HomeMy WebLinkAboutResolution No. 2026-33KENAI
CITY OF KENAI
RESOLUTION NO. 2026-33
Sponsored by: Administration
A RESOLUTION AUTHORIZING EXTENSION OF A CONTRACT FOR REFUELING SERVICES FOR
CITY FACILITY FUEL TANKS.
WHEREAS, the City previously bid a three-year contract with two one-year extentions for refueling
services for City facility fuel tanks; and,
WHEREAS, Crowley Fuels was the only bidder with a negotiated agreement for 2.203% discount from
the OPIS Rack Average; and,
WHEREAS, Crowley Fuels has requested a modification of the agreement to a $0.31 increase over OPIS
Rack Average due to current fuel prices, operational costs and variable fuel usage; and,
WHEREAS, the Public Works Department is concerned about bidding a new long-term fuel services
contract with variable fuel pricing; and,
WHEREAS, KMC 7.15.070 (b)(6) allows the City to make a purchase by direct negotiation; and,
WHEREAS, extending the pricing for one-year is fair and reasonable with the City reevaluating fuel costs
in 2027; and,
WHEREAS, the contract supplies fuel for various City owned fuel tanks; and,
WHEREAS, it is in the best interest of the City to complete a one-year extension with Crowley Fuels.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section 1. That the City Manager is authorized to execute a contract extension with Crowley Fuels
for $0.31 above OPIS Rack Average for the refueling services for City facility fuel tanks.
Section 2. That this Resolution takes effect immediately upon passage.-,,
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PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS,, " DAY OF �2C
ATTEST:
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Logan Parks, Deputy City Clerk
Approved by Finance:
Henry�H. Knac
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City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.75351 www.kenai.city
MEMORANDUM
TO: Mayor Knackstedt and Council Members
THROUGH: Terry Eubank, City Manager
FROM: Lee Frey, Public Works Director
DATE: April 28, 2026
SUBJECT: Resolution No. 2026-33 - Authorizing Extension of a Contract for Refueling
Services for City Facility Fuel Tanks.
This memo requests Council's approval to complete a one-year extension of a contract to provide
refueling services for City facility fuel tanks.
Resolution 2023-36 authorized a three-year agreement for providing refueling services for the
City. The resolution allows for two one-year extensions to the agreement. Crowley Fuels has
indicated that they cannot extend the agreement without a price adjustment. Crowley was the
only bidder on the contract at the time and what was negotiated for final contract was a 2.203%
discount from the OPIS Rack Average. They are requesting the new rate be $0.31 added to the
OPIS Rack Average.
KMC 7.15.070 (b)(6) allows the City to make purchases by direct negotiation if found to be in the
best interest of the City and sufficient information is available to ensure a fair and reasonable
price. Crowley has operated at the discount for three -years per the contract requirements and
state that not all operational costs were considered at the time of the bid, but they have honored
their price for the length of the contract. The percentage reduction was more difficult for them as
fuel prices increased. In addition, our fuel usage has fluctuated considerably over the length of
the contract as it is extremely variable with snow fall and equipment usage. The City has
concerned about bidding a new long-term contract for fuel services at this time with fuel pricing
being extremely variable. We recommend extending this contract for the one-year term and
reevaluating in 2027.
The Public Works Department recommends a one-year contract extension with Crowley Fuels
with the terms modified to be $0.31 increase to OPIS Rack Average.
Award of this agreement is in the best interest of the City. Council's approval is respectfully
requested.