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HomeMy WebLinkAboutOrdinance 4326 ORDINANCE NO. 4326 AN ORDINANCE WAIVING THE REQUIREMENTS OF FORMAL COMPETITIVE BIDDING AND APPROVING A BRANDED AVIATION DEALER SALES CONTRACT BETWEEN THE CITY OF FAYETTEVILLE, ARKANSAS AND PHILLIPS 66 COMPANY TO SUPPLY AVIATION GAS AND JET FUEL TO THE FAYETTEVILLE MUNICIPAL AIRPORT (DRAKE FIELD) WITH COSTS TO BE BASED ON ACTUAL FUEL SALES FOR THE NINETY (90) DAY TERM OF THE CONTRACT; AUTHORIZING THE MAYOR TO SIGN SAID CONTRACT; AND DECLARING AN EMERGENCY. WHEREAS, the City of Fayetteville, as owner of the Fayetteville Municipal Airport, owes a duty to ensure the continuous and efficient operation of the airport facilities, and; WHEREAS, on July 23, 2001 the current Fixed Base Operator notified the City that it would cease operations at the airport at midnight July 31, 2001, and; WHEREAS, the Phillips 66 Company was found to be the only fuel provider able to meet the needs of the City upon such short notice, and; WHEREAS, the City Council finds that such circumstances constitute an exceptional situation where competitive bidding is not feasible or practical, and; WHEREAS, the City Council further finds that an emergency exists due to the imminent interruption of fuel sales, and the consequent disruption of general aviation at the Fayetteville Municipal Airport, if said contract were not immediately approved. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 . That the City Council hereby waives the requirements of formal competitive bidding and approves a Branded Aviation Dealer Sales contract between the City Of Fayetteville, Arkansas and Phillips 66 Company to supply aviation gas and jet fuel to the Fayetteville Municipal Airport (Drake Field) with costs to be based on actual fuel sales for the ninety (90) day term of the contract. Section 2. That the City Council hereby authorizes the Mayor to sign said contract with the Phillips 66 Company. Section 3. Emergency Clause. That the City Council, having found that operations at the Fayetteville Municipal Airport would otherwise be unnecessarily disrupted, hereby Ord . 4326 declares this ordinance to be necessary to preserve the public peace, health, safety and welfare, and because of such, an emergency is hereby declared to exist and this ordinance shall be in full force and effect from the date of its passage and approval. PASSED AND APPROVED this 31st day of July 2001 APPROVED: By: Pam t � i �t o *`� D GOODY, Mayor 4 ' fi S a, WOODRUFF, eifVClerk . , v I NAME OF FILE: Ordinance No. 4326 CROSS REFERENCE: 07/31 /01 Ordinance No. 4326 07/31 /01 Copy of the Budget Adjustment Form Staff Review Form 07/27/01 Memo to Gary Dumas, Utilities Service Director, from Kit Williams, City Attorney, regarding Branded Aviation Dealer Sales/Phillips 66 Contract Copy of Branded Aviation Dealer Sales Contract Staff Review Form 08/01/01 Aviation Refueler Lease Agreement (Phillips 66 Company) 07/24/01 Addendum to Aviation Refueler Lease Agreement NOTES : City of Fayetteville, Arkansas • Budget Adjustment Form . t Budget Year Department: Utilities Services Date Requested Adjustment # 2001 Division: Airport 07/31/2001 Program: FBO Project or Item Requested: Project or Item Deleted: Approval of a budget adjustment establishing a FBO program, None. Additional revenue to offset expenses is being authorizing two FTE positions and recognizing additional recognized for this adjustment. expenses and an associated revenue for the FBO program. Justification of this Increase: Justification of this Decrease: The Current FBO is operated by a private company and they have notified the City of their intent to discontinue FBO operations as of close of business July 31 , 2001 . The City must step in to continue to offer fuel and other FBO services for the airfield tenants. Increase Expense (Decrease Revenue) Account Name Amount Account Number Project Number Salaries & Wages 13 , 273 5550 3955 5100 00 Jet Fuel 45 , 000 5550 3955 5213 02 Avgas Fuel 39 , 525 5550 3955 5213 03 Insurance 101500 5550 3955 5311 00 Equipment Rental 5 , 400 5550 3955 5308 03 Decrease Expense (Increase Revenue) Account Name Amount Account Number Project Number Jet Fuel Revenue 59 , 567 5550 0955 4456 02 Avgas Revenue 54 , 112 5550 0955 4456 01 Approval Signatures Budget Office Use Only Re nested By Date Type: A B C OD E B ge Manager Date � Date of Approval CZ rri De ment D' ector Date Posted to General Ledger 7& i o i Want"24- Services Director ate Posted to Project Accounting Date Entered in Category Log Blue Copy: B: g Research / Yellow Copy: Requester H:IBUDGE7IPROJECTSIOTHERIFBO BA. WK4 Contract 03200 • BRANDED AVIATION DEALER SALES CONTRACT This contract is by and between PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company ("Phillips") and CITY OF FAYETTEVILLE ARKANSAS ("Buyer"). WHEREAS, Phillips refines and markets aviation fuels; and WHEREAS, Phillips is willing to sell to Buyer and Buyer is willing to buy such products for resale, subject to the terms hereof; NOW THEREFORE, in consideration of the mutual promises set out below, Phillips , and Buyer agree as follows: 1 . DEFINITIONS. a. "brand" means any and all trademarks, servicemarks, logotypes, emblems and other commercial symbols. A product is "branded" if a brand is on it or its container or is displayed in association with it. b. "contract year" means a period of 12 months beginning on an anniversary date of this contract. C. "estimated maximum quantities" or "EMQ" means quantities of Products which Buyer and Phillips have initially agreed upon, based on their estimates of anticipated availability of Products from Phillips and upon their estimates of anticipated need for Products by Buyer. The parties stipulate that these estimates are necessary and reasonable in order for Phillips to plan supply operations. d. "imprinter" means a Phillips 66 issued seven monetary digit credit card imprinter together with its numbered imprinter plate. e. "Phillips' sign' means any sign, emblem, decal, graphic representation or other rendition of any Phillips brand. I. "Phillips products" means any petroleum products sold under a Phillips brand. The term includes, without limitation, Products as defined in g. below. g. "Products" means those petroleum products sold by Phillips to Buyer under this contract. 2. TERM. to /31 / Zo0k `C , The term of this contract shall begin on 08/01 /2001 and shall end on A7f3H2992, unless otherwise cancelled by either party giving ninety (90) days advance written notice to the other party. 3. SALE AND PURCHASE. a. Subject to other pertinent provisions of this contract, Phillips shall sell, and Buyer shall purchase, .for each contract year of this contract, the Products and estimated quantities identified on Attachment I, attached hereto and incorporated herein by this reference. Upon thirty days written notice, Buyer shall have the right to request a change in the quantities listed on Attachment I to reflect projected actual requirements. If Buyer requests a change for any month which is greater than 15%, the requested change shall be subject to Phillips' consent. Otherwise, such requested changes shall become effective on the date designated by the Buyer. b. Phillips is obligated, subject to availability of fuels and to the terms, provisions and limitations contained in this contract, to supply Products up to but not in excess of, the estimated maximum quantities specified in Subparagraph 3a. above during the respective month(s) of the term; however, the parties recognize that from time to time Buyer may desire to purchase quantities of Products during a given month in excess of or less than the specified quantities. Buyer shall place orders for Products so as to permit deliveries in substantially equal increments through each month. Should Phillips agree to sell Buyer Products during any particular month in excess of the specified quantities for that month, Phillips may at its discretion reduce the specified or permitted quantities in the ensuing month(s) by an amount equal to the excess sold to Buyer. 