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HomeMy WebLinkAbout1990-11-14 91-11 ORDERII Date 11-14-90 ` V Item No. 91-11 amOt, 4athortaiag the City Mareger to a Tetter of In[al item/subject: with the Hanson 0asPany, 1sA, Refitting to the Avfatian Tank Fenn ofd Fuah � System PHIWatval Project at M Responsible Department: City('amgII sysE@8nM@��ByAf:into rmgliawes all carrent State Law. rites wok reTti i 1rc1Wee at a minibuses ties r®val of a number of undargratimal fuel Tani® and the n desiya of tha fuel hydrant: systems to preside for direct pressurized flew fres the above ground storage tames located rear !Adan Street to the aircraft rmrp. Sha City of Banger Issues; the fueling oysters to Bmohl. 'IItia leaw, with Oomn's esistug optfowe will res through the year 2003. Stas lease requires the City to mderT.alz any major wdifiratinre a mplaceareanis Much are reeled he the feeling system. rites City has heart m discussion with Ooesa regarding the improvements; wtrich are aasesaeary. The estimated wet of tt project is agarproic m+=ly $890,000 not including the costa which wlll be interposed by the Amy lbrps Of ©gineers to rearve a mrrbet of mrlergrvwrl tanks and the cost which the fhire Air National OJarli appears willing To urchrtlas to revenue several other I irbargir•*M tames. She FAo®r Corp. bas proposed to share in the mat of r®ving Chas tail® which are the City's es proposad a 50-% exist = return Leaseattenuation. � agreal (pa an attached lett r)p fcertain a _ in regard to fuel supply in rase of shortages cur allacatimre. She attached OrWr would anrhnrim the City Manager to emsut the attartw+t letter of consent. Qe-a this is done, a detailed Jesse reagent will be prepared which will cwaz This PmPnend Possibly doles oiler sterns. This Inas bean reviewd and approved by this Fineness 6>Waittea• sed I mould zermnevd }mor approval. OailorYnevJlead Manager's Comments: Cim f/ ry Mavnyer Associated Information: Order. Letter of Intent, Letter r Assurances: Outline History f theC /E 1 t' he Budget Approval: Finance Ph, Legal Approval: Cisysolich" Introduced For �OPasaage ❑ First Heading Page _ of _ ❑Referral 91-11 A iped to Cs cflor Sawyer, November 14, 1990 CITY OF BANGOR MRE.) Mr{b¢rr- .............wW im G ty y ager_m-�-a-tettar-o£-vrcmt viiTlt the N=mn c oaq , l , Pelatiry to T1E Aviation'14nk Pawn and Fnl Byst= Rem0WXti0a Pmja M Ba Air tt BY the City CousW ofBa MY of Baa . ORDERED. TEAT The City Heas)Pr is hereby attmtised to � a letter of frMent with relaty to renavatima to the Aviation S Pawn and F ira Syste9, a r of Much Sa aUacltaA m aid nem Leat[ of this ariar. 91-11 ORDER Title, IN CITY COUNCIL - A4Cfi0i3Z1DS.91fy. MBP$g¢T. L9.9Y2¢VC¢A.Le[tex of November 14, 1990 Intent with the Exxon Company. USA. Relating to the Pe Aviation Tank Pate and posting System Renovation Pto}btt-kat''/�/Eah OT-1MM ati0nei• irport CITY LEB& GIXF4t✓j �]' Asmtndto ........./A.Co ............. uncilman E)KONCOMPA�NY,, U.S.A. OCT221990 wa.o<nu x.w CITY WNAGFR'S October 19, 1990 J Mr. Edward A. Barrett City Manager 73 Marlon Street Bangor, Maine 04401 Dear Ed: Because of Exxon's role as sole .supplier of aviation fuel to Bangor International Airport ("BIA"), you have asked for certain assurances. We understand the City's desire to protect its interests, and safeguard airport operations and revenue should Exxon be unable to fulfill its contract obligations to supply aviation fuels. We can provide the following assurances. Subject to Exxon's right to allocate and any legal right or obligation to allocate, Exxon will endeavor to provide BIA with aviation fuels at the then current BIA demand level. That in the event Exxon cannot provide the total quantity of aviatIM fuel as set forth above, it will not unreasonably withhold its approval of and/or cooperation with the City's arrangements to ensure the availability of aviation fuel. Exxon is agreeable to negotiate appropriate language into lease revisions to provide the City of Bangor the above assurances. Si n i 3DM:slm 63160 I BANGOR INTERNATIONAL AIRPORT History of City/Exxon "partnership": 1963 Trans East awarded