Consider East Side Oil Equipment Lease

The City has been approached by East Side Oil Companies about its interest in utilizing an above ground tank for collection of used motor oil from the public.  The program also includes free collection of used oil filters and antifreeze as well.  No RFP or RFQ was prepared for this potential opportunity nor would one be required, as this is a service that is somewhat unique for this market.  However, a RFQ could be prepared should the City Council feel it is necessary.  It should be noted that Councilmember McGlone is currently an employee of East Side Oil Companies.  Council Member McGlone reports that he has no financial gain of any kind resulting from this potential agreement between the City and East Side Oil Company.  City Attorney Goodrich has been consulted and can respond to any questions regarding this matter.

The collection tank would be provided by East Side Oil Companies at no cost to the City.  The tank itself is 1,990 gallons and East Side Oil Companies provides all the necessary informational signage as well.  They present this opportunity as a partnership between the City and East Side Oil Companies in that they provide the tank, barrels (for oil filters and antifreeze), signage and take care of all necessary permitting through the Minnesota Pollution Control Agency (MPCA). In return, the City provides a location, helps monitor the tank, and cleans up minor spills (East Side Oil Companies would be repsonsible for cleaning up larger spills, which would be anything greater than 4 gallons).  As for the actual collection of used oil, East Side Oil Companies would collect the public used motor oil at no cost.  The City would just need to contact them when the tank is approximately half full (there's an external gauge on the tank that makes this very simple) and they will dispatch a truck to empty the tank.  Through this partnership, East Side Oil Companies would also pay $0.90 per gallon for used motor oil generated by the City.  Presently, the City is paid $0.22 cents per gallon of used motor oil, so this opportunity would generate additional revenue for the City.  There is no cost to the City for the collection of oil filters and antifreeze.

Staff has discussed a couple potential locations for the collection tank and ultimately determined that the most suitable location would be the public works campus.  That location allows staff to monitor the site regularly and presumably would assist in limiting illegal dumping.  Public Works staff has identified a site for the tank within the Public Works campus that should not conflict with its day to day operations.  Should the contents of the tank be contaminated, East Side Oil Companies would still collect the material and would be responsible for its proper disposal.  A small area would need to be improved with an impervious (asphalt or concrete) surface to accomodate the tank (tank size is 7.5 wide by 16.5 feet long).  The tank is also portable, so should it need to be relocated for whatever reason, that would be possible.

As this would be a new offering for Ramsey residents, East Side Oil Companies has also offered to participate in Ramsey's recycling events in the spring and fall.  They indicated that when they enter a new community, it often times takes a while for residents to realize that they can drop off used motor oil throughout the year and thus, at recycling events, the tank tends to fill rather quickly.  East Side Oil Companies has agreed to have a vaccuum truck on site during the recycling events, at least initially, to make sure there is capacity to accomodate all used motor oil that may be dropped off.

Any entity that sells motor oil is required by State Statute to either collect used motor oil or provide information as to closest free collection site.  There are presently limited options to dispose of used motor oil in Ramsey and, to Staff's knowledge, none that are free.  It is not uncommon for residents to inquire about where they can dispose of their used motor oil and this would provide them with a free, local option.  Plus, the City benefits by receiving a larger per gallon payment for its used motor oil.  Staff would recommend entering into an equipment lease agreement with East Sie Oil Companies for use of a collection tank for the public to dispose of used motor oil.