Agenda Item No: K.2
AGENDA REPORT
DATE: December 2, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025-234 PW Pinnacle Petroleum, Inc. Contract Award for Renewable Diesel and 87 Octane Gasoline
Authorizing Execution of a Contract Between the City of Fairfield and Pinnacle Petroleum, Inc. for the Provision and Delivery of Renewable Diesel and 87 Octane Gasoline at the City of Fairfield’s Corporation Yard
Funding Source: Estimated at $751,600; Fleet Management Fund
Contact: David Renschler, (707) 428-7414
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
On September 9, 2025, the City of Fairfield issued an Invitation for Bids (IFB) for the provision and delivery of renewable diesel and 87 octane gasoline to the City of Fairfield’s Corporation Yard.
Staff recommends that the City C ouncil award the Contract ( Contract) for the provision and delivery of fuel to the lowest-priced responsive and responsible bidder, Pinnacle Petroleum, Inc. (Pinnacle) for an estimated one-year contract cost of $751,600.
DISCUSSION
The various operations at the City of Fairfield’s Corporation Yard consume approximately 125,000 gallons of renewable diesel and 125,000 gallons of 87 octane gasoline on an annual basis. FAST, the City of Fairfield’s transit system, consumes approximately 53% of the City’s fuel , while the general fund uses approximately 26% and other non -general fund enterprise account for approximately 21%.
The City’s use of renewable diesel, which is made from waste and residues, reduces its greenhouse gas emissions by up to 80%. These reductions in tailpipe emissions improve local and regional air quality and are part of the City’s overall plan to meet the California Air Resources
Board (CARB) Innovative Clean Transit and Advanced Clean Fleet regulation s. Renewable diesel is a CARB approved transitional fuel that FAST may use while emerging technologies are proven reliable.
Due to the volatility of the fuel market, suppliers generally structure pricing at the Oil Price Information Service (OPIS) rack rate (wholesale) per gallon plus the supplier’s fee per gallon. The OPIS rack rate fluctuates daily and is based on the current cost for a barrel of oil. This pricing structure allows the wholesale cost to reflect changes in the fuel market while the suppliers per gallon fee remains fixed.
On September 9, 2025, the City issued an IFB for the provision and delivery of renewable diesel and 87 octane gasoline to the City of Fairfield’s Corporation Yard.
The Contract defines the scope of services as follows:
1. Provide and deliver renewable diesel meeting CARB’s minimum specifications.
2. Provide and deliver 87 octane gasoline meeting CARB’s minimum specifications.
Based on the average OPIS rack rate and the estimated annual consumption by the City, the suppliers were asked to provide pricing for each fuel type in the format of the OPIS rack rate plus or minus supplier fees.
Eight suppliers responded to the IFB. Those respondents were Pinnacle, Western States Oil, Inc., Mansfield Oil Company of Gainesville, Inc., Hunt & Sons, LLC., Merrimac Petroleum, Inc., SC Fuels, Boyett Petroleum, and Southern Counties Lubricants LLC. Six other suppliers were sent bid documents that did not respond.
Bids were opened on October 6, 2025, with Pinnacle providing the lowest responsive and responsible bid. Pinnacle will supply renewable diesel at the OPIS rack rate minus $0.0921 per gallon and 87 octane gasoline at the OPIS rack rate minus $0.1607 for an estimated one -year contract cost totaling $751,600.
The suppliers’ bid ranking with estimated contract cost based on average annual wholesale fuel cost per gallon is as follows:
Company Renewable Diesel 87 Octane Gasoline 1-Year Estimated Contract Cost
Pinnacle OPIS - $0.0921 OPIS - $0.1607 $751,600.00
Western States Oil, Inc. OPIS - $0.1120 OPIS - $0.1360 $752,200.00 Mansfield Oil Company of
Gainesville, Inc.
OPIS - $0.0724 OPIS - $0.1497 $755,437.50
Hunt & Sons, LLC. OPIS - $0.0900 OPIS - $0.1000 $759,450.00 Merrimac Petroleum, Inc. OPIS - $0.0552 OPIS - $0.1125 $762,237.50 SC Fuels OPIS + $0.02028 OPIS - $0.08872 $774,645.00
Boyett Petroleum OPIS + $0.0299 OPIS - $0.0971 $821,725.00 Southern Counties
Lubricants LLC
OPIS + $0.0400 OPIS + $0.0400 $799,450.00 + Tax
The contract provisions are for one year, with an option to extend for one additional year.
FINANCIAL IMPACT
Costs associated with the provision and delivery of fuel will be paid from the Fleet Management Fund and supported by specific state and federal transportation revenue sources, non -General Fund enterprise accounts, and some General Fund monies. The total estimated cost for the one- year contract is $751,600 based upon the weekly San Francisco OPIS rack price.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
The IFB notice was published to the Daily Republic on September 10, 2025, and September 17, 2025. The IFB process was also published to the City website.
ALTERNATIVE ACTION
The council may choose not to approve the Contract and reject all bids. This is not recommended, however, as the City would be left without a fuel contract and would be required to pay retail rates for fuel.
COORDINATED WITH
City Attorney’s Office
STAFF CONTACT
David Renschler, Fleet Division Manager
(707) 428-7414
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Proposed Contract