the City's fleet of vehicles and equipment. The City requires motor fuel deliveries of varying quantities at various locations around the City, which require a vendor to furnish full load, short load and pump-off deliveries. While the current agreement indicates no additional charges for short load or pump-off deliveries, the existing vendor has requested a separate delivery charge of $125 per delivery to offset escalated fuel costs. Amendment No. 2 (Attachment 1) to the existing agreement adds the separate delivery charge of $125 per delivery as well as adressing a recent vendor name change to TACenergy, LLC (formerly Truman Arnold Companies DBA TAC Energy). Fuel prices are volatile and fluctuate daily and the Oil Price Index Service (OPIS) tracks and publishes the OPIS Daily Gross Contract Average price schedule indicating the daily rack rate for the terminal where the fuel is dispensed. Fuel Vendors responding to “Bid 17-21” provided their per-gallon price proposals either + or – from the OPIS daily rack rate based on the City’s projected volume of purchased fuels.
The cost analysis of these proposals is as follows:
VENDOR NAME
Anticipated Price Difference Based on
OPIS Daily Gross Contract Average and
City’s Projected Usage
SC FUELS Did not provide pricing for all fuels
MANSFIELD SOLUTIONS -$18,509
PINNACLE PETROLEUM -$12,444
IPC USA, INC.(TACenergy, LLC) -$13,380
TACenergy provided an estimated annual savings of $13,380 based on projected usage.
Adding a delivery fee of $125 will still allow for savings when compared to the OPIS daily rack rate. In addition, TACenergy also provides additional benefits that make continuing to partner with the vendor attractive. These benefits include: The largest private storage capacity of Renewable Diesel (RD99) in the Los Angeles and San Francisco market places, exceeding 5 million gallons, which allows it to have special private terminal access. No other vendor has this capacity, which further ensures the availability and reliability of RD99 for the City’s fleet of vehicles and equipment. Additional storage capacity in the City of Carson, which includes over 42 million gallons of storage and marine terminal dock access for cargoes. It also has pipeline access to “outer terminals” in Colton and San Diego. TACenergy, LLC owns its own transport company, Vista Energy Transport, which ensures it has full control over fuel deliveries and further increases its ability to meet the City’s needs.
Meeting Date: May 24, 2022
Over the past agreement term, TACenergy, LLC has demonstrated reliable performance and products, with no short load or pump off fees, as a fuel supplier during previous agreements with the City. TACenergy, LLC has its Western Regional Headquarters located in Southern California, in the City of Santa Ana.
Through conversations between TACenergy and staff, the vendor has agreed to hold current pricing for the term of this amendment with the addition of the delivery fee. In order to ensure the City continues to receive the best cost and has continued and interrupted access to necessary gasoline and diesel fuel, staff recommends approval of the appropriation, amendment and subsequent purchase order to TACenergy, LLC. Staff has requested a budget enhancement to the Fuel Inventory Program for Fiscal Year 2022/23 due to the escalated cost of transportation fuel and will bring a separate purchase order request to City Council for Fiscal Year 2022/23.
Funding for this purchase order is supported by an appropriation of $150,000 from the Vehicle Fund and the Fiscal Year 2021/22 City Council-approved Department budget.
Program # / Description of Fund Source Amount
490/ Vehicle Fund To 49010001-720900 / Fuel Inventory $150,000 Jeff Muir,
Director of Finance
Shana Epstein,
Director of Public Works
Finance Approval Approved By
Attachment 1
-1-
B0785-0001\2651775v4.doc
AMENDMENT NO. 2 TO AN AGREEMENT BETWEEN THE CITY
OF BEVERLY HILLS AND TACENERGY, LLC (FORMERLY
TRUMAN ARNOLD COMPANIES DBA TAC ENERGY) FOR
SUPPLY OF GASOLINE AND DIESEL FUELS AND CONSENT TO
ASSIGNMENT
NAME OF CONTRACTOR: TACenergy, LLC
(Formerly Truman Arnold Companies
dba TAC Energy)
RESPONSIBLE PRINCIPAL Fred Sloan, COO
OF CONTRACTOR:
CONTRACTOR'S ADDRESS: 701 South Robison Rd.
