Public Works Agency
www.santa-ana.gov/pw
Item # 14
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
September 15, 2026
TOPIC: Fuel Delivery and Supply Services
AGENDA TITLE
First Amendment to the Agreement with AAA Oil, Inc. for Fuel Delivery and Supply Services (Non-General Fund)
RECOMMENDED ACTION
1. Authorize the City Manager to execute a First Amendment to the agreement with AAA Oil, Inc., for an additional amount of $900,000 to support fuel delivery and supply services for the total contracted amount not to exceed $7,400,000 for the remaining term expiring December 19, 2027 (Agreement No. A-2026-XXX).
2. Approve an appropriation adjustment recognizing $450,000 in the City Yard Operations, Gas & Diesel Dept Charge Back revenue account (No. 08517002- 56001) and appropriate the same amount into the City Yard Operations, Gas & Diesel expenditure account (No. 08517138-63300). (Requires five affirmative votes.)
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The Public Works Agency (PWA) is responsible for purchasing and dispensing fuel at the fueling stations located at the City’s Corporate Yard and Santa Ana Police Department. The City maintains a fleet of over 600 vehicles across City departments that rely on these fueling stations for unleaded gasoline and diesel fuel. The City also uses diesel to power emergency backup generators at critical City facilities and for certain construction projects requiring on-site fuel delivery.
Fuel consumption has increased due to growth in heavy fleet equipment used in construction activity, increased reliance on diesel-powered emergency generators, and fuel requirements associated with major capital improvement and infrastructure projects.
For example, the Memorial Park Aquatic Center project required on-site diesel fuel delivery to support construction equipment and other project operations. Similarly, improvements at the Garthe Water Pump Station required temporary generators to maintain facility operations during electrical rehabilitation. Temporary generators
Fuel Delivery and Supply Services
September 15, 2026
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allowed capital improvement projects to stay on schedule and water distribution facilities to remain operational while permanent electrical improvements were completed, ensuring continuous, uninterrupted delivery of water services to customers.
In addition to increased fuel consumption, fuel prices have experienced significant increases attributed to a combination of global crude oil prices, refinery operations and outages, and other supply and market conditions. In the last three years, the City’s unleaded and diesel fuel costs have risen by 32% and 39%, respectively.
On December 20, 2022, the City Council approved an agreement with AAA Oil, Inc. to provide fuel delivery and supply services for the term beginning December 20, 2022 through December 19, 2025, with one two-year extension option (Exhibit 1). Since that time, AAA Oil, Inc. has provided reliable and consistent service to support the City’s fleet, emergency power systems, and various City projects. Therefore, the City exercised the two-year extension option, which expires December 19, 2027 (Exhibit 2).
The current agreement provides a total annual amount not to exceed $1.3M for a total not to exceed amount of $6.5M for the duration of the contract, including all extensions for routine fuel expenditures. The City has expended over $1.2M during the fourth term of the agreement, with less than $100,000 remaining through December 19, 2026. Due to increasing fuel prices and demand, staff recommends approval of the First Amendment to the agreement with AAA Oil, Inc., increasing the annual not-to-exceed amount by $450,000 for a total amended contract amount not to exceed $7.4M (Exhibit 3). The additional contract capacity will provide sufficient flexibility to address increased fuel prices and meet fluctuating fuel demands associated with City fleet operations, emergency generators, and citywide construction and infrastructure projects.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
With the approval of the requested appropriation adjustment, $450,000 of fuel revenue will be recognized in the City Yard Operations-Gas & Diesel Dept Charge Back revenue account and appropriated for spending in the City Yard Operations-Gas & Diesel expenditure account. All funds will be available for expenditure in Fiscal Year 2026- 2027. Subsequent fiscal year funding will be included in the proposed budgets for City Council consideration.
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Fiscal
Year
Accounting
Unit – Account
No.
(Project No.)
Fund
Description
Accounting Unit,
Account
Description
Amount
REQUESTED AMENDMENT AMOUNT
2026-27 08517138-
63300
City Yard
Operations
City Yard
Operations, Gas &
Diesel
$450,000
2027-28 08517138-
63300
City Yard
Operations
City Yard
Operations, Gas &
Diesel
$450,000
AMENDED TOTAL $900,000
EXHIBIT(S)
1. Agreement with AAA Oil, Inc., A-2022-248
2. Extension of Agreement A-2022-248
3. First Amendment to the Agreement with AAA Oil, Inc.
Submitted By: Rodolfo Rosas, P.E., Acting Executive Director of Public Works Approved By: Alvaro Nuñez, City Manager