CITY OF SIMI VALLEY
MEMORANDUM
April 11, 2022
TO: City Council
FROM: Police Department and Department of Public Works
SUBJECT: APPROVE A FIRST AMENDMENT TO THE APRIL 1, 2020 CONTRACT
WITH TRUMAN ARNOLD TO PURCHASE UNLEADED AND DIESEL
FUEL FOR CITY VEHICLES ; AND APPROVE A SUPPLEMENTAL
BUDGET REQUEST FOR FUND 100 IN THE AMOUNT OF $95,000
STAFF RECOMMENDATION
It is recommended that the City Council approve the attached F irst Amendment to the Contract (page 4) with Truman Arnold, for the purchase of unleaded and diesel fuel for City vehicles, to increase the Not -To-Exceed Limit by $1, 364,000 for a total Not -To- Exceed-Limit of $2,400,000, to add the option to extend the contract, contingent upon the County of Ventura exercising its option to extend its Cooperative Contract, authorize the City Manager to execute contract extensions, and approve a Supplemental Budget Request for Fund 100 in the amount of $95,000.
BACKGROUND AND OVERVIEW
The Police and Public Works Departments (Departments) have historically purchased fuel through cooperative agreements with the County of Ventura , resulting in substantial savings to the City and a reduction of staff time as the bid process is waived. Within the past year, fuel costs have increased over 60%, and continue to rise. As a result, the current City Contract is nearly out of funds, the Not-To-Exceed Limit needs to be increased by $1,364,000 for a total Not-To-Exceed Limit of $2,400,000, and an increase is needed for the FY202 1-22 budgeted funds for Fuel/Lubricants in order to continue to purchase fuel for the remainder of the Fiscal Year.
FINDINGS AND ALTERNATIVES
On March 25, 2020, staff obtained the County of Ventura's new Cooperative Agreement (Agreement) (Exhibit 1, page 6), with Truman Arnold Companies (TAC). The term of the County’s Agreement is from March 16, 2020 through March 30, 2023.
AGENDA ITEM NO.
Consent (3)
2 Staff desired to utilize the County’s Cooperative Agreement and executed a new City Contract with TAC dated April 1, 2020. The benefit of using the County’s Cooperative Agreement is that it establishes competitive rates for the term of the Agreement and it streamlines the purchasing process. The Not -To-Exceed Limit for the Contract was set at $1,036,000 for the three-year period.
County's Cooperative Agreement with TAC provides considerable savings for both Unleaded Regular Gasoline and Diesel fuel per the Oil Price Information Service (OPIS).
The last invoice received from TAC (dated March 15, 2022) was $4.551011 per gallon for Unleaded Regular Gasoline compared to a Ventura County market price of $ 6.047 per gallon according to the American Automobile Association (https://gasprices.aaa.com/?state=CA) as of March 28, 2022.
Even though Departments have been able to take advantage of price discounts offered through the County’s Cooperative Agreement, a sharp increase in fuel prices requires a First Amendment to the City’s Contract with TAC to increase the Not-To-Exceed Limit by $1,364,000 to $2,400,000 total, and an increase to the Fuel/Lubricants budget is needed for the City to continue to purchase fuel. Additionally, staff requests to add the option to extend the contract, contingent upon the County of Ventura exercising its option to extend its Cooperative Contract beyond March 2023, and to authorize the City Manager to execute contract extensions.
The following alternatives are available to the City Council:
1. Approve a First Amendment to increase the Contrac t by $1, 364,000 for a total Not-To-Exceed Limit of $2, 400,000, to add the option to extend the contract, contingent upon the County of Ventura exercising its option to ex tend its Cooperative Contract, authorize the City Manager to execute contract extensions, and approve a Supplemental Budget Request for Fund 100 in the amount of $95,000;
2. Provide staff with alternate direction.
Staff recommends alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I move to approve the attached First Amendment to the Contract ( page 4) with Truman Arnold Companies for the purchase of unleaded and diesel fuel for City vehicles, to increase the Not -To-Exceed Limit by $1, 364,000 for a total Not -To-Exceed-Limit of $2,400,000, to add the option to extend the contract, contingent upon the County of Ventura exercising its option to extend its Cooperative Contract, to authorize the City Manager to execute contract extensions, and approve a Supplemental Budget Request for Fund 100 in the amount of $95,000.