4. DELIVERIES AND SHIPMENTS. a. Phillips shall deliver Products to Buyer in no less than transport truck lots at or from supply sources designated by Phillips. Deliveries shall be made during the normal operating hours for each such supply source. Delivery shall be on a point of origin or destination basis at Phillips' option. From time to time Phillips may designate for Buyer: (i) different or additional supply sources; (ii) the types or grades of Products available from each supply source; and (iii) the volume of Products to be supplied from each supply source. b. If deliveries are made at supply sources, Buyer shall be responsible for transportation. All transportation equipment that enters any supply source must meet all standards applicable at that supply source. There shall be no split-loading of Products. Only one grade of Product shall be loaded or transported in any transport truck at any one time. C. If Phillips experiences a reduction or unavailability of any grade or type of Products for any reason not limited to causes beyond Phillips' control, Phillips may, but is not obliged to, designate a temporary alternate source of supply and/or offer Buyer temporary substitute Products. Phillips also may reduce the quantity to be delivered to Buyer to the extent necessary for Phillips to allocate equitably its available Products to Phillips' branded customers (including Buyer) and to locations owned by Phillips, directly or indirectly affected by such reduction or unavailability. If this Paragraph is invoked, this contract shall not be extended, but quantities specified herein shall be adjusted accordingly. No notice is necessary to invoke this Paragraph. d. Buyer elects to determine the quantities of Products delivered by the method checked: _(i) Volumetric measurements of Products as actually loaded and measured at the supply source; or 100 Volumetric measurements as determined immediately above but corrected in volume for temperature to a 60F. basis or such other temperature or temperature-compensated basis as may be established under applicable law, in accordance with applicable ASTM-IP Petroleum Measurement Tables. After the first contract year, the Buyer may upon 30 days written notice to Phillips change the method of measurement once each contract year. 5. CLAIMS. a. Buyer shall give Phillips notice of any claims for defect in quality or shortage in quantity within 24 hours after the relevant Product is delivered. Buyer shall inspect delivered Products and, whenever possible, any equipment used to make the delivery in order to determine the cause of any defects or shortage in time to notify Phillips within the time specified above. Buyer's failure to comply with these requirements shall waive any claims by Buyer against Phillips for defect or shortage. b. If Buyer gives notice of defect in quality, Buyer shall give Phillips the opportunity to test the Product in question. If the Product is found to have been contaminated while in Phillips' custody, Phillips shall pay for such test. If the Product is found to have been contaminated after it has left Phillips' custody, Buyer shall pay for such test. 6. PRICE. a. Buyer shall pay Phillips for Products delivered hereunder at Phillips' established price to branded aviation dealers for the particular Products, effective on the date of shipment. b. If Phillips incurs, pays or collects and remits to any taxing authority any tax (other than a tax on overall net income or on capital employed), license fee, inspection fee, or other charge imposed on or measured by gross receipts from Products sold, or on the production, manufacture, transportation, storage, sale, use, or other handling of Products or any component thereof or on this contract, Phillips shall add such tax, fee or charge to the price paid by Buyer. Phillips' failure to add any such tax, fee or charge to the invoice shall not relieve Buyer of liability therefore. Buyer shall reimburse Phillips for any interest or penalty resulting from incorrect or delinquent certification or reporting made by the Buyer. 7. PAYMENT. a. Buyer shall pay Phillips sums due under this contract in the manner and at the location specified by Phillips. sh w . � b. Phillips mayy exte d credit to Buyer on such terms as Phillips shell specify from time to time, and Buyer shall pay Phillips for Products in accordance with such terms and any other payment terms applicable at the time of delivery. Phillips reserves the right to modify or withdraw such credit terms at any time upon notice to Buyer. — it C. Phillips may assess a delinquency charge on all overdue sums owing to Phillips. Such delinquency charge shall be determined in accordance with applicable law and Phillips' established delinquency charge policy in effect on the date of delivery. If Buyer fails to comply with payment requirements, Phillips may suspend deliveries until Buyer pays all sums due hereunder. 8. STANDARDS. a. In addition to compliance with all safety, environmental, and other pertinent laws and regulations, Buyer shall comply with Phillips' standards at all times. Phillips retains the right to revise such standards at any time and from time to time. Buyer shall have a reasonable time after notice thereof to comply with any such revisions. b. Phillips may enter upon Buyer's premises at any time and from time to time during normal business hours for the purpose of inspecting to verify Buyer's compliance with this Paragraph B. 9. CREDIT CARD CHARGES. . a. Phillips is not obligated to continue in effect any credit card program, but while it does Phillips will accept credit card charges made in accordance with the terms of the Phillips 66 Aviation Credit Card Directory by authorized holders of credit cards approved by Phillips at locations authorized to accept such charges. Phillips may revise any part of its Aviation Credit Card Directory from time to time. The Phillips 66 Aviation Credit Card Directory is incorporated herein by reference, and Buyer's violation of its terms is a breach of this contract which entitles Phillips to charge the invoices involved back to Buyer's account. b. If Buyer's credit card transactions are to be processed electronically in conjuction with the Phillips 66 Credit Card Center in Bartlesville, then Attachment II, providing the terms and conditions pertaining to such electronic processing, is attached hereto and incorporated herein by reference. 10. TRADEMARKS AND BRANDS. a. Phillips hereby permits Buyer to use and display Phillips' brands, in accordance with the terms of this contract. Phillips retains all right, title and interest in Phillips' brands, and in any goodwill associated therewith. Buyer acknowledges that Phillips' brand rights are valuable assets. Buyer shall use and display Phillips' brands solely in the manner which Phillips prescribes or approves. b. Upon termination or non-renewal of this contract, Buyer shall immediately stop using in any manner any Phillips signs or brands. Nothing herein shall be deemed a lease or license by Phillips of its brands. C. Buyer shall protect Phillips' brand rights. (i) Buyer shall not allow at any of its Phillips branded locations any activities or merchandise which are illegal or morally offensive or which otherwise bring Phillips' brand into disrepute. Buyer shall not engage in any other activities, whether similar or dissimilar to those described in the previous sentence, which impair or violate Phillips' brand rights. Iii) Buyer shall not sell or offer for sale any petroleum products which are not Phillips products ("other product") under any Phillips brand or any brand confusingly similar to a Phillips brand or under circumstances which would lead the public to believe such products are Phillips products. Buyer shall not (1 ) mix, blend, or dilute any Phillips product with any other product or with any other Phillips product without Phillips' prior consent, (2) sell or offer any other product as being a Phillips product, or (3) alter, contaminate, adulterate or mislabel any Phillips product in any manner. If Buyer violates any pan of this Paragraph, Phillips may terminate Buyer's right to use or display Phillips' signs or brands and may remove any Phillips signs and imprinters which may be in place. d. If Buyer purchases any petroleum products other than Phillips products, Buyer shall keep such products segregated from Phillips products. Buyer shall transport, store, distribute and sell such other products in such manner as to avoid any misunderstanding by the public that such products might be Phillips products. e. Phillips may at any time alter any Phillips brands. If Phillips discontinues marketing any brands of Products in any area where Buyer markets, Phillips shall be relieved of all obligation to sell or deliver such discontinued brands of Products to Buyer; however, any other brands of Products which replace discontinued brands shall be covered by this contract. I. Phillips, its agents and contractors may enter any location of Buyer in order to interview employees, to inspect, test, sample or do other things permitted under this contract, and to remove Phillips signs and imprinters under Paragraphs 11 and 12, respectively. 11 . SIGNS AND EMBLEMS. a. Subject to Paragraph 10, Buyer may inform the public that Buyer has Phillips branded products for sale. For such purpose, Phillips provides to Buyer Phillips' internally lighted plastic Phillips 66 shield sign(s) . b. Phillips shall, at its expense, furnish, install and remove all signs. Buyer shall, at its expense, provide utilities to the base of each sign and maintain and repair such signs as required by Phillips. In the event maintenance and/or repairs to a sign become necessary, Buyer shall perform or cause to be performed such maintenance/repairs within 30 days of the occurrence of the need therefore. C. Buyer shall use such signs solely for the purpose of informing the public that Phillips products are for sale. Buyer shall not sell, encumber, damage or dispose of any Phillips sign. Buyer shall be responsible for . loss or damage to Phillips' signs, normal weer and tear excepted. d. Either party may terminate this contract with respect to Phillips' signs either totally or partially, at any time without cause by giving the other perry at least 30 days prior written notice, and Phillips may remove any signs. e. Buyer may not place any Phillips sign at any location without Phillips' prior consent. 