cc15_169

STAFF REPORT

MEETING

DATE: November 10, 2015

TO: City Council

FROM: Felicia Newhouse, PW Administrative Manager

Shamin Miller, Senior IT Analyst

Cathy Capriola, Assistant City Manager

SUBJECT: ADOPTION OF A RESOLUTION TO PURCHASE A FUEL

MANAGEMENT SYSTEM FOR THE CITY’S VEHICLE FLEET

CEQA DETERMINATION:

The proposed action includes a finding of Exemption from the provisions of the

California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines

Section 15303.

REQUEST

Consider adopting a resolution authorizing the City Manager to award a contract with SCI

Distribution, LLC for not greater than $60,000, to purchase a Fuel Management System for the

City’s vehicle fleet; adopting a categorical exemption pursuant to the California Environmental

Quality Act (CEQA); and amending the Fiscal Year 2015-2016 budget to allocate $30,000 from

the Equipment/Vehicle Replacement Fund (Fund 605) to Capital Improvement Project #511-012.

RECOMMENDATION

Adopt resolution.

BACKGROUND

An automated Fuel Management System is a technology based tool which improves fuel usage

tracking and preventative maintenance scheduling, and allows a variety of reporting features. The

City’s existing Fuel Management Systems are almost 15 years old and have outdated functionality.

Staff research indicates that a modernized system would reduce data input errors and capture

information electronically for improved analytics. Implementing an upgraded Fuel Management

System would also allow for better operational performance, accountability and fuel control.

Current Operations

Each of the City’s two fueling stations – one at the Corporation Yard and one at the Police

Department – has a different fuel tracking system. The Corp Yard fuel system uses metal “barrel”

keys, one each issued to a specific user or group of users. Fleet drivers use this key to access fuel

922 Machin Avenue Novato, CA 94945

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from the Corp Yard gas pump to fill up their fleet vehicle. The key triggers a mechanical meter

that tracks the gallons of fuel pumped. The mechanical meter is read manually every month to

determine the fuel consumption per key. This system is currently at capacity with 50 users or

groups of users (for example, the five Building Division vehicles use the same key).

The limitations to the Corp Yard system are:

(1) The number of gallons used per meter is the only data collected by the fuel station; and

(2) For keys assigned to a group of vehicles, fuel consumption for individual vehicles cannot

be recorded.

The PD fueling station has an electronic meter that tracks the gallons of fuel used per key. In

addition to fuel usage, the PD system can also record vehicle mileage. However, the odometer

reading must be manually input by the user at the time of fueling, or it must be collected manually

at a later date. The PD system produces a singular paper report based on the electronic data

collected at the time of each fueling event (that is, fuel consumption per vehicle and mileage as

entered by the user).

The limitations to the PD system are:

(1) Having users input accurate mileage data is unreliable;

(2) The software used to download the data is severely outdated (electronic reporting is no

longer available, only paper reports); and

(3) Key malfunctions cause the fueling station to disable itself and requires a service call to

be made to maintenance staff to reset the system.

Staff Costs to Maintain Current Operations

Mileage data is important for scheduling preventative maintenance (e.g. oil changes, tire pressure,

fluids inspections, tune-ups), determining warranty coverage, planning for anticipated

replacement, and preventing mileage overages (for example, the EPA’s 1,000-mile annual limit

on the dump truck). This maintenance prevents costlier repairs, breakdowns, and vehicle failures.

With the current systems, odometer readings from the City’s vehicle fleet must be manually

collected and recorded by Maintenance staff each month. Staff spends at least 10 hours over two

to three days per month to collect this data and then manually enters it into an electronic database.

Mileage data from the PD vehicles is collected from PD interns and forwarded to maintenance

staff who spend additional time each month manually entering PD data into the same database.

As a result of the PD system malfunction described above, there is a maintenance staff cost

associated with repairing this system. When a key malfunction causes the fuel station to disable,

no fuel can be dispensed until it is manually reset. Service calls to reset the system during business

hours take about 30 minutes. If the service call is on a weekend, a four-hour call is incurred. Calls

for service during the workday average six times per year and after-hour requests occur

approximately four times per year, totaling approximately 20 work-hours annually for

maintenance staff.

The current fuel system operation is an inefficient and staff-intensive process. Manual collection

of vehicle data by staff would be eliminated with an automated system. In addition to continuing

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maintenance costs, system malfunctions at the PD station create operational inefficiencies as PD

staff must then fuel their vehicles at an alternative service station. Administrative estimates on

excess staff time to operate and repair our current fuel systems are approximately $10,000 per

year.

Preferred Vendor – SCI Distribution

An interdepartmental committee consisting of Public Works, IT and Police staff has completed

evaluations of various Fuel Management solutions available as well as evaluations of the City’s

specific needs. Limitations of the City’s existing outdated systems include:

Inability to track fuel consumption per individual vehicle;

Inconsistent data collection;

Lack of robust data analytics; and

Operational malfunctions requiring repeated manual service calls.

