ADMINISTRATIVE REPORT
MEETING DATE: June 11, 2025 AGENDA CATEGORY: Consent - Agreements TO: Honorable Mayor and City Council
FROM: Randy McKeegan, Finance Director
DATE: June 2, 2025
SUBJECT: Amendment No. 2 to Agreement No. 2023-303 with Silvas Oil Company, Inc. to expand the scope of work for the annual contract for fuel-bobtail/partial loads to supply R99 or R100 renewable fuel to comply with recent amendments to the Ini-Use Off-Road Diesel-Fueled Fleets Regulation approved by the California Air Resources Board (CARB).
RECOMMENDATION:
Staff recommend approval of the amendment.
BACKGROUND:
On December 13, 2023, the City Council approved the annual contract for the supply of gasoline and diesel fuels, bobtail/partial loads only with Silvas Oil Company, Inc., in the amount of $1,500,000; renewable annually thereafter for four consecutive one-year periods.
Per the terms of the contract, one (1) amendment to increase the contract and/or to extend the contract has been approved as follows:
Amendment 1 approved November 20, 2024; increased compensation by $1,500,000 and extended the term by one year to December 12, 2025.
The diesel fuel furnished under this contract shall meet, and conf orm to, the California Air Resources Board (CARB) for vehicles subject to the In -Use Off -Road Diesel -Fueled Fleets Regulation. Recent amendments approved by CARB to section 2449.1(f) of the In -Use Off -Road Diesel -Fueled Fleets Regulation require all California fleets to procure and only use R99 or R100 renewable diesel fuel in vehicles subject to the In -Use Off -Road Diesel -Fueled Fleets Regulation beginning January 1, 2024.
Currently, vehicles subject to this regulation are fueled by Diesel Ultra-Low Sulfur Red-Dyed fuel.
The current contract was approved by Council on December 13, 2023, before receiving notice of the requirement to procure and only use R99 or R100 renewable diesel fuel for vehicles subject to the In-Use Off-Road Diesel-Fueled Fleets Regulation. In order to comply with the new requirements under the most recent amendment approved by CARB, staff recommend expanding the scope of work to add additional fuel type R99 or R100 renewable fuel for delivery to two existing locations operating vehicles subject to the In -Use Off -Road Diesel -Fueled Fleets Regulat ion. Contractor has agreed to supply R99 or R100 renewable fuel at the same price originally bid for Diesel Ultra-Low Sulfur Red-Dyed.
If approved, Amendment No. 2 will allow the city to comply with the requirement to procure and use R199 or R100 renewable fuel for vehicles subject to the In -Use Off-Road Diesel-Fueled Fleets Regulation and will allow the continuance of the supply of fuel-bobtail/partial loads to the term date of December 12, 2025.
FISCAL IMPACT:
Funds are budgeted in the Equipment Management Fund for this contract.
COUNCIL GOAL:
Innovative and Efficient City Government
ATTACHMENTS:
Amendment No. 2