12. IMPRINTERS. a. Phillips shall at its expense provide imprinter(s) to Buyer for the purpose of accepting credit card purchases on credit cards approved for such use by Phillips in accordance with the provisions of Paragraph 9 above. b. Buyer shall not sell, encumber, damage or dispose of any Phillips imprinter. Buyer shall be responsible for loss or damage to Phillips' imprinter(s), normal wear and tear excepted. C. Phillips may replace imprinter(s) fromtimeto time with equipment of like quality. d. Either party may terminate this contract with respect to Phillips' imprinter(s), either totally or partially, at any time without cause by giving the other party at least 30 days prior written notice. Upon termination, Buyer shall return imprinterls) to the location designated by Phillips. e. Buyer shall not place any Phillips imprinter at any location without Phillips' prior consent. 13. QUALITY ASSURANCE OBLIGATIONS. a. Buyer. shall maintain the quality and purity of ail Products sold to it hereunder. Without limiting the generality of the foregoing, Buyer shall check petroleum product tanks for water contamination daily. If Buyer finds any contamination, water or otherwise, Buyer shall immediately take corrective action and shall notify Phillips. b. All motor fuel sold hereunder to Buyer is for use by Buyer in its own vehicles and not for resale. Buyer is placed on notice that Phillips does not market a motor fuel suitable for aviation use. 14. STORAGE TANKS, PIPES AND DISPENSERS. a. Buyer acknowledges that spills, overfills, release or escape of any Products from storage tanks, pipes or dispensers can constitute a serious environmental and safety hazard. Buyer shall observe all laws and regulations pertaining to handling, storage and distribution of Products and to the release or escape thereof. Without limiting the generality of the preceding sentence, Buyer shall observe the laws and regulations pertaining to inventory control, to leak testing and detection, to inspection, certification, and notification of compliance with applicable local, state, and federal laws, regulations, and standards for underground storage tanks, pipes and appurtenances, to construction, installation, operation, maintenance, repair, replacement and closure of tanks, pipes and dispensers, to actions correcting and remediating the escape of Products, and to financial responsibility. b. Buyer shall defend, Indemnify and save Phillips harmless from and against any and all taxes, fees. fines, penalties, liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) for any escape of Products purchased by Buyer, unless such escape is proximately caused in part by the negligence of Phillips, or arising out of any violation of the applicable local, state, and federal laws, regulations, and standards for construction, installation, Inspection, certification, and notification of compliance with respect to underground storage tanks, pipes, and appurtenances. 15. FORCE MAJEURE. a. If either party is prevented from performing any of its obligations under this contract by Force Majeure, such obligations shall be suspended during the period of Force Majeure, and such party shall incur iv no liability for not performing such obligations. Force Majeure does not extend the term of this contract. b. 'Force Majeure' shall include all causes beyond the control of the prevented party, including, without limitation, acts of God, war, orders or requests of government, strike, lockout, labor disputes or shortages, failures, delays or unavailability of transportation, or reduction or unavailability of Products at Buyer's designated supply source or at Phillips' supply source, or reduction or unavailability of any product or material necessary to make Products. 16. RELATIONSHIP OF PARTIES. This is a sales contract. Neither Buyer nor Buyer's employees are joint venturers, partners, agents or employees of Phillips. Neither Phillips nor Buyer is authorized to represent, obligate or bind the other. Nothing in this contract shall be construed as giving Phillips any right to exercise any control over Buyer's operations or over the manner and method by which Buyer conducts its operations. 17. INDEMNIFICATION. Phillips shall not be liable for any acts or omissions of Buyer, its employees or agents. Buyer shall defend, indemnify and save Phillips, Its affiliated companies and their agents and employees harmless from and against any and all liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) for Injury to or death of any person (including, without limitation, Buyer or Buyer's employees, agents, or customers), or for damage to or destruction of any property, where such injury, death, damage or destruction directly or indirectly arises out of this contract, Buyer's business, the storage, handling, transportation, sale or use of any Products purchased hereunder, or the use of signs furnished hereunder. The foregoing obligation to defend, indemnify and save Phillips. Its affiliated companies and their employees and agents harmless shall not apply to incidents proximately caused by the sole negligence of Phillips, its affiliated companies, their employees or agents, nor to Incidents proximately caused in part by the negligence of Phillips, its affiliated companies, their agents or employees. 1B. COMPLIANCE WITH LAW. Buyer shall observe all applicable laws, regulations and orders and shell Indemnify Phillips for any fine, penalty or liabilities, and for any costs related thereto, including, without limitation, court costs and attorneys' fees, arising out of any failure by Buyer to observe any law, regulation or order. 19. APPLICABLE LAW AND CONFLICT RESOLUTION. �' r KQhs4 sl . C a. THE INTERPRETATION AND PERFORMANCE OF THIS NTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWSOF EXCEPT FOR ANY RULE OF elk A6P9MON. LAW WHICH WOULD MAKE THE LAW OF ANY OTHER JURISDICTION APPLICABLE. A r-%'at\scl s o , me u � on • �D C . 20. ASSIGNMENTS. This contract shall inure to the benefit of and shall bind the parties and their respective successors and assigns. Phillips has contracted with Buyer in reliance on the personal skills and qualifications of Buyer or of Buyer's principal owners or officers. Because of the personal nature of this contract, e. if Buyer is a sole proprietor, Buyer shall not assign this contract in whole or in part; b. if Buyer is a partnership, no sale or other transfer of any partner's interest shall be made; or C. if Buyer is a corporation or joint stock company, no sale or other transfer of more than 40% of any class of shares shall be made, without the prior consent of Phillips. Any assignment, sale or transfer without such consent is a breech of this contract. 21 . RECORDS AND AUDIT. Both parties hereto shall maintain a true and correct set of records pertaining to all activities relating to their performance of this contract and all transactions related thereto. The parties further agree to retain all such records for a period of not less than two years after completion of performance hereunder. Any representative(s) authorized by a party may audit any and all such records of the other party at any time(s) during the term of this contract and during the two-year period after completion of performance of this contract. 22. MISCELLANEOUS. a. No waiver by either party of any default by the other party shall be construed as a waiver of any future defaults. b. The headings used in this contract are for convenience only and shall not be used for the purpose of construction or interpretation. When the context so requires, the singular shall include the plural and vice versa. C. This contract contains the entire agreement between the parties and terminates and supersedes all previous communications, representations and contracts (including any prior Branded Aviation oealer Sales Contract) between the parties with respect to the subject matter hereof. This contract does not extinguish any accrued rights under prior contracts. No change in or addition to this contract shall be effective unless in writing and signed by both parties. d. This contract shall not be binding on Phillips until Phillips signs it, and prior sales shall not be construed as a waiver by Phillips of this requirement. After Phillips has signed this contract, any prior sales not otherwise covered by contract shall be deemed to have been made under this contract. e. Wherever this contract grants either party a specific right or remedy with respect to a breach of contract or wrong of the other party, such right or remedy is in addition to any other legal or contractual rights or remedies of the party enjoying the right or remedy. I. Whenever this contract provides that a party shall or may do anything, it shall be at the party's own expense unless otherwise provided. g. If any provision of this contract is contrary to law, such provision shall be deemed either to be severable and stricken from the contract or modified so as to conform to law. If any law requires that this contract include any specific provisions, this contract shall be deemed to include such provisions. Other provisions of this contract shall be given effect to the extent possible. Any provision stricken, modified or added under this Paragraph shall remain stricken or added only so long as the law requiring it remains effective. 