3 SUMMARY
The Police and Public Works Departments (Departments) have historically purchased fuel by utilizing the County of Ventura’s Cooperative Agreements, resulting in substantial savings to the City and a reduction of staff time as the bid process is waived. Within the past year, fuel costs have increased by over 60% and continue to rise. As a result, the current City Contr act is nearly out of funds, the Not -To-Exceed Limit needs to be increased by $1,364,000 for a total Not-To-Exceed Limit of $2,400,000, and an increase of $95,000 is needed for the Fuel/Lubricants accounts in Fund 100 to enable continued fuel purchases for the remainder of Fiscal Year 2021- 22. Additionally, staff requests to add the option to extend the contract, contingent upon the County of Ventura exercising its option to extend its Cooperative Contract, and to authorize the City Manager to execute contract extensions.
____________________________________
David M. Livingstone
Chief of Police
Prepared by: Emily Premo, Budget & Administrative Manager
INDEX Page
First Amendment to Contract ........................................................... 4 Exhibit 1 ..................................................................................... 6
FIRST AMENDMENT TO CONTRACT BETWEEN THE CITY
OF SIMI VALLEY AND TRUMAN ARNOLD COMPANIES,
dba TAC ENERGY, FOR THE PURCHASE OF UNLEADED
AND DIESEL FUEL
THIS FIRST AMENDMENT TO CONTRACT is made and entered into in the City of Simi Valley on this 11
th day of April 2022, by and between the CITY OF SIMI
VALLEY, a municipal corporation, hereinafter referred to as CITY, and TRUMAN ARNOLD COMPANIES, a corporation , hereinafter referred to as CONTRACTOR , each a “Party”, collectively “Parties”.
I. Recitals
A. CITY and CONTRACTOR entered into a written contract ("CONTRACT") executed by the Parties on April 1, 2020 for the purchase of unleaded and diesel fuel , which is incorporated herein by reference.
B. In accordance with paragraph 8 of the CONTRACT, the Parties now desire to amend the contract and provide for two (2) additional one (1) year term extensions as well as increase the “Not-To-Exceed” amount of the contract to $2,400,000 as set forth below.
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
II. Amendment
1. Section 1.Term
. shall be amended to read as follows:
“The term of this contract shall be three (3) years from the Effective Date. Upon mutual agreement, the parties may
extend the contract for two (2) additional one (1) year terms.
The P arties further agree that in order to exercise an extension option, Contractor must still have a valid
Cooperative Contract with the County of Ventura--Contract No.8129, or any successor cooperative contract in place, for the options to take force and effect.”
2. Section 2. Compensation and Payment.
Subsection C. shall be amended to read
as follows:
“C. In no event shall the total amount paid for this
CONTRACT exceed $2,400,000 (the “Not-to-Exceed” limit), unless otherwise agreed to by the Parties in writing.”
3. Mailing Address
. The mailing address of each party to this
CONTRACT AMENDMENT is as follows:
4 CITY City of Simi Valley
2929 Tapo Canyon Road
Simi Valley, CA 93063
Staff Contact: Sandra Hernandez
CONTRACTOR Truman Arnold Companies
dba TAC Energy
100 Crescent Court, Suite 1600
Dallas, TX 75201
Attn: Rebekah Johnson
4. Except as herein amended, all other terms and conditions of the CONTRACT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.
Attest: City of Simi Valley, A Municipal
Corporation
By:
Lucy Blanco, City Clerk Keith L. Mashburn, Mayor of the City of Simi Valley, California
Approved as to Form: TRUMAN ARNOLD COMPANIES
By:
David L. Caceres, City Attorney
Print Name:
Approved as to Content: Title:
By:
Brian Paul Gabler, City Manager
Print Name:
Title:
Alison M. Phagan
Deputy Administrative Services Director
(Support Services)
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EXHIBIT 1
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