P.O Box 1481
Texarkana, TX 75504
Attention: Fred Sloan, COO
CONTRACTOR’S E.I.N./TAX I.D. NO.: 87-4665900
CITY'S ADDRESS: City of Beverly Hills
345 Foothill Road
Beverly Hills, CA 90210
Attention: Shana E. Epstein, Director of Public
Works
COMMENCEMENT DATE: July 18, 2017
TERMINATION DATE: June 30, 2018 unless extended pursuant to Section 2 of the Agreement (Original Termination Date)
June 30, 2019 (as extended pursuant to Section 2
by letter dated May 4, 2018)
June 30, 2020 (as extended pursuant to Section 2
by letter dated February 5, 2019)
June 30, 2021 (as extended pursuant to Section 2
by letter dated June 30, 2020)
June 30, 2022 (as extended pursuant to Section 2
by letter dated April 13, 2021)
June 30, 2023 (amended pursuant to this
Amendment No. 2)
CONSIDERATION: Original Agreement: Not to Exceed $725,000.00 per Fiscal Year (FY) more particularly described
in Exhibit A including Attachment 1, and Exhibit B
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -2-
B0785-0001\2651775v4.doc
FY 2017-2018: $725,000.00
FY 2018-2019: $725,000.00
FY 2019-2020: $725,000.00
FY 2020-2021: $725,000.00
Amendment No. 1: No Additional Consideration
Amendment No. 2:
Not to Exceed: additional $5,175,000.00
Not to exceed:
Fiscal Year 2021- 2022 only: $875,000.00
FY 2022-2023: $1,300,000.00
FY 2023-2024 (if extended): $1,500,000.00
FY 2024-2025 (if extended): $1,500,000.00
Total Not to Exceed: $8,075,000.00, more
particularly described in Exhibit A including
Attachment 1, and Exhibit B
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -3-
B0785-0001\2651775v4.doc
AMENDMENT NO. 2 TO AN AGREEMENT BETWEEN THE CITY
OF BEVERLY HILLS AND TACENERGY, LLC (FORMERLY
TRUMAN ARNOLD COMPANIES DBA TAC ENERGY) FOR
SUPPLY OF GASOLINE AND DIESEL FUELS AND CONSENT TO
ASSIGNMENT
This Amendment No. 2 is to that certain Agreement between the City of Beverly Hills (hereinafter called "CITY"), and .TACenergy, LLC (formerly Truman Arnold Companies dba TAC Energy) (hereinafter called "CONTRACTOR") dated July 18, 2017 and identified as Contract No. 379-17, as amended by Amendment No. 1 dated November 18, 2019 and identified as Contract No. 628-19 (“Agreement”).
RECITALS
A. CITY and CONTRACTOR entered into an agreement to provide for supply of gasoline and diesel fuels, which was previously amended..
B. CITY and CONTRACTOR desire to further amend the Agreement to extend the termination date, and amend the consideration.
C. Truman Arnold Companies dba TAC Energy has changed its name to TACenergy, LLC.
NOW, THEREFORE, the parties agree as follows:
Section 1. All references in the Agreement to CONTRACTOR shall mean TACenergy, LLC.
Section 2. The Consideration is hereby amended as set forth on the cover page.
Section 3. The Termination Date is hereby extended as set forth on the cover page.
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Section 4. Attachment 1 to Exhibit A, Bid Document No. 17-21, is on file in CITY’s Public Works Department and shall be incorporated herein by reference as if fully set forth herein.
Section 5. A flat rate transportation fee in the amount of $125.00 per delivery shall be added to Attachment 1 to Exhibit A.
Section 6. Exhibit B, Schedule of Payment and Rates shall be amended as attached hereto and incorporated herein.