23. NOTICES. All notices, consents and other communications (collectively called "notices") provided for in this contract shall be in writing, except, that. notices given under Paragraphs 5, 11 and 12 shall, where practicable, be given orally and confirmed in writing. Written notices shall be properly given if delivered personally, or sent by commercial courier or United States mail, charges and postage prepaid, properly addressed to the appropriate party at the respective address listed below. The date of service of a notice served by mail shall . be deemed to be the date on which the notice is deposited in the United States mail. Phillips: Address: 607 Adams Building - - Bartlesville, OK 74004 Phone No.: 918-661 -6423 Fax No.: 918-661 -1114 Buyer: Address: 4500 S SCHOOL AVE STE F FAYETTEVILLE, AR 72701 Phone No.: 501 -718-7640 Fax No.: 1 Executed this o day of V ` IA oin / PHILLIPS 66 COMPANY, CITY OF FAYETTEVILLE ARKANSAS a division of Phillips Petroleum Company By BY Witness: Witness: A • BRANDED AVIATION DEALER SALES CONTRACT ATTACHMENT II Phillips and Buyer agree that for any of the Buyer's Phillips branded locations, Buyer may secure certain transaction processing services provided pursuant to an agreement ("Agreement") between Phillips and Sears Payment Systems, Inc. ("SPS') or SPS's assignees or successors. The Agreement is subject to cancellation or amendment by the parties to it. The services available to Buyer under the Agreement and Buyer's obligations with respect to transaction processing are set out in the Transaction Processing Policy ('Policy"), which is incorporated herein by reference. Phillips may revise any part of the Policy from time to time. In order to secure transaction processing services for a particular Phillips branded location, Buyer shall send Phillips a completed Request for Automation Services or successor form identifying such location. If such location is owned by a reseller, Buyer shall by contract make such reseller subject to the Policy and to the terms and provisions of this Attachment II with respect to breach of Policy and termination of services. If Buyer violates any terms of the Policy, such violation shall constitute a breach of the contract to which this exhibit is attached. Such breach shall entitle Phillips to charge any invoices involved back to Buyer's account. Phillips is not obligated to continue in effect the Agreement or Policy or any services thereunder. When possible, however, Phillips shall give Buyer at least 30 days prior notice before terminating the Agreement or Policy or services. Buyer may terminate such services by giving Phillips at least 30 days notice. Unless earlier terminated by either Phillips or Buyer, services hereunder shall in any event terminate when the contract to which this Attachment 11 is attached is terminated or not renewed. If any particular location receiving transaction processing services ceases to be a Phillips branded location, such services shall also cease with respect thereto. Buyer shall defend, indemnify, and save Phillips, its affiliated companies and their agents and employees - harmless from and against any and all liabilities, claims, judgments, costs and expenses (including, without limitation, court costs and attorneys' fees) arising out of Buyer's failure to make available a receipt for the final amount of any transaction to any customer of Buyer or of any of Buyer's resellers, or arising out of approvals or denials of credit to the customers of Buyer or any of Buyer's resellers, sten-if-saelttihbigdgs, e O .0 r FAYETTEVI ELE • THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE (, DAVID WHITAKER, ASST. CITY ATTORNEY LEGAL DEPARTMENT TO: Gary Dumas, Utilities Service Director FROM: Kit Williams, City Attorney 6 -'qt� DATE: July 27, 2001 RE: Branded Aviation Dealer Sales/Phillips 66 Contract There appears to be many problems with the Aviation Dealer Sales Contract. Of particular concern to the legal department is: A. #17 Indemnification. I cannot agree to anything after the first sentence. B. #19. I do not know Oklahoma law nor am I licensed to practice in Oklahoma. This is Arkansas and our law should control this contract. C. Attachment II. We cannot be liable for or indemnify Phillips for its own negligence. D. Transaction Processing Policy. It looks like an expensive and bad idea. E. Letter of Understanding. We may not want to carry the liability insurance coverage required by this. What are the costs? Contract 30033200 ATTACHMENT I CONTRACT VOLUMES (QUANITIES IN THOUSANDS OF GALLONS) Product lEe MAR APR rVIAV JUII JUL AUG SEP OCT -M9d--DEC Total AV GAS e s e a —e mss- JET FUEL 7 \T)7 7 a 7.. .g¢— 7i 1.1 Debit Card - A card or access device issued by financial institutions which authorizes an electronic transfer of funds from the cardholder's checking, share draft and/or savings account for payment of authorized purchases. The term Debit Card does not include the MasterCard Debit Card or the Visa Debit Card. 1.2 Credit Card - A card or other evidence of credit, authorizing the cardholder to obtain goods and services on credit. 1.3 Debit Transaction - The process of data capture, authorization and electronic transfer of funds from the cardholder's checking, share draft and/or savings account for payment of authorized purchases. 1.4 Check Transaction - The process of authorization for a check or draft written on the customer's checking, share draft and/or savings account for payment of authorized purchases. 1.5 Credit Transaction - The process of data capture and authorization allowing a customer to use a Credit Card for payment of authorized purchases. 1.6 Card Issuer - Any company which issues a credit card or a Debit Card. 1.7 NSP - Network Service Provider which at present is SPS Payment System, Inc., ("SPS") or any assignee or successor with respect to the NSP's functions related to this Policy. ARTICLE II SERVICES 2.1 Buyer shall receive on-line credit authorizations and data capture for customer purchases made by Phillips Credit Card or other Credit Cards agreed by NSP and Phillips and made in accordance with the terms of Phillips' Credit Card Directory, as applicable at the time of the purchase. As to each Credit Transaction, Buyer shall include account number, expiration date, dollar amount of transaction, date of transaction, location of sale and other data. The total of all such transaction data shall not exceed 250 characters. Buyer shall pass this information on to the transaction processing system. • •1 i •• ••11 • i i d :111 • 1j • 1 .1 1 • t 1 i ' ' • • 1 • 1 0 C 1"eGk;5 Wit ht.. a 2.4 Phillips will communicate to Buyer once during a Phillips working day certain sales data for all Buyer's retail units authorized to receive these services. 2.6 All disputes between Buyer and a customer arising out of any Bcbit, Credit aSck Transaction shall be settled between Buyer and the customer. Buyer shall settle directly with customers for all goods returned or other price adjustments allowed by Buyer. Buyer shall cooperate in any investigation and resolution of any Rabat, Credit erck Transaction initiated by NSP, Phillips, the Card Issuer or its network. 2.7 Buyer shall not reveal to third parties communication messages transmitted between NSP, Phillips and Buyer except (i) to the customer, (ii) to the applicable Card Issuer (or network) as necessary to effectuate or trace a requested Transaction, (iii) to its respective auditors and (iv) as required by law. logos of be 2.8 Buyer shall not use any trade names, trademarks, service marks or Phillips or Phillips affiliates, or NSP or its affiliates, or any Card issuer or network in any manner except as may be authorized in writing by the owner of the tradename, trademark, service mark or logo. • 2.9 Buyer shall use and maintain any information and/or data provided hereunder in such a manner that neither Phillips nor Buyer shall be considered to be a consumer reporting agency under any applicable law or regulation and so providing or requesting a consumer report as defined by any applicable law or regulation. 2.10 NSP has advised that it will make reasonable efforts to ensure that services will be available over 90 percent of the time, but NSP does not guarantee uninterrupted service and therefore neither can Phillips. Buyer therefore releases and indemnifies Phillips and NSP from any loss, cost, expenses or damage suffered by Buyer or Buyer's customers resulting from interruption of services. 