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: 6 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:
Gasoline Fuel Procurement and Delivery – Amendment
RECOMMENDATION:
Approve Amendment No. 5 to the agreement with Pinnacle Petroleum, Inc. for gasoline fuel procurement and delivery to extend the term through June 30, 2025; increase the agreement by an amount not to exceed $515,000, for a new total agreement amount of $2,390,000; establish a contingency reserve in the amount of $100,000; 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 gasoline fuel to power vehicles and equipment in the Citywide fleet and maintains a fueling station at the Corporation Yard. Gasoline fuel is essential for City services.
In June 2020, a one-year service agreement was awarded by City Council to Pinnacle Petroleum, Inc. for the procurement and delivery of gasoline in a total not-to-exceed amount of $250,000. 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 which exercised the annual extensions, added funding to the agreement, and accounted for CPI increases. Based on escalating fuel cost, the original five-year estimate from 2020 of $250,000 per fiscal year was inadequate. Staff reviewed the year-to-date cost and fuel use trends and projected a 75% annual increase. 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 agreement amount is $1,875,000.
Staff recommends approval of Amendment No. 5 to extend the agreement to June 30, 2025, and increase the agreement by $515,000 for a new total agreement amount not to exceed $2,390,000. 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 $100,000.
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 gasoline fuel and any increase in use would be absorbed in their operating budget.
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).)
CITY OF SAN MATEO
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Amendment No. 5
STAFF CONTACT
Daniel Heffelfinger, Fleet Services Supervisor
[email protected]
650-522-7366
Deryk Daquigan, Deputy Public Works Director
[email protected]
650-522-7287