At Monday's City Commission Meeting, Commissioners considered authorizing the City Manager to execute a purchase agreement with P.B. Hoidale Co., Inc. (Hoidale) for replacing the gas and diesel fuel pumps at the City fuel site; replacing the stand-alone Fuel Management Unit (FMU) with an integrated FMU; and replacing the computer software that records and reports daily usage, tank levels, and leak test results in the amount of $117,779.17 with a five percent contingency of $5,888.96 for a total price not to exceed $123,668.13, as well as authorizing the City Manager to solicit quotes and include a back-up emergency power system (generator and transfer switch) to the fuel site upgrades in an amount not to exceed $10,000.
BACKGROUND: The City fuel site is in 24-hour operation for City and County entities. The City fuel site has 800-1,200 gallons of unleaded and diesel fuel pumped on a daily basis. The fuel site software is used to obtain daily usage, tank levels, leak test results, and any alarm activity, enabling staff to record the information and submit monthly and annual reports to the Kansas Department of Health and Environment. By owning and operating an independent fuel site, the City saves the additional mark up a retail supplier would charge. Based on current prices, the Shop Superintendent estimates a cost saving of about $24,000.00 on unleaded gasoline annually and about $26,000.00 on diesel fuel annually, for a $50,000.00 annual savings. Also, by owning and operating an independent fuel site, the City is not reliant on a commercial business for a critical element (fuel) in their operations.
The existing pumps have outlived their useful life. The fuel pumps themselves are outdated. Both the diesel and unleaded pumps have mechanical gauges as opposed to digital gauges, and the software cannot obtain daily pump usage. The Fuel Management System (FMU) is 19 years old, obsolete, and repair parts are no longer available. The current software is difficult to use, does not always provide accurate information, and consistently requires outside intervention by the servicing contractor's software technical support division due to connectivity issues. The tank monitoring system in place now requires a separate program to read levels and obtain line and tank leak testing data. With replacement, the new system will provide Central Garage staff the needed capability to properly manage the City's fueling operation.
Initial discussions for the failing FMU focused only on the software, but as options were explored, it became apparent that upgrading the pumps, the tank management system, and the reporting software systems should be done at the same time. This integrated system approach will streamline the required daily reporting to the State of Kansas, and will also include a fuel site module and fuel card module. The system's reports will be automatically generated and sent to the Shop Superintendent.
The fuel site module will recognize the vehicle at the fuel site and will link fuel data to the vehicle automatically. The data link will connect with the vehicle when in range and will record the vehicle mileage and report any issues recorded in the vehicle's onboard system (check engine, ABS, etc.). The fuel card module will store vehicle and department information on a key fob, so the user just enters their user identification in order to obtain fuel.
The fuel card system will also enable vehicles to use local vendors for fueling when the City fuel site is unavailable, such as during scheduled or unscheduled power outages. This fuel card system will gather the fuel use information for the specific vehicles and generate the fuel reports for the Shop Superintendent as if they had used the City fuel site.
The existing fuel tanks are made of steel and were installed in 1992. The tanks were corrosion prevention tested on 6/10/2022. The test results indicated the tanks should remain viable for another 25-30 years. Tank life was checked to verify that the tanks could remain in place, and upgrading the fueling system would not be disrupted any time soon by tank replacement.
There are two primary fuel management systems in use in the Salina area: Gasboy and FuelMaster. The City currently uses a FuelMaster system, but staff is recommending the Gasboy system, since this system provides additional functionality and the necessary technology to enable the collection of more accurate data and improved operational efficiency overall.
Gasboy solicited quotes from two vendors that service the Salina area: Hoidale, (which the City has used for the past several years) and Double Check. Double Check did not respond to the request for quotes. Hoidale does service both Gasboy and FuelMaster systems and has three fully-certified Gasboy and FuelMaster technicians in the Salina area. Having local technicians is a benefit for routine service calls and emergency repairs. As a side note, KDOT is also transitioning all their systems to the Gasboy system across the state of Kansas. The recommended Gasboy system will be fully cellular, which will remove the system from the City's computer network. This cellular connection and removal from the City's network will relieve Computer Technology Department staff from having to troubleshoot regular network, firewall, and connectivity issues that have been experienced in the past.
Quotes for the new fuel site equipment and fuel management software are shown in the tables below:
A five percent contingency of $5,888.96 is recommended in case unforeseen issues occur during installation of the new system for a total price not to exceed $123,668.13. The Hoidale quote includes two days of field engineer training on the Gasboy system. If this item is approved, the fuel pumps are expected take at least six months to be delivered for installation. The City fuel site is mission critical and should be repaired as soon as possible.
In recent preparation for a tornado training exercise scheduled with the Saline County Emergency Management office for early fall 2023, it was identifed that the current fuel site does not have a back up emergency power source (generator and transfer switch). Back-up power for the fuel site would be very beneficial to the City in the case of loss of power to the site. This is especially beneficial during an actual emergency response situation. Quotes for a 10-25 KW generator system plumbed with natural gas, WiFi, and an automatic transfer switch are estimated to cost $5,000.00 to $7,000.00 and can be installed for an additional $3,000.00 for a total cost of about $10,000.00. Purchase of back-up power for the fuel site is highly recommended by staff for emergency preparedness.
The purchase of the back-up power source for the fuel site is within the City Manager's purchasing authority (~$10,000.00), but is included herein to provide transparency on the entire scope of enhancments proposed for the fuel site.
FISCAL NOTE: Because the current City fuel site equipment is inadequate, inefficient, and obsolete and is critical to mission success, funding in 2023 is necessary to alleviate the long lead time on materials and commence with the work as soon as possible. The City Manager and Finance Director are recommending funding for this item be paid for out of the Vehicle and Equipment Capital Reserve Fund. The current fund balance is approximately $930,000.00. Ongoing monthly costs will be budgeted in the future out of the Central Garage Fund.
If approved as part of the fuel site upgrade, City staff would solicit quotes for the back-up power source (generator and transfer switch) for the fuel site in accordance with the City purchasing policy. Funding for this item would also be from the Vehicle and Equipment Capital Reserve Fund. The funding request for this item is $10,000.
The boilerplate language on the Hoidale contract was not in compliance with City standards, so a signed contract addendum was prepared by the City Attorney's office that corrects the deficiencies and is included for additional information.
The motion passed 5-0.