2.11 NSP has advised that it will make reasonable efforts to ensure reasonably prompt response time, but NSP does not guarantee response time and therefore neither can Phillips. Buyer therefore releases and indemnifies Phillips and NSP from any loss, cost expense or damage, suffered by Buyer or Buyer's customers resulting from slow response time. 2.12 In no event shall Phillips be liable to Buyer for consequential damages including without limitation loss of profit where such damages are related to or connected with this Policy or any a Credit eak Transaction or lack thereof. U ARTICLE III NETWORK CONFIGURATION 3.1 NSP and Phillips will arrange for leased telephone lines, or satellite communications to agreed -upon retail units at Buyer's expense. 3.2 NSP and Phillips will arrange for the installation of the diagnostic modems or equivalent equipment in the agreed -upon retail units of Buyer. Buyer will provide adequate space and power for the operation of diagnostic modems and will grant NSP and Phillips reasonable access thereto. Buyer shall protect the diagnostic modems from theft, vandalism, fire or other destruction, damage or loss and shall be responsible and will indemnify NSP and Phillips for loss or damage of said modems. Buyer will provide a surge protector of sufficient quality to protect modems, interface units and POS devices from electrical variances considered controllable. 3.3 Buyer shall provide Phillips approved automated point -of -sale equipment at each agreed upon retail unit for purposes of data capture and authorization. 3.4 NSP has reserved the right to change or modify at any time without 0 I notice to Phillips all or part of the network configuration owned or used by NSP. Selection of equipment, hardware, etc. has been left solely to NSP's discretion. Therefore, Phillips reserves similar rights with respect to Buyer. 3.5 NSP has reserved the right to provide similar or identical services to other parties on the same network and on the same leased lines. Therefore, Phillips reserves similar rights with respect to Buyer. Nothing in this Policy prohibits or limits the offering of similar or identical services by NSP or Phillips to other parties. ARTICLE IV EQUIPMENT PROBLEM RESOLUTION Buyer shall maintain and repair both hardware and software provided buyer hereunder. ARTICLE V FEES AND CHARGES 5.1 Buyer shall pay the fees and charges provided for in Schedule "A" attached hereto. Subject to applicable law, Phillips may, at any time, upon not less than ten days' advance written notice to Buyer, change any or all of its fees and/or charges hereunder. 5.2 Buyer agrees to pay all federal, state and local sales, use and excise taxes which may be assessed in connection with services performed hereunder. 5.3 Buyer shall pay any sums due to Phillips in the manner and at the location specified in writing by Phillips. 5.4 Phillips shall submit a monthly invoice to buyer which will itemize for each unit the fees or charges provided for in Schedule "A" incurred there and will state the terms for payment thereof. Phillips shall deduct all network transaction fees from Buyer's total automated sales. • SCHEDULE "A" • OF TRANSACTION PROCESSING POLICY PHILLIPS 66 AUTOMATION PROGRAM FEE SCHEDULE TO INST omottve, are o with Fuel) Autodial (Aviation, Marina, Warehouse Non Fuel, Fast Lube, and Lube Center) 'a V (1) (2) $15.00 MONTHLY FEE (2) THE 2.5% BANK CARD FEE FOR MASTERCARD, VISA, NOVUS, AMERICAN EXPRESS, OPTIMA, DINERS CLUB AND CARTE BLANCHE CARDS INCLUDES THE NETWORK TRANSACTION FEE COST. THE 3% CARD FEE FOR WRIGHT EXPRESS AND VOYAGER, THE 3.5% CARD FEE FOR MULTI SERVICE, AND THE 3.25% CARD FEE FOR AVCARD INCLUDE THE NETWORK TRANSACTION FEE COST. FLEETSHARE IS BASED ON QUARTERLY PRIME RATE, MINIMUM DISCOUNT RATE IS 1.5%. (1) Invoiced one time by location on the applicable monthly invoice. (2) Invoiced monthly to Buyer and itemized by location. n•.•dm•m17111" AVIATION REFUELER LEASE AGREEMENT THIS AGREEMENT, made and entered into this date of August 1, 2001 , by and between PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company, a Delaware corporation, having its principal office in Bartlesville, Oklahoma, hereinafter referred to as "Lessor", and CITY OF FAYETTEVILLE ARKANSAS; 4500 S. School Ave., Ste F; Fayetteville, AR 72701 (#016961). hereinafter referred to as "Lessee". Lessor agrees to deliver and lease to Lessee for Lessee's use on the Drake Field (FYV); Fayetteville, AR , the aviation refueling truck or trucks (hereinafter referred to as "refueling equipment") described as indicated by Addendum to this agreement. This confirms our mutual understanding that the refueling equipment described on the attached Addendum is, as of the above date, leased to Lessee subject to the following terms and conditions: 1. For the use of said refueling equipment during the term hereof, Lessee hereby agrees to pay Lessor the rental set out in the Addendum, plus applicable sales and use tax; said rental to be paid to Lessor in advance on the first day of each month, and to commence as of August 1, 2001 Lessor shall be permitted to increase said rental while this agreement is in effect by giving Lessee at least 60 days' advance written notice of the effective date of said increased rental. In the event of an increase in the rental, Lessee shall have the right to terminate this agreement on the effective date of said increase by giving Lessor at least 30 days' advance written notice of its intention to terminate on said effective date. 2. This agreement shall remain in effect for a primary term of 1-2-� C� months, beginning August 1, 2001 , and for an indefinite period thereafter unless and until either party shall notify the other in writing of its desire to terminate this agreement at least 30 days prior to expiration of the primary term, or prior to any desired termination date thereafter; provided, however, that this agreement may be terminated at any time without notice on account of breach or default of the terms of this agreement. If for any reason Lessee does not lease said refueling equipment, including any additional refueling equipment leased hereunder or substituted ing equipment exchanged at the request of Lessee, for at 3 east months per unit from the time of delivery of each unit, Lessee agrees to pay Lessor a sum equal to twice the cost of delivering said refueling equipment to Lessee. Said sum shall not exceed $ 2,000.00 per unit. - 1 - LA Rev 10/96 3. Said refueling equipment shall in no way become the property of Lessee, or anyone claiming thereunder, and shall be used solely by Lessee on the Drake Field (FYV); Fayetteville, AR for handling the aviation fuel supplied Lessee by Lessor. Said refueling equipment shall not be removed from the above specified location without the prior written consent of Lessor. 4. Prior to the delivery of each unit of refueling equipment covered by this agreement, Lessee shall obtain and maintain in force at all times during the term of this agreement automobile liability insurance with combined single limit of not less than $1,000,000 per accident, or such higher limits as may be required by state or federal law or regulation with Lessor specified as a co-insured under the policy. Lessee shall furnish Lessor with certificates evidencing such insurance. Insofar as collision and comprehensive coverages are concerned, Lessee is responsible for only the first $2,000 of liability for each incident, and Lessee may insure such liability or not as it chooses. Lessor is responsible for all collision and/or comprehensive coverage in excess of $2,000. 5. It is understood and agreed that Lessee will not encumber said refueling equipment or do or permit anything to prejudice the title of Lessor thereto; will comply with all laws, ordinances and regulations applicable to the refueling equipment including the instructions contained in the Product Warning Bulletin attached hereto; and Lessee agrees to release, indemnify and hold Lessor harmless from and against any and all claims, liabilities, loss, obligations and causes of action for injury to or death of any and all persons, or for damage to or destruction of any or all property arising out of or resulting from the condition, existence, use or maintenance of such refueling equipment, including, but not limited to, loss or damage to the refueling equipment, whether or not any of same shall result in whole or in part from the negligence of Lessor or those acting under it. S n n TT DR^*+Ri' n "AG IS„ WITWQUT RT'AS]n ≥JT1 AS mn It is also agreed that Lessee shall not add to or remove from said refueling equipment any equipment or appurtenances without the written consent of Lessor. 6. It is further understood and agreed that each party accepts the applicable responsibilities for operating and maintaining said refueling equipment listed in the attachment hereto, said list being made a part hereof by reference. Lessor shall be permitted access to inspect the refueling equipment at all reasonable times. 7. Lessee agrees that it shall return said refueling equipment to Lessor at the termination of this agreement in as good condition as when Lessee received it, normal wear and tear excepted. -2- LA Rev 10/96 • • Addendum to Contract 5a. It is understood and agreed that said refueling equipment is warranted to safely receive fuel, to safely hold fuel, and to dispense fuel. The refueling equipment should not be used for any other purpose. 