Loading...
HomeMy WebLinkAbout108-01 RESOLUTIONI RESOLUTION NO. 108-01 0 A RESOLUTION TO PROVIDE AUTHORITY FOR THE CITY OF FAYETTEVILLE TO ALLOW 30 -DAY CREDIT BILLING FOR FUEL PURCHASES, TO AUTHORIZE PURCHASE OF THE CURRENTLY STORED FUEL AT DRAKE FIELD, TO APPROVE AN INSURANCE CONTRACT FOR THE CITY FOR ITS FIXED BASE OPERATION ACTIVITIES, TO ADD TWO PART-TIME STAFF FOR FIXED BASE OPERATION ACTIVITIES AND TO APPROVE A BUDGET ADJUSTMENT BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council authorizes the City and Airport Administration to allow leaseholders at Drake Field a thirty -day credit billing for purchases of aviation fuel. Section 2. That the City Council authorizes the City to purchase all stored fuel at the Drake Field Fuel Farm at its initial cost. Section 3. That the City Council approves and authorizes the Mayor to sign and pay for an insurance contract covering potential liability for the City for activities associated with it assuming the Fixed Base Operations (FBO). Section 4. That the City Council approves the increase of two part-time staffing positions for the Airport to help with the FBO activities and increased hours of operation of Drake Field. Section 5. That the City Council approves a budget adjustment (attached) to fund all above agreements, contracts, employees and activities as well as the ordinance to purchase aviation fuel from Phillips 66. PASSED and APPROVED this the 31st day of .Tule 2001. APPROV C . � `�� B) V4, DANCOODY_ I , A n - tr Woodruff, City r LI NAME OF FILE: Resolution No. 108-01 CROSS REFERENCE: Ordinance No. 4326 0 07/31/01 Resolution No. 108-01 08/01/01 Branded Aviation Dealer Sales Contract with Phillips 66 Company 08/01/01 Copy of the Aviation Refueler Lease Agreement with Phillips 66 Company 07/31/01 Departmental Correspondence to Mayor Coody and Fayetteville City Council, from Gary Dumas, Utilities Services Department Director, regarding FBO Operations 07/31/01 Staff Review Form NOTES: 30033200 BRANDED AVIATION DEALER SALES CONTRACT L] This contract is by and between PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company ("Phillips") and symbols. A product is "branded" if a brand is on it or its 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. f. "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. Ci The term term of this contract shall begin on 08/01/2001 and shall end on 9;?FSW2992 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 purnhase quantities of Products during a given month in excess of or less than the specified quantities. Buyer shall place orders fcr 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 r' 1 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 6-00 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. 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 8. 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 ll, 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. (ii) 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 part 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. f. 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. 0 11. SIGNS AND EMBLEMS. 0 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 wear and tear excepted. does not market 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 party 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) from time to 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 imprinter(s) 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 all 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. • . • • 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. 18. COMPLIANCE WITH LAW. Buyer shall observe all applicable laws, regulations and orders and shall 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. IQ V. CAA sq S \J a. THE INTERPRETATION AND PERFORMANCE OF THIS NTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF OKLMIOMk EXCEPT FOR ANY RULE OF OKLAHOMA. LAW WHICH WOULD MAKE THE LAW OF ANY OTHER JURISDICTION APPLICABLE. A t 1'ah�aS hereof, te 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, a. 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 breach 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 record&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. .I 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 Dealer 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. f. 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.: --V." Contract 30033200 ATTACHMENT I CONTRACT VOLUMES (QUANITIES IN THOUSANDS OF GALLONS) Product MN IEB MAfl AP MAY JUN JUL AUG SEP OCT Nov ----DEC Total AV GAS / 8 9 9 �--$- UCr- Z / JET FUEL 7 7 7 7 7 , Z 1 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 II 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, , G• 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 3-2-� 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 IV reason Lessee does not lease said refueling equipment, including Al 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. ^^^•••^��TTT DM^*TT Tfl •^rsEIS" WTTHQUT W RPcAl%Ta• AG T^ It is also agreed that Lessee shall not add to or remove from said refueling equipment any equipment or appurtenances without the writtqn 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. Sb. 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. LJ This agreement supersedes and takes agreements, and amendments thereto, between the parties covering the lease the location above stated. the place of all former heretofore entered into of refueling equipment at 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. LIEXECUTED this date, LS PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company CITY OF FAYETTEVILLE ARKANSAS By� Lessee - 3 - Witness 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 Aucust 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 li 46021 51147 Make 1991 Ford 1990 Ford Serial * 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 original lease in both our files. XECUTED this date, /Z (��/ PHILLIPS 66 COMPANY, a division of Phillips Petroleum Company By Le sor 601 Adams Building Bartlesville, OK 74004 - 4 - CITY OF FAYETTEVILLE ARKANSAS ��GG�%11ta1iv� ---I LA Rev 10/96 .. S 0 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. 11. Reimburse Lessor for replacement of parts or equipment lost from refueler equipment, and for all expense incurred for repairs to, and/or replacement 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 incident 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 airport property, or state license fees required because of operations beyond the airport perimeter, where such operations beyond the airport 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 of 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 airport property, but not those necessary operations beyond the airport perimeter, where been authorized by Lessor. 4. Inspect refueling equipment regularly. 