CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 7 Section Name: {{section.name}} Account Number: 82-4683 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: May 20, 2024
SUBJECT:
Diesel Fuel Procurement and Delivery Services – Amendment RECOMMENDATION:
Approve Amendment No. 5 to the agreement with Bosco Oil, Inc. dba Valley Oil Company for diesel fuel procurement and delivery to extend the term through June 30, 2025; increase the agreement amount by an amount not to exceed $310,000, for a new total agreement amount of $1,435,000; establish a contingency reserve in the amount of $75,000; and authorize the Public Works Director to execute the amendment in substantially the form presented and issue amendments within the contingency amount.
BACKGROUND:
The City procures the delivery of clear renewable diesel fuel to power the Citywide fleet including dump trucks, street sweepers, sewer flusher trucks, and light-duty maintenance trucks. Additionally, red diesel is used to power off-road equipment, including the Marina Lagoon Pump Station and emergency generators.
In June 2020, a one-year service agreement was awarded by City Council to Bosco Oil, Inc, dba Valley Oil Company for the procurement and delivery of red and clear diesel fuel in a total not-to-exceed amount of $150,000. The approval also allowed for four (4) optional annual extensions of the service with annual increases to the budget and establishment of a contingency reserve.
Since the execution of the 2020 agreement, Amendments 1 through 4 were approved and executed to provide annual term extensions, add funding to the agreement, and account for CPI increases. Based on escalating diesel fuel cost, the original five-year estimate from 2020 of $150,000 per fiscal year was inadequate. Staff reviewed the year-to-date cost and fuel use trends and projected a 100% annual increase in cost compared to the original estimate. Because of this, the annual amended increases varied depending on use needs and market conditions. In addition, approved contingency reserves were also added annually to support any exceedances associated with the approved budget for each fiscal year.
The current total amended agreement amount is $1,125,000.
Staff recommends approval of Amendment No. 5 to extend the agreement to June 30, 2025, and increase the agreement by $310,000 for a new total agreement amount not to exceed $1,435,000. This Amendment No. 5 will be the last optional annual term extension. To address any unanticipated costs, it is recommended to establish a contingency reserve in the amount of $75,000.
BUDGET IMPACT:
Fuel costs are charged back to departments based on actual usage. Funding is included in the operating budgets for the various departments that utilize diesel fuel and any increase in use would be absorbed in their operating budgets.
CITY OF SAN MATEO
ENVIRONMENTAL DETERMINATION:
Approval of Amendment No. 5 is not a project subject to CEQA, because it is a continuing administrative or maintenance activity involving the purchase of supplies. (CEQA Guidelines Section 15378(b)(2).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Amendment No. 5
STAFF CONTACT
Daniel Heffelfinger,
[email protected]
650-522-7366
Deryk Daquigan, Deputy Public Works Director
[email protected]
650-522-7287