5b. Lessor assures that tires on said equipment are in good to new condition at time of delivery. Lessee shall be responsible for normal wear and tear, and any necessary replacement during time of use. �.YIU�H+T'N • 8. This agreement supersedes and takes the place of all former agreements, and amendments thereto, heretofore entered into between the parties covering the lease of refueling equipment at the location above stated. 9. When duly executed, this agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective heirs, executors, administrators, successors and assigns; provided, however, that Lessee shall not assign this agreement in whole or in part without the prior written consent of Lessor; and provided further that Lessor's consent shall not be unreasonably withheld if reasonable requirements imposed by Lessor are first met. If Lessee is a corporation, partnership, or other business entity, the sale, assignment or other disposition or transfer of any interest in such entity shall be deemed an assignment of this agreement or rights there nder for purposes of this paragraph. XECUTED this date, 4A14 PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company By. Lessor tness CITY OF FAYETTEVILLE ARKANSAS By� Lessee �wy Witness - 3 - LA Rev 10/96 July 24, 2001 ADDENDUM TO AVIATION REFUELER LEASE AGREEMENT This is an addendum to an Aviation Refueler Lease Agreement made on August 1, 2001 between Phillips 66 Company, a division of Phillips Petroleum Company, of Bartlesville, Oklahoma ("Lessor"), and CITY OF FAYETTEVILLE ARKANSAS; 4500 S. School Ave., Ste F; Fayetteville, AR 72701 (#016961) . ("Lessee"), updating the description of the equipment under lease for use at the Drake Field (FYV); Fayetteville, AR as follows: Truck # 46021 51147 Make 1991 Ford 1990 Ford Serial M 1FDNF60H7MVA04158 1FDPF70H9LVA45520 Tank Size 1200 gallon 2200 gallon Rental $725.00 mo. $1,075.00 mo. Replacement Value $60,000 $100,000 This updated information should be signed and attached to the 'f original lease in both our files. "-EXECUTED this date, ? /Z'_ __/ PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company Lessor 601 Adams Building Bartlesville, OK 74004 CITY OF FAYETTEVILLE ARKANSAS - 4 — LA Rev 10/96 LESSEE RESPONSIBILITIES 1. Furnish all automotive gasoline for refueling equipment. Do not use Avgas in the refueler. All damage to the engine and related expenses caused by the use of Avgas in the refueler will be paid by the Lessee. 2. Check and maintain sufficient supply of Phillips (or equivalent) recommended lubricating oil in crankcase. 3. Check regularly and maintain sufficient supply of Phillips (or equivalent) lubricants in transmission and differential. 4. Check battery water level weekly. Test and charge battery as necessary and replace when needed. 5. Maintain proper air pressure in tires, and make all necessary tire changes and repairs. Furnish and install all replacement tires: new on the front and recaps on the rear. 6. Check and maintain adequate all season anti -freeze in radiator to protect cooling system properly. Anti -freeze shall be maintained in refueling equipment throughout the year. 7. Keep all fire extinguishers fully charged and in good working order. 8. Pay for meter calibration required by city, county or state authority. (Initial calibration when refueler is delivered to Lessee will be paid by Lessor.) 9. Inspect nozzle screens daily and clean as necessary. Excessive damage to nozzles due to neglect, dragging, etc., will be billed to the Lessee. 10. Furnish any ladders desired by Lessee. il. Reimburse Lessor\ for replacement of parts or equipment lost from refueler equipme t, and for all expense incurred for repairs to, and/or replaceme t of parts of, the refueling equipment necessary because of damage or excess wear to equipment through carelessness, abuse or neglect. Reimburse Lessor for the first $2,000.00 of expenses per incid nt due to accidental damages. 12. Wash and clean refueler as necessary to maintain good appearance. Cab interior and module \compartments should be kept free of combustible material such as oily rags, paper, etc. 13. Pay any airport fees for the privilege of operating the refueling equipment on the airp rt property, or state license fees required because of operations beyond the airport perimeter, where such operations beyond the irport perimeter have been authorized by Lessor. 14. Advise Lessor at once if operation of truck or fueling system indicates need for repairs which are Lessor's responsibility. Cost of local repairs or replacements by others will not be paid or reimbursed by Lessor unless prior authorization is secured from Lessor. Rev 04/98 • LESSOR RESPONSIBILITIES 1. Furnish labor and material for all minor, routine, and/or major maintenance repairs and replacements which are not responsibility of Lessee as stated above. 2. Keep refueling equipment properly painted. 3. Furnish state licenses if required for normal refueler operation on airport property, but not those necessary because of Lessee's operations beyond the airport perimeter, where such operations have been authorized by Lessor. 4. Inspect refueling equipment regularly. 5. Have meters calibrated as required by city, county or state authority when refueling equipment is first delivered to Lessee. 6. Furnish replacement nozzles for the refuelers when necessary due to normal usage. Nozzles that have been damaged by neglect or abuse will be paid for by Lessee. 7. Lessor to pay for accidental damages to the refueler in. excess of $2,000.00. All damage or excessive wear due to carelessness, abuse or neglect will be paid by Lessee. 8. If inspection reveals that refueling equipment is not being properly maintained in accordance with Lessee's above responsibilities, Lessee will be notified of any improper condition and requested to correct it. If condition is not corrected, Lessor shall have the privilege of making any adjustments or replacements necessary due to the carelessness, abuse, or neglect of Lessee, its employees, agents, or sublessees, if any, and of invoicing Lessee for the expense of the work performed. Rev 04/98 • PHILLIPS PRODUCT WARNING BULLETIN This product information and warning bulletin contains important information concerning the safe use and operation of Phillips aviation refueling trucks. It is imperative that you review this bulletin in detail and provide copies to AU personnel at your facility regardless of their job classification or function. YOUR FAILURE TO COMMUNICATE THIS INFORMATION MAY RESULT IN SERIOUS INJURY AND PROPERTY DAMAGE TO YOUR EMPLOYEES, CUSTOMERS AND THIRD PARTIES. Aviation refueling equipment has undergone significant changes in both design and manufacture over the past several years. As technology has improved, and new safety features have been developed and proven to be reliable, Phillips has endeavored to incorporate those features into its vehicles while maintaining the cost of such vehicles at a reasonable level. Phillips also has attempted to preserve the user friendly characteristics of its refueling equipment, including its ease of operation and maintenance. Since equipment may vary from year to year, it is important for you to reacquaint yourself with the operational features of your aviation refueling equipment, including its safety features and your responsibilities as an operator to ensure its safe use and operation. WARNING - Extreme caution must be exercised at all times in the use of aviation refueling equipment to protect against an overflow of aviation fuel ('"avfuel") either from the refueling vehicle itself or from the aircraft it is being used to service. Among other things, AN OVERFLOW OF JET FUEL OR AVIATION GASOLINE CREATES A SERIOUS FIRE RISK. A FIRE RESULTING FROM AN OVERFLOW MAY CAUSE SERIOUS PERSONAL INJURY, INCLUDING DEATH, AND MAY RESULT IN THE LOSS OF VALUABLE AVIATION EQUIPMENT. As the operator, it is your ultimate responsibility to reduce, and eliminate where reasonably possible, the risk of an overflow and the consequent risk of fire. A few relatively easy steps can be taken by you to minimize this problem. While certainly not an exhaustive list, the following describes some of those measures. In addition, you should familiarize yourself and your employees with the following materials pertaining to the safe operation of refueling equipment: the Operator's Manual provided with the vehicle, UNIFORM FIRE CODE Part IV, Article 24 (1982 Edition) and local fire codes, NFPA 407, 385 and 410, FAA ADVISORY CIRCULAR NO. 150/5230-4, API PUBLICATION NO. 1500, ATA SPECIFICATION NO. 103 and NSC Aviation Ground Operation Safety Handbook. You should also acquaint yourself and your employees with the aircraft manual for each type and brand of aircraft which you handle for their specific recommendations for the safe refueling and defueling of that particular aircraft. ONLY PROPERLY TRAINED AND QUALIFIED PERSONNEL ARE PERMITTED TO USE REFUELING EQUIPMENT. No amount of safety equipment can protect against the danger inherent in permitting an untrained and unsupervised person to load, fuel or defuel. Applicable codes and regulations, including the Uniform Fire Code and