Agenda Item: 21
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR
CITY MANAGER APPROVAL:
DATE: May 13, 2025
SUBJECT: AGREEMENT FOR THE PURCHASE AND DELIVERY OF
RENEWABLE DIESEL FUEL
DEPARTMENT: Economic Development
PRESENTER: Adrian Aguilar
RECOMMENDED ACTION
City Council:
1. Approve the use of a cooperative agreement through Sourcewell contract #121-522-TAC through February 10, 2027, for the purchase and delivery of renewable green diesel fuel from TACenergy, LLC, for a total contract amount not to exceed $350,000.
2. Authorize the City Manager or designee to execute a one-year extension, contingent upon renewal of contract #121-522-TAC by Sourcewell, in an amount not-to-exceed $225,000.
3. Authorize the City Manager or designee to execute all contracts and associated documents, or modify the award in the event issues of impossibility of performance arise, subject to City Attorney approval.
BACKGROUND
The City of Santa Clarita (City) is in the process of converting its bus fleet to zero-emission vehicles as the remaining diesel-powered buses reach the end of their useful life. Santa Clarita Transit currently has six diesel buses remaining in the fleet. As the remaining diesel-powered vehicles are retired, the use of diesel fuel will decline, but will not be completely eliminated.
There is also a diesel-powered emergency generator installed at the Transit Maintenance Facility that allows the City to continue critical operations during emergencies. With the remaining diesel-powered buses and the diesel-powered generator, it is necessary for the City to maintain a diesel fuel supply. In order to comply with state regulations and reduce vehicle emissions, the City must continue to purchase renewable green diesel.
After conducting extensive research to find the most competitive pricing and the highest quality
options, staff has determined the most efficient method to purchase renewable green diesel fuel is through cooperative procurements or "piggybacking." The use of "piggyback" purchasing allows the City to place orders against a competitively awarded public agency contract. The City is using the cooperative purchasing agreement with Sourcewell for TACenergy, LLC. This contract, which was awarded on February 9, 2023, was solicited through a competitive request for proposal process and is valid through February 10, 2027, with the option to extend the agreement for one additional year. A copy of the executed cooperative agreement between Sourcewell and TACenergy, LLC, is available in the City Clerk’s Reading File.
Renewable diesel fuel pricing is based on market rates reported by the Oil Price Information Service (OPIS). As noted in the attached Product Sale/Purchase Agreement, the OPIS rate will be based on the renewable diesel fuel daily gross contract average in Los Angeles, California, minus $0.0275 per gallon. Transit staff has performed a fuel use and cost analysis and determined this is the most cost-effective and efficient method for the City to procure renewable diesel based on the projected fuel use.
ALTERNATIVE ACTION
Other action as determined by the City Council.
FISCAL IMPACT
Funds for the initial contract in Fiscal Year 2025-26 and Fiscal Year 2026-27, and the contract extension from July 1, 2027, to February 10, 2028, will be available in Transit Fund (Fund 700) operating budgets, Transit Vehicle Fuel expenditure account 7003700-511102, contingent upon the appropriations of funds by the City Council in the annual budget for such fiscal year.
ATTACHMENTS
Sourcewell RFP #121522 for Fuel Delivery with Related Services TACenergy - Product Sale/Purchase Agreement 2025
Sourcewell Contract #121522-TAC with TACenergy, LLC (available in the City Clerk's Reading File)