Capital Improvement Program (Page 10.22): The proposed CIP includes $2.6 million to renovate the Witter/Wheeler Fuel Island to allow the City to continue to take advantage of MWCOG bulk fuel purchasing (providing an estimated annual savings of $375,000). What other alternatives were considered for the provision of this service? What would be the expenditure differential to replace the existing fuel island with fleet fuel card purchasing? What would be the estimated fair market value for disposal of the existing property?
The City’s fuel island at Witter/Wheeler provides gasoline and diesel fueling services for over 900 City-owned vehicles and pieces of equipment, including public safety vehicles (Police, Sheriff, Fire apparatus), garbage trucks, street maintenance equipment, park maintenance equipment, and passenger vehicles. Moreover, the fuel island provides fueling services for Alexandria City Public School busses. Finally, the City’s fuel island provides fueling service for passenger vehicles operated by the City’s partner agencies Alexandria Renew Enterprises, ARHA, and DASH.
The City dispenses over 700,000 gallons of fuel per year from the fuel island, ensuring that fuel is consistently available for the continuity of City operations. Due to the volume of fuel required, the multiple types of vehicles and equipment and the requirement for fuel 365 days per year, staff recommends the continued maintenance of the City-owned fuel island at Witter/Wheeler including the needed repairs and renovations that are required at this 35-year-old facility and proposed in the FY 2018-FY 2027 CIP.
What other alternatives were considered for the provision of this service?
Staff evaluated various alternatives to the City’s operation of the fuel island to provide fueling services. These alternatives include:
- Utilizing retail fueling stations; and,
- Utilizing Fairfax County, Arlington County, or WMATA fuel stations.
Staff recommends against these alternatives due to cost increases; distance and time to travel to alternative fueling station locations and loss of City staff productivity; and minimizing fuel availability risks during emergency response events (snow removal, etc.). The City has many pieces of equipment of differing sizes and types that may make the use of a retail fueling location impractical including fire apparatus, construction equipment, snow removal equipment and refuse trucks to name a few. In addition, staff would require access to fuel 365 days per year even during City and/or region-wide emergency situations and inclement weather where fuel either may not be available at retail locations or the retail location may not be open. The City-owned fuel island is maintained and operated to be prepared for all contingencies including an emergency generator, access to fuel via purchasing contract offered through COG, the ability to order and receive unscheduled or emergency deliveries of fuel when required, as well as the availability and use of a fleet maintenance and fueling system to track and provide the data required to estimate fuel requirements and costs for every vehicle and piece of equipment in the City’s fleet at all times.
Staff have historically investigated opportunities to implement and/or utilize other alternative fuels such as natural gas to supplement conventional gasoline and diesel fuel use. However, due to natural gas station locations in other jurisdictions, implementation and infrastructure costs, and the conversion and maintenance costs of natural gas vehicles, this was deemed impractical. In addition, staff – in partnership with the MWCOG – are continuing to look at opportunities to replace applicable conventional fuel vehicles with electric vehicles including the electrical vehicle charging infrastructure. Unfortunately, in the short run, electric vehicle technology is unable to supplement most of the City’s fleet service requirements.
What would be the expenditure differential to replace the existing fuel island with fleet fuel card purchasing?
The City continues to utilize cooperative fuel purchasing contracts offered through MWCOG which generally provides the City with an approximate 20% discount on fuel costs compared to retail. The expenditure differential is equal to an average estimated annual savings of $375,000 per year plus any transaction fees associated with utilizing fleet fuel cards at retail fueling locations. In addition, fleet fuel cards would need to be issued to all vehicle and equipment users which would result in a significant increase in administration time, staffing and responsibility required to track all fuel transactions for over 900 vehicles and pieces of equipment as well as an increased risk for fraud and abuse.
What would be the estimated fair market value for disposal of the existing property?
The estimated fair market value for this property is unavailable at this time. The City must retain the services of a third party appraiser to estimate this City-owned property’s fair market value. Moreover, given this property’s current use includes conventional gasoline and diesel fueling, environmental assessment and cleanup would be required prior to any transfer of ownership or sale of the property which more than likely would result in a reduction of the property’s fair market value. However, the City’s 2017 real estate assessment records valuates the property’s land value at $1,134,910.