CITY OF SIMI VALLEY
MEMORANDUM
M
ay 16, 2022
TO
: City Council
F
ROM: Police Department and Department of Public Works
SUBJECT: APPROVE A SECOND AMENDMENT AND ASSIGNMENT AND ASSUMPTION TO THE APRIL 1, 2020 CONTRACT WITH
TRUMAN ARNOLD COMPANIES TO PURCHA SE UNLEADED AND
DIESEL FUEL FOR CITY VEHICLES AND AUTHORIZE THE CITY
MANAGER TO EXECUTE ANY FURTHER NON-M ONETARY
CONTRACT CHANGES
STAFF RECOMMENDATION
I
t is recommended that the City Council approve the attached Second Amendment and Assignment and Assumption to the Contract between the City of Simi Valley and Truman Arnold Companies (page 3) for the purchase of unleaded and diesel fuel for City vehicles.
BACKGROUND AND OVERVIEW
The P
olice and Public Works Departments purchase 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. The County of Ventura’s current Cooperative Agreement is with Truman Arnold C ompanies; however, Truman Arnold Companies has entered into an A sset Purchase Agreement with TACenergy, LLC that is expected to close in May 2022. The City of Simi Valley requires any assignments of the Contra ct be approved. Additionally, staff is requesting the City Council authorize the City Manager to execute any further contract amendments, including contract assign ments, extensions, or other non-monetary contract changes.
FINDINGS AND ALTERNATIVES
O
n March 25, 2020, staff obtained the County of Ventura's new Cooperative 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. Staff desired to utilize the County’s Cooperative Agreement (Agreement), and executed a new City of Simi Valley Contract (Contract) with TAC dated April 1, 2020. During the April 11, 2022 City Council meeting, the Council approved the first amendment to the April 1, 2020 contract to increase the Not-To-Exceed limit in response to rising fuel costs.
O
n or about February 14, 2022, TAC entered into an Asset Purchase Agreement (APA) to sell substantially all of its assets to TACenergy, LLC. The APA was expected to close
AGENDA I
TEM NO.
Consent (6)
2 on or about May 3, 2022. TACenergy, LLC contacted the City to request approval of an assignment changing the Assignee from TAC to TACenergy, LLC.
The Contract has a requirement for the City of Simi Valley (City) to approve any assignments of the Contract. In addition to requesting assignment approval, staff is requesting the City Council authorize the City Manager to execute any further contract amendments, including contract assignments, extensions, and/or other non- monetary contract changes.
The following alternatives are available to the City Council:
1. Approve a Second Amendment and Assignment and Assumption to the Contract between the City of Simi Valley and Truman Arnold Companies, and authorize the City Manager to execute any further non-monetary contract changes;
2. Provide staff with alternate direction.
Staff recommends alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I move to approve the attached Second Amendment and Assignment and Assumption to the Contract with Truman Arnold Companies for the purchase of unleaded and diesel fuel for City vehicles , and authorize the City Manager to execute any further non- monetary contract changes.
SUMMARY
The Police and Public Works Departments purchase 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. The County of Vent ura’s current Cooperative Agreement is with Truman Arnold Companies; however, Truman Arnold Companies has entered into an Asset Purchase Agreement with TACenergy, LLC that is expected to close in May 2022. The City of Simi Valley requires any assignments of the Contract be approved. Additionally, staff is requesting the City Council authorize the City Manager to execute any further contract amendments, including contract assignments, extensions, or other non-monetary contract changes.
____________________________________
David M. Livingstone
Chief of Police
Prepared by: Emily Premo, Budget & Administrative Manager
INDEX Page
Second Amendment to Contract ...................................................... 3 Exhibit 1 ........................................................................................... 6 City of Simi Valley: Assignment Page 1 of 3
SECOND AMENDMENT AND ASSIGNMENT AND ASSUMPTION
OF CONTRACT BETWEEN THE CITY OF SIMI VALLEY AND
TRUMAN ARNOLD COMPANIES TO PURCHASE UNLEADED
AND DIESEL FUEL
CITY OF SIMI VALLEY
Truman Arnold Companies – TACenergy, LLC
This Second Amendment and Assignment and Assumption of Contract between the City of Simi Valley and Truman Arnold Companies to Purchase Unleaded and Diesel Fuel (“Assignment”) is executed on this 16th day of May 2022, by and between, Truman Arnold Companies, a Texas corporation, (“Assignor”) and TACenergy, LLC , a limited liability, (“Assignee”) and the City of Simi Valley, a municipal corporation, (“CITY”).