Section 7. Upon approval of the Assignment by the City Council, the City Manager is authorized to execute the attached “Consent to Assignment” attached hereto and incorporated herein as Exhibit D.
Section 8. Except as set forth in this Amendment, the terms of the Agreement (as previously amended), shall remain unchanged and in full force and effect.
EXECUTED the _____ day of __________________, 20___, at Beverly Hills, California.
CITY OF BEVERLY HILLS
A Municipal Corporation
____________________________
LILI BOSSE
Mayor of the City of Beverly Hills, California
ATTEST:
______________________(SEAL)
HUMA AHMED
City Clerk
[signatures continue]
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CONTRACTOR:
____________________________
FRED SLOAN
Chief Operating Officer
____________________________
JAMES HENRY RUSSELL
Chief Financial Officer
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
_______________________ ____________________________
LAURENCE S. WIENER GEORGE CHAVEZ
City Attorney City Manager
____________________________
SHANA E. EPSTEIN
Director of Public Works
____________________________
MICHAEL V. HENSLEY
Deputy Director of Public Works
____________________________
SHARON L’HEUREUX DRESSEL
Risk Manager
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -6-
B0785-0001\2651775v4.doc
EXHIBIT A
SCOPE OF WORK
CONTRACTOR shall perform the following services to the full satisfaction of CITY:
CONTRACTOR shall provide the gasoline and diesel fuels as more particularly described in Attachment 1 to this Exhibit, Bid Document No. 17-21, incorporated herein by reference as if fully set forth herein.
A. CONTRACTOR shall deliver and deposit to CITY fuel tanks listed on Attachment 1, unleaded minimum 87 octane gasoline, and Ultra-Low-Sulfur (ULS) #2 Diesel fuels regardless of whether deliveries call for full load, short load or pump-off. CONTRACTOR shall deliver the quantities ordered in writing by CITY to the location specified by CITY and shall deposit full load, short load, or pump-off into the specified fuel tank.
B. CONTRACTOR shall ensure that gasoline sold to CITY is unleaded, minimum 87 octane, exclusive of additives and meets or exceeds all rules and requirements of ASTM D439, as last revised, and complies with all rules and requirements of the SCAQMD, state and/or federal regulations.
C. CONTRACTOR shall ensure that diesel fuels sold to CITY are CARB #2 ULSD and shall not exceed 15 parts per million, by weight, sulfur content and meets or exceeds all rules and requirements of ASTM D975, as last revised, and complies with all rules and requirements of the SCAQMD, state and/or federal regulations.
D. CONTRACTOR shall maintain a sufficient stock of unleaded gasoline and ULS #2 Diesel fuel required by this Agreement in the Los Angeles Metropolitan Area to enable delivery of at least 25% of the total capacity listed on Attachment 1 within forty-eight hours of order notification.
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -7-
B0785-0001\2651775v4.doc
EXHIBIT B
SCHEDULE OF PAYMENT AND RATES
CITY shall compensate CONTRACTOR a total not to exceed amount of Eight Million, SeventyFive Thousand Dollars ($8,075,000.00) at the rates set forth in Exhibit A, including Attachment 1, and more particularly described below .
Original Agreement: Not to Exceed $725,000.00 per Fiscal Year (FY).
FY 2017-2018: $725,000.00
FY 2018-2019: $725,000.00
FY 2019-2020: $725,000.00
FY 2020-2021: $725,000.00
Amendment No. 1: No Additional Consideration
Amendment No. 2: Not to Exceed: additional $5,175,000.00 FY 2021-2022 only: Not to exceed $875,000.00
FY 2022-2023: Not to exceed $1,300,000.00
FY 2023-2024 (if extended): Not to exceed $1,500,000.00 FY 2024-2025 (if extended): Not to exceed $1,500,000.00 Total Not to Exceed: $8,075,000.00, more particularly described in Exhibit A including Attachment 1, and this Exhibit B
CONTRACTOR shall submit an itemized statement to CITY for its services performed for the prior month, which shall include documentation setting forth in detail a description of the services rendered. CONTRACTOR shall also submit with each invoice a copy of the OPIS price sheet for District #5, Los Angeles area, for the day fuel is delivered. CITY shall pay CONTRACTOR the amount of such undisputed billing within thirty (30) days of receipt of same.
