Agenda Packets - 1989/06/05 - Laserfiche WebLink

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MEMO TO: Mayor and City Council FROM: Public Works Foreman Ulrich DATE: May 16, 1989 SUBJECT: REVIEW OF PROPOSED 12,000 GALLON LP TANK It has been mentioned in the recent past that Texgas would be drafting a proposal and drawing up plans and specifications for a Possible 12,OOC gallon LP storage tank for the City of Mounds View. On Wednesday, May 3, 1989, Tom Danley, our area salesman for Texgas, along with Bob Heichert, Industrial Sale Representative, presented me with the following proposal. It is a very detailed specification of the plans for installation and describing responsibilities. I will try to briefly summarize this proposal to highlight the major points, but you are more ely review the of a bothlmyselfoand mask questions the[representative from oTexgassal a Tom Danley, who I am inviting to the Agenda Session on June Sth. I• Quantity of the tank will be 12,000 gallons. It•is a used tank that will be completely refurbished by Texgas, its consultants and subcontractors to meet specifications of a brand new tank. 2. 3 4 It was agreed in earlier discussions with Mr. Danley that the City of Mounds View would provide the fencing for the tank and the installation of crushed rock or decorative amgregate for underneath and around the tank. The third point of this proposal is the cost to the City Of Mounds View for these services. The new equipment which would include new fill station, a storage shed, all the necessary safety equipment„ fire extinguishers and complete installation of the tank comes to a sum of $25,731.00. The tank can be leased to the City of Mounds View for $204.00 per month or paid for with an add -on pricing over the next five years of •0816 cents per gallon based on a minimum of 30,OoO gallons per year used. At the end of that five-year period we would then have the Option to purchase a tank for an additional $950.00 or to continue to lease the tank for $25.00 per month for the life of the contract. Should the City deem it not feasible to use up -front monies for a total in excess of $25,000, there is another option available to us for this purchase. When this tank is installed we will purchase LP fuel for the price of .2722 cents per gallon by transport. We can then add .0816 cents per gallon for the tank lease plus .2212 cents per gallon for the equipment purchase. Our net price per gallon becomes 57.5 cents per gallon. We are currently purchasing fuel for 53 cents per gallon and our current budgeted figures for fuel for 1989 can cope with this approximately 4-1/2 cent increase.