fueling facilities lease - Exxon selected as supplier 1974/5 Trans East bankruptcy 1976 Exxon/City "partnership": proposed sharing of costs/and a sharing of the growth rewards - Plan to satisfy Trans East creditors approved by trustee and court (P $650K from each partner) - Exxon to secure fueling facilities lease for remainder of term (to 12/31/03) - Exxon to sublease FBO to City - Exxon to assign City as agent for fuel storage and into -plane service to airlines - Exxon to furnish heavy duty ramp fueling equipment rent free - Marketing by both "partners" City/Exxon and worldwide affiliates Environmental Regulations Compliance Protect: • Estimate: $BOOK major modification (includes engineering costs) • City (lessor) responsible for major modification/replacement, etc. • Exxon proposes continuing/extending partnership; share cost for 10 year lease extension • City considering options: 1) Accept offer/continue one supplier airport 2) Airport now profitable; could pay total cost Advantage: regain lease on 12/31/03 Disadvantage: ROI very poor vs 50:50 cost sharing offer No added volume/no added revenue 3) Second supplier to pay all/part of cost Advantage to City: lower/no cost Advantage to 2nd supplier: none - Exxon lease allows (and Exxon requires) all available tankage and pipelines - Exxon will not co -mingle turbo fuel Considerations for City Deliberation of 2nd Supplier: 1) 2nd supplier unlikely to add significant volume 2) Minimal/if any/added revenue for City 3) "Duplication" of facilities will add tankage and several large trucks Increasing potential environmental and ramp traffic hazards 0 Volume dilution could cause Exxon to withdraw or renegotiate lease at end of present lease term (12/31/93: next option date) - i.e., no longer provide fueling vehicles for heavy duty ramp - Agent (City) to furnish equipment as do other U.S. airport fuel service agents - Exxon withdrawal could be detrimental to airport fuel sales due to loss of Its worldwide affiliate solicitation EPS:sIm 6232o PRELIMINARY ESTIMATE BANGOR AIRPORT SYS EM MODIFICATIONS (t) PROJECT NX 008 EXPENSE JK DISMANTLE PUMP HOUSE p2 AND 6 - 25 KGAL TANKS $ 9D TOTAL EXPENSE (2) FTO UPITAL CONTRACT BID (installation A lesser equipment) MECHANICAL (PUMPS, PIPING, FILTERS, ETC.) 185 ELECTRICAL CIVIL (FOUNDATIONS, PAVING) 170 PAINTING 10 CONTRACTOR SUBTOTAL fm MAJOR EQUIPMENT (Not provided by Contractor) HYDRANT SHUT DOMN SYSTEM (3) 50 NEW PUMPS 2 5 UPGRADE EXISTING PUMPS 12 VALVES, ETC. 20 MODULAR AVGAS STORAGE UNIT 30 JET CABINET 18 OIL/MATER SEPARATOR 30 MCC. SCALIA, ETC. 35 TAX AND FREIGHT 25 MAJOR EQUIPMENT SUBTOTAL R05 ENGINEERING 50 CONTINGENCY P 155 90 TOTAL CAPITAL $750 GRAND TOTAL FOR PROJECT $89D 1. Does not Include any funds fur an environmental site assessment �or Temediation, rh)cn 8111 beat the expense of,the City Of Bangor 2. ASSURES: <a) PYmphouse 01 and the six associated t5.Oo0 gallon underground tanks are dismantled as planned by the Army Corps of Engineers and the City of Bangor. (b) The single 25,000 gallon "Slop'I tank near Taxiway 8 is dismantled by the Army Corps of Engineers. (c) Pumphouse R3 and the four associated 50,000 gallon underground tanks are dismantled by I the Maine Air National Guard. I I- i 13. Rough Initial estimate of equipment and Installation. lldesism itlll pending I, and bid, not yet requested. i ( 'j 1a51n ryi E*JON COMPANY. USA. As per conversations with Exxon representatives at the meeting on October 15, this letter serves to confirm Exxon's desire to participate in an aviation tank farm and fueling system renovation project at Bangor International Airport in conjunction with the City of Bangor and, in return, celve a lease extension of ten years. Me propose the following basic terms serve as the bases, to guide and conclude such discussions: Purpose of Project: Renovate and upgrade existing tank farm and aviation fuel delivery system t0 eliminate the Use Of underground fuel tanks In accordance with Maine underground storage tank regulations. Project Mark Scope: Dismantle and remove Pumphouse Y2 and the six .. e Yr..I.I ...v..,, Install a new Piping System to bypass Pumphouse <3 allowing direct supply Of Turbo Fuel from the above ground storage tanks to the hydrant system. Install October 19. 