5. Have meters calibrated as required by city, cou when refueling equipment is first delivered to refueler operation on because of Lessee's such operations have ity or state authority 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 FAYETTEV&LE � THE CITYOF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Mayor Coody and Fayetteville City Council From: Gary Dumas, Utilities Services Department Director Date: July 31, 2001 SUBJECT: FBO Operations Staff requests approval from City Council to enter into a contract with Phillips Petroleum to provide aviation fuel to Drake Field; provide authority for the City to offer thirty day payment terms for fuel purchases for leaseholders at Drake Field; provide authority for the City to purchase "stored fuel" in the Drake Field fuel farm at the purchasers initial cost; approve an insurance contract to provide insurance coverage for FBO operations; approve two positions to provide staffing for FBO operations; and, approve a budget adjustment recognizing the projected revenue and expenses for the FBO operations. Background: The City of Fayetteville received notice from the current FBO at Drake Field on July 23 that they would be ceasing operations at midnight on July 31. Since that time, staff has been working to assure a seamless transition to a new operation with the City as the FBO operator. Several issues had to be resolved in order for the City to become the FBO operator. These included: Securing necessary insurance coverage for FBO operations, as this is not a normal public activity. Securing necessary equipment for fueling operations such as: Fueling vehicles, proposed to be leased from Phillips 66 for ninety (90) days. Fuel, proposed to be purchased from Phillips 66 on a ninety (90) day contract. Tug, tow bar and ground power unit borrowed from others for a short time until a permanent solution can be secured. Coordinating necessary staffing to provide for extended hours of operation. Securing necessary Council action to implement FBO activities. Staff had been assuming that the current FBO would be ceasing operations at the end of August and making tentative plans for that eventuality. The decision by the current FBO to cease operations at the end of July required that the plans be implemented immediately, requiring City Council action at a Special Meeting. Insurance has been secured tl gh the assistance of the City's insurancroker. Insurance has been placed at the most competitive value available. The City Attorney was involved in discussions concerning coverage and limits. A summary of the policy is attached; the cost is $10,500 for 12 months. In order to obtain fuel and fueling vehicles on short notice, quotes were obtained from vendors providing service in the area. Phillips 66 was the only vendor able to provide all necessary equipment and fuel within the eight (8) days available. Those contracts are attached. The total equipment lease cost will be $5,400 for ninety (90) days. The fuel costs will be approximately $28,175/month, depending upon the cost of the fuel per gallon upon delivery. These contracts are both for ninety (90) days only. Currently, the City is soliciting bids for equipment and fuel for a 12 - month term. This item is anticipated to be on the City Council's agenda on August 21. Other necessary equipment is being borrowed from airport tenants. A permanent solution for this equipment will be developed in the short term. In order to implement the FBO activities in the most efficient manner, staff is requesting the authority to establish the following: Authority: to establish 30 -day credit billing for leaseholders at the airport. This would allow tenants to pay monthly for fuel and commodity usage in a similar manner as the tenants pay for the T -Hanger rental. to purchase from the owners any fuel currently stored within the fuel farm at their initial purchase cost of the fuel. There is currently fuel owned by others in the fuel farm. We anticipate that the FBO will remove their fuel, but some commingled fuel will remain. The FBO delivered the stored fuel to the planes for a flowage fee. It may be necessary, for ease of operation, to purchase this fuel, at least at the outset, rather than maintaining the necessary records for this activity. In order to provide the necessary extended hours of operations for the FBO activities, it is necessary to increase staffing levels at the airport. The additional staffing needs are approximately 60 hours per week. The hours of operation initially will be 6 a.m. to 9 p.m. on weekdays and 6 a.m. to 6 p.m. on weekends. This can be accommodated with two (2) full time equivalent (FTE) positions and the use of existing staff. We anticipate filling these new FTE's with part-time workers. This cost will be approximately $13,273 for the remainder of the year. Fuel sales are anticipated to be 15,000 gallons per month. The sale of fuel and other commodities will generate income to offset expenses. A budget adjustment is attached that establishes the expense and revenue budget for FBO operations on a break even basis. REQUESTED ACTION: Staff recommends Council approval of the attached resolution. C STAFF REVIEW FORM C XX AGENDA REQUEST XX CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council meeting of July 31, 2001 FROM: Gary Dumas Airport Utility Services Name Division Department ACTION REQUIRED: Review and approve items related to City of Fayetteville operations as Fixed Base Operator (FBO) at Drake Field. I) Contract with Phillips Petroleum to provide aviation fuel. 2) Provide authority for City of Fayetteville to allow 30 day credit billing for fuel purchases for leaseholders at airport. 3) Provide authority for City of Fayetteville to purchase stored fuel at Drake Field Fuel Farm at initial costs of fuel. 4) Approve contract for insurance for FBO activities. 5) Approve changes to Airport employee staffing level to add 2 positions to provide staffing for extended hours of operation. 6) Approve budget adjustment recognizing the estimated costs and associated revenues related to FBO operations. COST TO CITY: $(113,699.00) Revenue $ 113,699.00 Expense Cost of this Request Various Account Number -0- -0- Category/Project Budget -0- Funds Used To Date -0- Category/Project Name Airport FBO Program Name Airport Project Number Remaining Balance Fund BUDGET REVIEW: _ Budgeted Item X Budget Adjustment Attached CONTRACT/GRANT/LEASE REVIEW: ,/o, Accounting Manager J Date 7/shalt Cirj Attorney Date Purchasing Officer Date Administrative Services Director GRANTING AGENCY: Internal itor STAFF RECOMMENDATION: Approval of request. Division Head Date Dat (' fork ar ADA Coordinator Grant Coordinator Cross Reference 311O 1 Date Date Date New Item: Yes No Prey Ord/Res #: Orig Contract Date: Orig Contract Number: 0 STAFF REVIEW FORM - Page 2 Description Meeting Date _ Comments: Budget Manager Accounting Manager City Attorney Purchasing Officer ADA Coordinator Internal Auditor Grants Coordinator Reference Comments: