HomeMy WebLinkAboutA001 - Council Action Form dated September 8, 2026ITEM #:15
DATE:09-08-26
DEPT:FLEET
SUBJECT:OILS, LUBRICANTS, AND FLUID ANALYSIS CONTRACT FOR FLEET
SERVICES AND CYRIDE
COUNCIL ACTION FORM
BACKGROUND:
Fleet Services and CyRide currently purchase oil and lubricants from a single contract. Oils
and lubricants are purchased to replenish Fleet Service’s parts inventory, which is then
available for servicing City vehicles and equipment as needed. The departments that use the
oils and lubricants from Fleet are billed accordingly as a pass-through cost. CyRide, however,
maintains its own inventory of required oil and lubricants to maintain its vehicles.
On June 28, 2022, City Council awarded a contract for the purchase of oils, lubricants, and
fluid analysis to Diamond Oil Company of Des Moines, Iowa. The initial contract period was
from July 1, 2022 through June 30, 2023. The contract also offered an optional annual
renewal for up to four additional years for a total maximum of five years. Combining oil and
lubricant purchases allows Fleet Services and CyRide to leverage the combined
volumes to receive more favorable pricing. This contract also includes oil analysis kits to
assist staff with properly maintaining vehicles.
On February 1, 2025, Diamond Oil Company was acquired by Heritage Petroleum, LLC
of Evansville, Indiana. As a result of this transition, the contract is now being fulfilled
by Heritage Petroleum. Heritage Petroleum has continued to provide satisfactory products
and service following the transition, and staff has reported no service or delivery issues.
Staff is recommending approval of Year Five of a five-year contract with Heritage Petroleum
for July 1, 2026 through June 30, 2027. Due to fluctuations and instability in the petroleum
and lubricant markets, Heritage Petroleum proposed pricing increases for the
upcoming contract year. Staff reviewed the proposed pricing and successfully negotiated
reductions from the initial pricing proposal on oils and lubricants used in the greatest
quantities. Based on projected FY 2026/27 usage, the Fleet Services operating budget
estimates $15,107 for the purchase of oils, lubricants, and fluid analysis, and the
CyRide operating budget estimates $49,762 for these products and services for a
combined estimated total of $64,869, which represents an overall increase of
approximately 8.6% over the previous fiscal year.
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ALTERNATIVES:
1. Award Year Five of a five-year contract for the purchase of oils, lubricants, and fluid
analysis to Heritage Petroleum of Evansville, IN, in accordance with unit prices bid, for
Fiscal Year 2027.
2. Do not award a contract and direct staff to solicit new bids for the purchase of oils,
lubricants, and fluid analysis.
3. Do not award a contract and direct staff to obtain oils, lubricants, and fluid analysis on an
as-needed basis.
CITY MANAGER'S RECOMMENDED ACTION:
Combining the purchase of oil, lubricant, and fluid analysis kits for Fleet Services and
CyRide allows the City to leverage the combined volumes to receive more favorable
pricing. This approach realizes the lowest possible cost to the City, while ensuring that
equipment needs are available when needed. Therefore, it is the recommendation of the
City Manager to approve Alternative No. 1, as described above.
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