1990 o..^rexaea s from their existing position to a site farther! from the taxiway and install a valve pit at the site previously, Mr. Edward A. Barrett City Manager. City of Bangor 73 Harlow Street - Bangor, Maine 04401 Dear Ed: As per conversations with Exxon representatives at the meeting on October 15, this letter serves to confirm Exxon's desire to participate in an aviation tank farm and fueling system renovation project at Bangor International Airport in conjunction with the City of Bangor and, in return, celve a lease extension of ten years. Me propose the following basic terms serve as the bases, to guide and conclude such discussions: Purpose of Project: Renovate and upgrade existing tank farm and aviation fuel delivery system t0 eliminate the Use Of underground fuel tanks In accordance with Maine underground storage tank regulations. Project Mark Scope: Dismantle and remove Pumphouse Y2 and the six associated 25,000 gallon underground storage tanks. Install a new Piping System to bypass Pumphouse <3 allowing direct supply Of Turbo Fuel from the above ground storage tanks to the hydrant system. Install two new INN rpm pumps to supply Turbo Fuel through the hydrant transfer line. Relocate the two main filters from their existing position to a site farther! from the taxiway and install a valve pit at the site previously, occupied by the filter units. Install a new while refueler loadingcabinetfor turbo Fuel near the end of the northern hydrant line.. Install a new oil/water separator to service the Turbo fuel loading cabinet. Install a new modular 12,000 gallon storage end mobile .i refueler loading unit for aviation gasoline i'nl general avtati Od area at the westerly end of the field complete with dlke-wall containment.,Install an aultOsidl'ed e SplonSe/Sh Ut down system fthe hydrant transfer line. Investment: Estimated at $890,000 to be shared equally by Exxon and' the City of Bangor. Detall attached. Thi ii , specifically excludes any. potential Impact,pI ! regulatory Issues, that may.arlse in addition to the I, Maine UGST requirements for the fuel farm_(i.e., water management, leak detections, for the hydrant ilines. etc.) 54 Nr. Edward A. Barrett -P.- October 19, 1990 Potential Project Modification: A potential addition to the project work scope that has been discussed recently is spill containment coupled with an oil/water separator at the tank truck unloading area for Turbo fuel. The cost estimate range for this item Is $75.000 to $100,000. This modification has yet to be designed or endorsed and Is not part of the cost estl mates noted above. Contract Commitment: Exxon to receive a ten-year extension of the existing feet farm lease arrangement. Additionally, certain administrative items within the base and operating agreement will be amended to conform to current operating and reporting practices. Timing: Award demolition and construction contracts Ill go. Revamp lease and operating agreements during 4Q9B._ Estimate completion of tank farm plod ificatlams during 3Q91, Please note that the items described above and shown in the attached engineering cost anima to are preliminary and still subject to change or refinement as the proposed work scope Is reviewed in detail with the potential contractors, regulatory autiwritles, and representatives of the airport. Such reviews can Impact both cost and timing. I - There terms, the scope of this project, and the accompanying lease extension are subject to final approval by With Exxon Senior management and the Banger City Council. However, with your acknowledgment of these terms as the City of Bangor's understanding of the basic Ingredients of our egivimunl, Exxon will proceed wl in the eng1 nee r l ng and con l rdc tO,In ler ac t1 ons required to move this project forward. Please acknowledge by signing below and return this letter to me by November I in order to accomodate the proposed timetable. i - Acknowledged: Cl ty ofBangor Sincerely