The interdepartmental committee met with and strongly considered three vendors: FuelServ, MSI

Fuel Management, and SCI Distribution. The committee determined that these vendors provide

similar levels of performance and reliability. Therefore, overall cost was the foremost

consideration. Initial and on-going costs for each of the three vendors would be as follows:

Vendor Purchase Price

(Corp Yard & PD

Locations)

Ongoing Costs for

Support/Licensing

FuelServ $61,369 $668/year

MSI Fuel

Management

$59,007 $2,190/year

SCI Distribution $55,240 $1,200/year

Public Works staff would be responsible for installing the new Fuel Management System hardware

on each of the fleet vehicles. The Information Technology Division would be responsible for

installation of the system software.

DISCUSSION

Proposed SCI System Components

The proposed SCI system is comprised of both hardware and software components. Hardware

components include vehicle identification units, nozzle rings (antenna), and pump control units. A

unique vehicle ID unit would be installed on each City vehicle. Nozzle rings and pump control

units would be installed at each of the City’s two fueling stations – one at the Police Department

and one at the Corporation Yard.

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At the fueling station, when the fuel nozzle is inserted into the vehicle’s gas tank, the vehicle ID

sends a signal to the pump control, allowing the fuel to be dispensed to the authorized vehicle.

While the vehicle is fueling, electronic control module (ECM) data is transmitted from the vehicle

to the pump control unit. Communication between the pump control unit and the fuel management

software takes place at the completion of each transaction. The software program compiles the

information gathered during refueling transactions to generate a comprehensive range of reports.

Modern Fuel Management System Benefits

Modern Fuel Management Systems have automated functionality and collect

vehicle data electronically, including but not limited to fuel consumption per

vehicle, odometer readings, total run hours, and engine warning light system alerts.

Automated vehicle data collection would facilitate the scheduling of preventative

maintenance, reducing repair costs and increasing the life of equipment. According

to the Federal Energy Management Program, preventive maintenance:

Reduces equipment and process failures

Increases expected useful life cycle

Generates energy and cost savings

Provides flexibility in the scheduling of periodic maintenance

Results in an estimated 12-18% cost savings over reactive maintenance

The automation of vehicle data collection would allow fleet management staff to

schedule just-in-time maintenance for specific vehicles rather than a generic one-

size-fits-all schedule for all vehicles, or reactive maintenance which may have been avoidable with

more robust data collection methods. With a modernized system, City staff would be able to

monitor fuel use by vehicle type to determine if a vehicle is not running optimally, or if there is an

emissions-related problem that requires attention prior to a vehicle’s regularly scheduled

maintenance. Modern systems reduce costly emergency repairs and extend the life of the fleet.

The City spends over $200,000 annually on fuel to run its vehicle fleets ($238,000 actual in

FY14/15). A conservative estimate of 10% fuel savings resulting from better fuel economy in

optimally maintained vehicles could save the City $20,000 per year (depending on the actual price

per gallon of fuel in a given year). Staff estimates the payback period for this investment could be

realized in as little as three years.

CEQA DETERMINATION

Staff recommends that the purchase and installation of a replacement fuel management system at

the Police Department and at the Corporation Yard gas pumps is categorically exempt from the

requirements of the California Environmental Quality Act (CEQA) and the City of Novato

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Environmental Review Guidelines pursuant to CEQA Guidelines Section 15303, New

Construction or Conversion of Small Structures.

FISCAL IMPACT

A qualified bid of $55,240 has been received from SCI Distribution, LLC. Staff estimates the

hardware solution portion of the system costs to be $28,560 and the software portion of the system

costs to be $26,680. Staff recommends budgeting contingency costs at approximately 10%, for a

total project budget of $60,000. The cost for licensing and support for the new system will be

$1,200 per year and the expected useful life of the system is anticipated to be 10 years.

This project is part of the City’s technology investment efforts. Staff originally anticipated a

software cost of $30,000 as a portion of the technology project budget within the Capital

Improvement Program. However, the addition of the hardware components as described above

increases the overall cost, but also affords the City a key benefit of the Fuel Management System.

Since the vehicle identification units would be installed on all City-owned vehicles and would

contribute to reduced vehicle maintenance costs in the long run, staff recommends funding the

hardware portion of the project with Vehicle/Equipment Replacement Fund (Fund 605) monies.

Due to auction proceeds, interest earnings, loan repayments, etc., there are currently unallocated

funds in the Vehicle/Equipment Replacement Fund that could be used for this purpose. Staff

recommends that there is a direct nexus between funding for fleet vehicles, and proper / timely

maintenance of fleet vehicles. In the future as vehicles are replaced, costs to install vehicle

identification units on new vehicles would be budgeted in the cost of each vehicle and funded over

the useful life of the vehicle.

