CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 10 Section Name: CONSENT CALENDAR Account Number: 82-4683 File ID: 26-11372 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: July 20, 2026
SUBJECT:
Diesel Fuel Procurement and Delivery — Amendment
RECOMMENDATION:
Approve Amendment No. 1 to the agreement with Bosco Oil, Inc. DBA Valley Oil Company for Diesel Fuel Procurement and Delivery in the amount of $319,000 for a new agreement total of $719,000; establish a contingency in the amount of $45,600; and authorize the Public Works Director to issue amendments and change orders within the contingency amount.
BACKGROUND:
The City currently operates a fleet of over 300 vehicles and pieces of equipment, including sedans, trucks, street sweepers, tractors, police patrol vehicles, aerial lifts, motorcycles, turf mowers, and sewer trucks (Fleet). The Fleet incorporates various propulsion technologies, such as conventional internal combustion engines (ICE), hybrid electric (HEV), plug-in hybrid electric (PHEV), battery electric (EV), and compressed natural gas (CNG) vehicles. To support these vehicles, the City owns and operates a fueling station at the Corporation Yard. By purchasing diesel fuel in bulk and maintaining an onsite fuel storage and dispensing system for exclusive use of City vehicles and equipment, the City has had significant operational efficiencies and cost savings. The City procures renewable diesel, which is primarily produced from renewable, plant-based sources.
In June of 2025, BOSCO dba Valley Oil Company, was awarded a two-year agreement for diesel fuel procurement and delivery in the amount of $400,000, with funding allocated over two fiscal years at $200,000 a year. This award was based on the lowest proposal obtained through the City’s established Request for Proposal process advertised for Diesel Fuel Procurement and Delivery in April of 2025.
In March 2026, expenses began to exceed the estimated annual allocation of $200,000. In Fiscal Year 2025-26, the expenses totaled approximately $335,000 in the first year of the two-year contract, reducing the amount authorized and available for the second year. This was due to sustained increase of fuel prices throughout the fiscal year, which impacted overall expenditures despite no significant change in fuel consumption levels.
Based on expenditure trends observed during the current fiscal year, it is anticipated that elevated fuel pricing will persist into Fiscal Year 2026-27. To ensure sufficient funding for projected fuel expenditures in Fiscal Year 2026-27, an additional $319,000 in expenditure authority is requested. The increase reflects a continuation of current usage levels paired with conservative fuel price projections, ensuring that sufficient funding is in place to support Citywide operations and mitigate the risk of future shortfalls. If fuel costs exceed current projections and additional funding will be required, staff will return to City Council in Fiscal Year 2026-27 to request additional appropriations as needed.
CITY OF SAN MATEO
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BUDGET IMPACT:
Funding for fuel procurement and delivery is budgeted annually in the Vehicle and Equipment Maintenance Fund. The Facilities and Fleet Division provides fuel services to City departments and recovers associated costs through chargebacks based on actual usage. As a result, fuel expenditures are offset by cost recovery from other departments. Staff will request Council approval of additional budget appropriations, as needed, if realized costs exceed the available budget.
ENVIRONMENTAL DETERMINATION:
This Amendment is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.)
STRATEGIC PLAN ALIGNMENT
This staff repot support the Infrastructure initiative.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Amendment
STAFF CONTACT
Daniel Heffelfinger, Fleet Services Supervisor
[email protected]
(650) 522-7366
Steve Wu, Facilities and Fleet Services Manager
[email protected]
(650) 522-7345
James O’Connell, Deputy Director Public Works
[email protected]
(650) 522-7287