NFPA, and industry custom and practice, require that all persons using aviation refueling equipment be properly trained and certified by you as qualified to operate such equipment. This includes not only line service personnel who use the trucks daily, but also any other person who is permitted to use a refueling vehicle. All maintenance personnel, for example, should be trained in the use of this equipment since they might be expected to use the vehicle to defuel an aircraft preparatory to maintenance work. It is your responsibility to identify each person whom you know or might reasonably expect to use a refueling vehicle, and to ensure that all such persons are properly trained in its safe use and operation. It also is your responsibility to ensure that untrained persons do D under any circumstances use such equipment. A mistake by an untrained operator can damage the vehicle, destroy property and, more importantly, cost human lives. Loading of the Cargo Tank Most modern jet fuel trucks are equipped with bottom loading features. Many trucks, however, including older model jet fuel trucks and even modern aviation gasoline vehicles are still top loaded. Furthermore, while many models of bottom loaded vehicles come equipped with automatic high level shut off devices, some bottom loaded trucks, particularly older models, do not. Even where bottom loading automatic high-level shutoff is provided, no mechanical system is absolutely fail safe. Like fueling and defueling, the loading of fuel into the cargo tank of the vehicle should be done only by trained and properly supervised personnel. Moreover, loading is a two person operation. One person should be stationed on the ground at or near the point of fuel intake (in the case of bottom loading) while the other operator is stationed on top of the vehicle in the overturn protection area surrounding the manhole cover. The person on top of the truck should at all times have control of a deadman switch to stop the flow of fuel into the cargo tank when it reaches its capacity, or in the case of an overflow or other unusual condition. Both persons should remain at their stations throughout the entire loading procedure. Your Phillips vehicle IS NOT EQUIPPED WITH A LIQUID LEVEL OR SIGHT GAUGE TO INDICATE THE AMOUNT OF FUEL IN THE CARGO TANK. Consequently, it is essential that you monitor the fuel level visually through the top manhole cover. VISUAL OBSERVATION OF THE FUEL LEVEL IN THE CARGO TANK IS ESSENTIAL ON ALL PHILLIPS TRUCKS, - 2 - INCLUDING TRUCKS EQUIPPED WITH BOTTOM LOADING AUTOMATIC HIGH LEVEL SHUTOFF. On trucks equipped with automatic high level shutoff, precheck the system before use and place an operator on top of the vehicle in case the system fails. Avoid loading fuel at night (except in well lighted areas) or under any other conditions that might make the visual observation of the fuel level difficult. Check your vehicle(s) before further use to determine whether it is capable of bottom loading and, if so, whether it is equipped with an automatic high level shutoff system. If a truck is capable of bottom loading, but does not have high level shutoff, Phillips strongly recommends that you add such a system to your vehicle. Although your vehicle can be operated safely without such a system, a reliable automatic high level shutoff is available and will minimize further the risk of an overflow. Please contact Vern Triebel at 918-661-5355 or Mel Girl at 918-661-8403 for further information regarding the addition of such a system to your truck(s). Since the price of the vehicle sold/leased to you did not include the cost of this additional safety feature, you will be responsible for all costs associated with the addition of such equipment. Defuelina The equipment you purchased/leased may be capable of defueling as well as refueling. While defueling procedures evidently occur quite infrequently, IT IS IMPERATIVE THAT ONLY QUALIFIED PERSONNEL PERFORM DEFUELING AS WELL AS REFUELING OPERATIONS. This is especially true when non -line service personnel, such as aircraft or truck mechanics, defuel aircraft as part of the repair process. You should not assume that a certified aircraft mechanic is also trained and qualified to operate a refueling vehicle. DEFUELING IS A TWO PERSON OPERATION. One person should be stationed on top of the truck in the overturn protection area surrounding the manhole cover. The manhole cover should be fully opened to permit this operator to visually observe the fuel level during the entire process of fuel intake. This operator should at all times have under his/her control a deadman switch or other device that will shut down the intake of fuel in the event of any unusual occurrence, including a potential or actual overflow of fuel from the cargo tank of the truck. The other operator should be stationed on the ground at or near the vicinity of fuel outtake from the aircraft. This operator also should have control of a deadman switch or other similar safety device that will shut down the flow of fuel from the aircraft in the event of an unusual condition. Before initiating any defueling procedure you should: 1. Familiarize yourself with the operating plaque attached to the rear of the cargo tank which depicts the piping schematic and operating instructions. This plaque should remain attached to the - 3 - vehicle at all times, and should not be removed, defaced or modified except when so instructed by Phillips and/or the tank manufacturer. 2. Familiarize yourself with the operating instructions that accompany the aircraft, particularly those instructions that relate to defueling. 3. DETERMINE THE AMOUNT OF FUEL IN THE CARGO TANK OF THE TRUCK AND THE AMOUNT OF FUEL TO BE OFFLOADED FROM THE AIRCRAFT BEFORE INITIATING DEFUELING. THE CARGO TANK OF THE TRUCK IS NOT EQUIPPED WITH A LIQUID LEVEL OR SIGHT GAUGE. In order to check the fuel level in the cargo tank, you must visually inspect the fuel level through the manhole cover. Do n2t rely on written records of fuel added to. and removed, from the truck to establish the fuel level as those records may beinaccurate. a. DO NOT DEFUEL INTO A FULL OR PARTIALLY FULL CARGO TANK. Defueling into even a partially full tank of fuel increases the risk of an overflow and creates a substantial risk of fuel contamination. Defueling should be accomplished by using a completely empty refueling cargo vessel, and the fuel should thereafter be discarded according to applicable environmental regulations. Even under these circumstances, Phillips recommends against the practice of returning defueled aviation fuel to the aircraft from which it was taken. In no event should such fuel, either by itself or mixed with fuel from the bulk plant, be added to a different aircraft. Contaminated fuel may create catastrophic equipment failure resulting in the loss of human lives and valuable aviation equipment. b. In all cases ensure that the type of fuel being removed is offloaded into a refueling truck that is designed to store that particular type of fuel (i.e., jet fuel into a jet fuel truck and avgas into an avgas truck). The improper mixing of fuels may result in catastrophic equipment failure. 4. Establish an uninterrupted connection between the aircraft fuel tank(s) and the cargo tank of the truck. Special equipment may be necessary with certain aircraft to make such a connection possible. Refer to the aircraft operators manual for further information. a. Fuel should never be allowed to flow by gravity or otherwise into a sump barrel or other similar container from which it is then offloaded into the cargo tank of a refueling truck. This process poses a significantly greater risk of ignition of the jet fuel, invites operator error and inattentiveness, and increases the risk of particulate contamination of the fuel. 5. If it is necessary for you to defuel into a partially full cargo tank, CAREFULLY COMPARE THE FUEL LEVEL OF THE CARGO TANK TO THE AMOUNT OF FUEL TO BE OFFLOADED INTO IT FROM THE AIRCRAFT. NEVER ADD FUEL TO A FULL TANK. IF YOU HAVE fl DOUBT WHETHER THE - 4 - TANK HAS THE REMAINING CAPACITY TO ACCOMMODATE THE OFFLOADED FUEL YOU SHOULD MQI PROCEED FURTHER UNTIL YOU HAVE REMOVED A SUFFICIENT VOLUME OF FUEL FROM THE CARGO TANK SO THAT THERE IS NO DOUBT THAT IT CAN HOLD THE OFFLOADED FUEL. 6. Determine whether your vehicle is equipped with an automatic high level shutoff that is operational in the defueling mode. VEHICLES MANUFACTURED PRIOR TO 1987 ARE L!QI EQUIPPED WITH AN AUTOMATIC HIGH LEVEL SHUTOFF SYSTEM THAT IS OPERATIONAL DURING DEFUELING. This is true even with those trucks that come equipped with an automatic high level shutoff that operates during bottom loading. a. Precheck the automatic high level shutoff to ensure that it is, fully operational. This system is not fail safe. Furthermore, it is not intended to replace visual inspection of the fuel level to determine whether it is safe to proceed with defueling. It is intended and should be treated as a backup safety system. b. If your vehicle is not equipped with the defueling automatic high level shutoff, and you want to add such a system, it may be possible to retrofit your