ATTACHMENTS

1. Resolution

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CITY COUNCIL OF THE CITY OF NOVATO

RESOLUTION NO. ______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

NOVATO AUTHORIZING THE CITY MANAGER TO AWARD

A CONTRACT WITH SCI DISTRIBUTION, LLC TO

PURCHASE A FUEL MANAGEMENT SYSTEM FOR THE

CITY’S VEHICLE FLEET; ADOPTING A CATEGORICAL

EXEMPTION PURSUANT TO THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT (CEQA); AND

AMENDING THE FISCAL YEAR 2015-2016 BUDGET TO

ALLOCATE $30,000 FROM THE EQUIPMENT

REPLACEMENT FUND (FUND 605) TO CAPITAL

IMPROVEMENT PROJECT #511-012

WHEREAS, the City Council of the City of Novato has adopted a final budget for Fiscal

Year 2015-2016; and

WHEREAS, the City of Novato has existing fuel management systems installed at the

Police Department and the Corporation Yard gas pumps which are aged and inefficient; and

WHEREAS, one gas pump is installed at 909 Machin Police Department and a second gas

pump is installed at the 505 Davidson Street Corporation Yard; and

WHEREAS, the City of Novato has the opportunity to improve reporting functions and

operational efficiencies; and

WHEREAS, a request for proposals was issued and SCI Distribution was identified as the

lowest responsible bidder with a cost estimate of $60,000; and

WHEREAS, SCI Distribution will install a fuel management system pump controller at

both pump locations; and

WHEREAS, City staff will install the system hardware on each of the fleet vehicles and

install the system software on the City’s server; and

WHEREAS, the fuel management system project was budgeted in the Technology

Planning and Efficiencies (Project #511-012) project within the Capital Improvement Program;

and

WHEREAS, an additional $30,000 in funds are necessary for the vehicle hardware portion

of the project; and

WHEREAS, funds are available in the Equipment Replacement Fund (Fund 605) that could

be allocated for this purpose; and

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WHEREAS, the City Council has reviewed the project scope and description of the

proposed new fuel management system for the City’s vehicle fleet and has determined that the

project qualifies for a categorical exemption pursuant to California Environmental Quality Act

(CEQA) Guidelines Section 15303, New Construction or Conversion of Small Structures.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Novato does

hereby appropriate $30,000 from the Vehicle Replacement Fund (Fund 605) to Capital

Improvement Project # 511-012.

BE IT FURTHER RESOLVED that the City Council of the City of Novato does hereby

adopt a CEQA categorical exemption for the project and its associated actions based on the

following findings:

Section 1. Record

The Record of Proceedings (“Record”) upon which the City Council bases these findings

and its actions and determinations regarding the approval of the installation of a replacement fuel

management system pump controller at the Police Department and Corporation yard gas pumps

includes, but is not limited to, the staff report, its attachments, City files and records and other

documents prepared for and/or submitted to the City and/or City Council relating to the installation

of a fuel management system for the City’s vehicle fleet, (2) the evidence, facts, findings and other

determinations set forth in this resolution, (3) the City of Novato 1996 General Plan and its related

EIR, (4) all designs, plans, studies, data and correspondence submitted by the City in connection

with the project, (5) all documentary and oral evidence received at public workshops, meetings,

and hearings or submitted to the City during the comment period related to the project, and (6) all

other matters of common knowledge to the City Council including, but not limited to, City, state,

and federal laws, policies, rules, regulations, reports, records and projections related to

development within the City of Novato and its surrounding areas.

The location and custodian of the records is the Novato Public Works Department, 922

Machin Avenue, Novato, California, 94945.

Section 2. CEQA Findings

The City Council hereby adopts the Statement of Findings and Facts set forth below and

attached hereto and incorporated herein by reference. Based thereon and on the Record as a whole,

the City Council hereby finds that no significant environmental effects will be created by the

project and its associated development actions. Therefore, the project shall be determined exempt

from CEQA pursuant to Section 15303, New Construction or Conversion of Small Structures, as

discussed below.

Statement of Findings and Facts

CEQA Guidelines Section 15303, New Construction or Conversion of Small Structures,

exempts projects involving the installation of small new equipment and facilities in small

structures, and the conversion of existing small structures from one use to another where only

minor modifications are made in the exterior of the structure. The installation of fuel management

hardware at the Police Department and Corporation Yard gas pumps is considered to be equivalent

to the installation of small new equipment and facilities in small structures. Accordingly, the

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installation of a fuel management system pump controller at the Police Department and

Corporation Yard gas pumps meets the criteria for a categorical exemption pursuant to CEQA

Guidelines Section 15303.

BE IT FURTHER RESOLVED that the City Council of the City of Novato does hereby

authorize the City Manager to execute an agreement with SCI Distribution, LLC for a not to exceed

amount of $60,000 to purchase a fuel management system for the City’s vehicle fleet to improve

reporting functions and operational efficiencies.

* * * * * *

I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the City

Council of the City of Novato, Marin County, California, at a meeting thereof, held on the 10th day

of November, 2015, by the following vote, to wit:

AYES: Councilmembers

NOES: Councilmembers

ABSTAIN: Councilmembers

ABSENT: Councilmembers

____________________________________

Sheri Hartz, City Clerk

Approved as to form:

____________________________________

City Attorney of the City of Novato

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