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July 11, 2023
ITEM TITLE
Fuel Purchasing Agreement: Approve the Continued Use of the Cooperative Purchasing Agreement Between the City of San Diego and SC Commercial, LLC (Doing Business As the SoCo Group) and Increase the Maximum Contract Amount
Report Number: 23-0142
Location: No specific geographic location
Department: Public Works
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving the continued use of the cooperative agreement between the City of San Diego and SC Commercial, LLC ( doing business as the SoCo Group) and increase the contract maximum not -to- exceed from $4,000,000 to $6,000,000.
SUMMARY
Gasoline and biodiesel are purchased for use in City vehicles and equipment. On August 25, 2020 Council approved Resolution 2020-200 approving the use of a cooperative purchase agreement between the City of San Diego and SC Commercial, LLC (DBA the SoCo Group) for purchase of various motor vehicle fuels and set a maximum not-to exceed amount of $4.0 million. Due to the high fluctuation of fuel prices since the use of the purchase agreement was approved, there is a need to adjust the maximum not-to-exceed amount of $4.0 million to $6.0 million. The contract with SC Commercial, LLC is set to expire on April 30, 2024.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; P a g e | 2
therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The Public Works Department’s Fleet Division purchases gasoline and biodiesel for use in City ve hicles and equipment from SC Commercial, LLC (dba The SoCo Group) via a cooperative purchasing agreement between the City of San Diego and SC Commercial. The cooperative procurement contract was solicited by the City of San Diego as request for proposal number 10089315-18-K, which is available for review in the Office of the City Clerk. Purchasing fuel through the cooperative purchasing agreement was approved by City Council on August 25, 2020 via Resolution 2020-200 (see Attachment 1). This extends the terms and conditions of the agreement between the City of San Diego and SC Commercial to the City of Chula Vista.
The agreement between City and SC Commercial currently continues through April 30, 2024. When Council authorized the use of the cooperative purchasing agreement in 2020, a maximum not-to-exceed amount was set at $4,000,000. Unforeseen circumstances, such as the COVID-19 pandemic combined with unprecedented increases and fluctuations of fuel prices, has resulted in higher than anticipated fuel costs. The City is now nearing the $4.0 million cap that was initially set; staff recommends that the maximum not-to-exceed amount be increased to $ 6.0 million to allow the City to continue to purchas e gasoline and biodiesel from SC Commercial over the remaining life of the contract.
As noted above, the agreement between the City of San Diego and SC Commercial is set to expire in 2024.
Chula Vista staff will evaluate purchasing options in the coming year to determine the most cost -effective procurement method thereafter.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Fuel expenditures have been budgeted in the Central Garage fund. There is no additional fiscal impact from approving this resolution.
ONGOING FISCAL IMPACT
Any purchases as part of this authorization will be incorporated into future budgets as part of the normal budget development process.
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ATTACHMENTS
1. Resolution 2020-200
Staff Contact:
Angelica Aguilar, Assistant Director of Public Works
Alicia Granados, Senior Management Analyst