City Council
Report
City Council Meeting: February 27, 2024
Agenda Item: 5.C
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To: Mayor and City Council
From: Matthew Hallock, Fire Chief, Fire Department
Subject: Authorization to Issue Purchase Orders with Falcon Fuels, Inc. for the Purchase and Delivery of Unleaded Fuel
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act (CEQA) guidelines; and
2. Authorize the Procurement Manager to issue a purchase order with Falcon Fuels, Inc. for the purchase and delivery of unleaded fuel for the City of Santa Monica. This recommended award is made as an exception to the competitive bidding process pursuant to Section 2.24.250 (c) and is for a total amount not to exceed $3,161,991 (including a 10% contingency) with future year funding contingent on Council budget approval.
Summary
The City utilizes unleaded fuel in over 250 vehicles and equipment, including emergency response vehicles in the Santa Moncia Fire Department (SMFD), Santa Monica Police Department, and hybrid vehicles in the Department of Transportation (DOT). The current purchase order for unleaded fuel expires on April 23, 2024. Staff recommends issuing a purchase order with Falcon Fuels, Inc. for the purchase and delivery of unleaded fuel for a total amount not to exceed $3,161,991 over a four-year period including a 10% contingency.
Discussion
Currently, the City purchases unleaded fuel from Pinnacle Petroleum. The purchase order expires on April 23, 2024, at which time the City will begin purchasing from Falcon 2 of 4
Fuels, Inc. which is the unleaded fuel provider for Los Angeles County area under the State of California contract.
In February 2023, the State of California solicited bids for the purchase and delivery of unleaded fuel, which included a stipulation that the contract would be available for use by participating local agencies. The State of California’s three-year contract is from March 2, 2023, through March 1, 2026, with the option for two one-year extensions which could extend the contract through March 1, 2028. The State of California’s procurement process allows for local municipalities to use contract no. 1-23-91-02C for the purchase of regular unleaded gasoline.
Staff estimates citywide usage of unleaded fuel at approximately 150,000 gallons per year, based on usage over the past few years. However, unleaded fuel usage should continue to decline as the City shifts to hybrid and electric vehicles. Staff anticipates the purchase order with Falcon Fuels, Inc. to begin in mid-April 2024, with current fiscal year usage estimated at 31,250 gallons. Based on price quote provided by Falcon Fuels, the current unleaded 87 fuel price is about $3.49, including various taxes and fees. Staff projects an annual 15% increase in the total per gallon cost and a 10% contingency.
Vendor Selection
Exception to Competitive Bidding
Staff recommends Falcon Fuels, Inc. to furnish and deliver unleaded fuel as an exception to competitive bidding per Muni Code 2.24.250 (c). This purchase meets the City’s exception to competitive bidding criteria, as competitive procedures were followed by the State of California and the goods are supplied to the City at the same or better price. Due to economies of scale, the State of California is able to secure a better price for unleaded fuel, purchasing throughout the State and in conjunction with other government entities, versus the City of Santa Monica going out to bid on our own for approximately 150,000 gallons.
c. competitive procedures were followed by a governmental agency, federal, state, county, city, joint powers agency, special district, or cooperative purchasing agency and the goods or services are supplied to the City at the same or better price; 3 of 4
Environmental Review
The purchase order for unleaded fuel is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines. Section 15301 exempts Class 1 (Existing Facilities) projects from CEQA, which includes the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The purchase order for unleaded fuel would not result in any modifications to existing fueling facilities and would not expand or materially change existing fueling operations or increase the fleet of vehicles or equipment using unleaded fuel. Therefore, this is categorically exempt as set forth in Section 15301 of the CEQA Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund and Big Blue Bus Fund to award a purchase order with Falcon Fuels, Inc. for the purchase and delivery of unleaded fuel. Future year funding is contingent on Council budget approval.
Purchase Order Request
Current Year
Request
Amount
Amount for
Future Years Fund FY 2023-24 BudgetAccount #
Total Contract
Amount
$10,794 $305,405 General Fund 01190001.521810 $316,199
$97,145 $2,748,647 Big Blue Bus Fund 60600013.521831 $2,845,792 Total $3,161,991
Prepared By: Jonathan Tang, Principal Administrative Analyst Approved Forwarded to Council
Attachments:
A. Oaks Initiative-Falcon Fuels
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B. Levine Act Disclosure Form-Falcon