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -8-
B0785-0001\2651775v4.doc
EXHIBIT D
CONSENT TO ASSIGNMENT
Re: Contract No. 379-17 & 628-19
455 N Rexford Dr
Beverly Hills, CA 90210
(310) 278-1838
City of Beverly Hills under that certain Supply of Gasoline and Diesel Fuels, dated July 18, 2017, by and between City of Beverly Hills and Truman Arnold Companies dba TACenergy (“Assignor”), as amended to date, if applicable (the "Agreement"), consents to the assignment and transfer by Assignor of Assignor's entire right, title and interest in, to and under the Agreement to TACenergy, LLC ("Assignee"), and agrees to acknowledge and treat Assignee as if Assignee were the original party to the Agreement from and after the date of this Consent to Assignment. Specific reference is made to Section 6 of the Agreement. Section 6 requires the prior written consent of City of Beverly Hills for the Agreement to be assigned by Assignor.
From the effective date of this Consent, Assignee acknowledges and accepts the foregoing assignment and delegation and expressly assumes, confirms, and agrees to perform, comply with and observe all of the covenants, agreements, terms, conditions, obligations, duties and liabilities of Assignor under the Agreement regardless of when such covenants, agreements, terms, conditions, obligations, duties and liabilities accrued, arose, or were included together with all outstanding and future obligations of any kind whatsoever related thereto.
City of Beverly Hills and Assignee further agree that Assignee shall be liable for any amounts payable under the Agreement whether arising prior to or after the effective date of this Consent to Assignment, and agrees to look solely to Assignee for satisfaction of the foregoing described obligations under the Agreement.
On and after the effective date of this Consent to Assignment, all payments required pursuant to the Agreement and all communications under the Agreement shall be directed to the Assignee as follows:
TACenergy, LLC
701 South Robison Rd.
P.O Box 1481
Texarkana, TX 75504
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 -9-
B0785-0001\2651775v4.doc
IN WITNESS WHEREOF, the undersigned has executed the foregoing instrument effective as of the _____ day of May, 2022.
UNDERSTOOD, ACKNOWLEDGED AND AGREED TO:
City of Beverly Hills
By:
Name: George Chavez
Title: City Manager
Truman Arnold Companies dba TACenergy
By:
Name: Fred Sloan
Title: Chief Operating Officer
TACenergy, LLC
By:
Name: Fred Sloan
DocuSign Envelope ID: 76609F74-0041-4B2F-85B2-9EDFB9D167B3 Certificate Of Completion
Envelope Id: 76609F7400414B2F85B29EDFB9D167B3 Status: Sent Subject: Please DocuSign: TACenergy (Formerly Truman Arnold Companies dba TAC Energy) (379-17) Amendment 2 Source Envelope:
Document Pages: 9 Signatures: 8 Envelope Originator:
Certificate Pages: 3 Initials: 0 Erin Justus
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.169
Record Tracking
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5/9/2022 2:58:59 PM
Holder: Erin Justus
[email protected]
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Signer Events Signature Timestamp
Sharon L'Heureux Dressel
[email protected]
Risk Manager
Sharon Dressel
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FRED SLOAN
[email protected]
COO
Truman Arnold Companies d/b/a TAC energ
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James Henry Russell
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Deborah R. Hakman for
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Michael V. Hensley
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Shana E. Epstein
[email protected]
Director of Public Works
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Logan Phillippo
[email protected]
Senior Management Analyst
City of Beverly Hills
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George Chavez
[email protected]
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Lili Bosse
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Huma Ahmed
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