truck with this added safety feature. Please contact Vern Triebel at 918-661-5355 or Mel Girl at 918-661-8403 for further information. Phillips recommends that you add this system if you intend to use your truck for defueling. Again, however, Phillips is not responsible for the additional cost of adding this system since the original price you paid for this equipment did not include this item. Muffler Location On trucks supplied prior to 1988, the exhaust system, including the muffler and tail pipe, are located underneath the body of the truck chassis in the same place as provided by the truck chassis manufacturer. Most trucks supplied beginning in 1988 have been modified at our request by the tank manufacturer or in the field to relocate the exhaust system so that the tail pipe daylights between the front bumper and front axle, with the tail pipe facing outward toward the front of the truck. This modification is the result of a requirement in some jurisdictions that the exhaust system be so located. It is responsive to a concern of some operators that a muffler located under the chassis behind the cab poses a greater risk as an ignition source of spilled avfuel than a front mounted muffler. If your vehicle is not already equipped with a "front bumper muffler", Phillips recommends that it be retrofitted with such a muffler as soon as practicable. Phillips estimates the cost of such a procedure to be approximately $500.00 or less. This change usually can be accomplished by a local body shop in your area. If you would like more information about relocation of the muffler, please contact Vern Triebel or Mel Girl at the numbers provided above. - 5 v • • In the event you do not or are not able to relocate the muffler, you should be aware of a specific risk that might arise if there is an overflow of fuel from the cargo tank of the truck. The truck is designed such that when the cargo tank reaches its capacity, and fuel continues to be added to it, excess fuel will exit through the vent opening in the top of the tank. This excess fuel collects in the overturn protection area where it is directed to one of two drain lines (one in the rear on the same side as the exhaust, the other at the front of the overturn protection area opposite the exhaust). These drain lines are used primarily to drain water and debris that collect on top of the truck to the ground, thus reducing the risk of water contamination in the cargo tank. They will, however, also drain excess fuel to the same locations underneath the truck chassis. The front drain tube daylights under the truck chassis inside the frame on the side opposite the exhaust. Exhaust from the tail pipe exits in proximity to this front drain pipe. Under the right conditions, it is possible for excess fuel that drains down the front tube to be exposed to a hot tail pipe and/or exhaust discharge. Again, under the right conditions, this spilled fuel could be ignited by exhaust discharge resulting in a fire. This risk can be minimized, but certainly not totally eliminated, by relocating the muffler as described above. Even with the muffler so relocated, there always remains a risk of a catastrophic fire whenever avfuel overflows from the cargo tank or pumping equipment. It is your responsibility as the operator described herein to follow all other directions and instructions set forth in the publications described above that relate to refueling and defueling both. In the event of an overflow of avfuel, you and your employees can take several simple steps to reduce the risk of a fire. First, IF THE ENGINE OF THE TRUCK IS RUNNING DO NQI TURN IT OFF OR IDLE DOWN AS THAT MAY RESULT IN A BACKFIRE OR OTHER DISCHARGE THAT COULD IGNITE THE SPILLED FUEL. IF THE TRUCK'S ENGINE IS NOT RUNNING, DO NQI START IT. STARTING AN ENGINE IN THE VICINITY OF SPILLED AVFUEL MAY CREATE SPARKS OR PROVIDE OTHER IGNITION SOURCES TO THE SPILLED FUEL. Second, you must prepare in advance for the possibility of a fire. The truck is equipped with two fire extinguishers which contain a chemical that has been specially designed to retard and extinguish fires resulting from jet fuel or avgas. Fire extinguishers are useless, however, if they are not periodically checked to ensure that they are functional and can easily be removed from their holders. To enhance the proper use of these extinguishers, Phillips recommends that all personnel, not simply line service personnel, be trained in their proper use, including the way in which they can most easily be removed from their mounting brackets. Phillips also highly recommends that before any - 6 - loading, refueling, defueling or other procedure begins, each of the fire extinguishers be checked and removed from its bracket and placed in a safe location near the operators of the vehicle. This will ensure that the very hazard the fire extinguisher is designed to combat does not prevent the operator from reaching and using this critical piece of equipment. Likewise, the aircraft which you service should be equipped with one or more specially designed fire extinguishers. These extinguishers must also be checked for proper operation and should be placed on or near the aircraft in such a position as to be available for use in the event of a fire. Finally, you should notify local fire department and airport personnel immediately in the event of a spill of avfuel of any magnitude. Do not assume that because the spill is relatively small in size, or because a fire does not occur shortly after the spill occurs, that the danger has subsided. Even small spills can generate sufficient fuel vapors to cause a large fire, and vapors will often linger and migrate, creating a continuing risk of fire long after the initial spill is detected. Spills should never be left unattended until the risk of fire or other damage has complete subsided. Notice of Dangerous Conditions As the daily operator of this equipment you are in the best position to monitor its condition and the conditions under which it operates. If at any time you detect a dangerous or unsafe condition in the equipment, you should immediately discontinue its use and contact Phillips to advise us of this condition and receive our input before proceeding further to use the truck. Phillips does not accept responsibility for your continued use of equipment that you either know, or in the exercise of reasonable care, should know, poses a risk of injury to person or property. We at Phillips are continually striving to improve the quality and safety of all of our products, including aviation refueling equipment. To achieve these objectives, we welcome your comments and criticisms of our refueling vehicles. While we do not warrant that we either will agree with or implement your suggestions, we do promise to give them very careful consideration. rev 10/92 -7- ' i 4 A 1' • STAFF REVIEW FORM Agenda Request x Contract Review _ Grant Review For the Fayetteville City Council meeting FROM Gary Dumas Airport Utilities Service Name Division Department ACTION REQUIRED: Review and approval of Aviation Refueler Lease COST TO CITY: $ less than $15,000 $ Cost of this Request Category/Project Budget Account Number Project Number BrEw Budget Manager Funds Used to Date Remaining Balance Airport FBO Category/Project Name Program Name Fund _Budgeted Item _Budget Adjustment Attached Administrative Services Director CONTRACT/GRANT/LEASE REVIEW: Si��f , /hui , Accounting Manager / Date Cty A to imey Date Y 1 e6l Purchasing Officer Date GRANTING AGENCY: ADA Coordinator Internal Auditor STAFF RECOMMENDATION: Approval of the Resolution and Budget Adjustment Date Date Date Cross Reference Date New Item: Yes No 77�0� Admii trative Services Dire or trative Services Dire Date Prev Ord/Res #: yor ate Orig Contract Date: . STAFF REVIEW FORM • Agenda Request x Contract Review Grant Review For the Fayetteville City Council meeting of FROM: Gary Dumas Airport Utilities Name Division Department ACTION REQUIRED: A contract approval for Branded Aviation Dealer Sales between Phillips 66 Company, and the City of Fayetteville. The cost will be based on fuel sales. COST TO CITY: Cost of this Request Category/Project Budget Account Number Project Number Funds Used to Date Remaining Balance Category/Project Name Program Name Fund _Budgeted Item _Budget Adjustment Attached Administrative Services Director CONTRACT/GRANT/LEASE REVIEW: 1 Accounting Manager Date c Pr0orfw lad C+rrr s (� 112101Q(4- 1 21 019('1/. City Attorney Date Purchasing Officer Date GRANTING AGENCY: ADA Coordinator Internal Auditor STAFF RECOMMENDATION: Approval of the Resolution and Budget Adjustment Date Date Division Head Date Cross Reference -L.-- o ( Dattee New Item: Yes No 1 Da7ate Prey Ord/Res #: 70/ Date Orig Contract Date: Page 2 STAFF REVIEW FORM Meeting Date Comments: Budget Coordinator pp AvL to vQ yr w,(- - Accounting Manager City Attorney Purchasing Officer ADA Coordinator Internal Auditor Reference Comments: Wage • • STAFF REVIEW FORM Meeting Date Comments: Budget Coordinator Accounting Manager -&eouforf # jza Cto+to/ZM ; pec/. City Attorney Purchasing Officer ADA Coordinator Internal Auditor Reference Comments: j