RECITALS:
A. On or about April 1, 2020, Assignor entered into a written contract for fuel supply services entitled: “Contract between the City of Simi Valley and Truman Arnold Companies to Purchase Unleaded and Diesel Fuel” (“Contract”) with CITY as its Client.
B. On or about February 14, 2022, Assignor entered into an Asset Purchase Agreement (“APA”) to sell substantially all of its assets to Assignee, including but not limited to Assignor’s rights under the Contract. The APA was expected to close on or about May 03, 2022.
C. The Contract has a r equirement for the CITY to approve any assignments of the Contract. Assignee is beneficially owned and managed by Greg Arnold, who has 30 years of experience in the wholesale fuel industry and is familiar with the legal compliance related to the same.
D. Assignor desires to assign the Contract to Assignee. Assignee desires to assume all of Assignor’s interest in and rights and obligations under the Contract.
AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Assignor and Assignee hereby agree as follows:
1. Recitals Incorporated
. The above Recitals are incorporated into this
Assignment and made a part hereto.
2. Assignment
. Assignor hereby irrevocably and unconditionally (a) assigns to Assignee as of the Effective Date, all of Assignor’s right, title and interest in, to and under the Contract arising on and after the Effective Date, and (b) delegates to Assignee all obligations of Assignor under the Lease arising on and after the Effective Date.
Notwithstanding the above, this Assignment is conditional on the Closing of the transactions in the APA (“Closing”). The Closing date shall be the Effective Date of this Assignment. If 3 City of Simi Valley: Assignment Page 2 of 3
the APA Closing does not occur for any reason, this Assignment shall be null and void and have no force or effect.
3. Amendments
: Any non-monetary amendment, modification, or variation from the terms of this Contract shall be in writing and shall be effective only upon mutual written approval from the City Manager and the Assignee.
4. Consent Granted
. Subject to the terms and conditions in this Assignment, the CITY consents to the assignment of the Contract.
5. Billing
. Assignor shall invoice the CITY for all services which occur on or before the Effective Date. Assignee shall invoice the CITY for all services which occur after the Effective Date. The parties shall use good faith efforts to ensure payments are sent to the proper payees and addressees.
6. Notices
. Notice for Contractor is hereby amended to:
Representative: Mitch Lewis
Entity: TACenergy, LLC
Address: 4 Hutton Centre Dr. Suite 700 Santa Ana, CA 90727
E-mail: [email protected]
7. Assumption of Obligations. TACenergy, LLC represents that it unconditionally assumes all of the rights, duties and obligations of Truman Arnold Company , a Texas corporation as it relates to the Contract.
8. No Other Modifications . To the extent not expressly modified under this Assignment, all other portions of the Contract shall remain in full force and effect.
Notwithstanding the above, to the extent there are any conflicts of the terms, conditions, or obligations contained in the Contract and this Assignment, this Assignment shall control. As to terms and conditions between the Assignor and Assignee, the APA shall be controlling.
9. Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Assignment may be detached from any counterpart of this Assignment w ithout impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages.
Signature page follows
4 City of Simi Valley: Assignment Page 3 of 3
IN WITNESS WHEREOF, the parties below have executed this Assignment and Assumption of Contract between the City of Simi Valley and Truman Arnold Companies to Purchase Unleaded and Diesel Fuel as of the day and year written below.
A
ttest: CLIENT: City of Simi Valley
B y:
Lucy Blanco, City Clerk Keith L. Mashburn, Mayor of the City of Simi Valley, California
A
pproved as to Form: ASSIGNOR: TRUMAN ARNOLD COMPANIES B y:
David L. Caceres, City Attorney
P rint Name:
Approved as to Content: Title:
B y:
Brian Paul Gabler, City Manager
P rint Name:
T itle:
Carolyn Johnson,
Acting Administrative Services Director A SSIGNEE: TACenergy, LLC B y:
P rint Name:
T itle:
B y:
P rint Name:
T itle:
5 EXHIBIT 1
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
FIRS
T AMENDMENT TO CONTRACT BETWEEN THE CITY
OF SIMI VALLEY AND TRUMAN ARNOLD COMPANIES,
dba TAC ENERGY, FOR THE PURCHASE OF UNLEADED
AND DIESEL FUEL
THI
S FIRST AMENDMENT TO CONTRACT is made and entered into in the City of Simi Valley on this 11th 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. Rec
itals
A. CI
TY 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 acc
ordance 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. Sect
ion 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. Sect
ion 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. Mai
ling Address . The mailing address of each party to this CONTRACT AMENDMENT is as follows:
DocuSign Envelope ID: 2DA46195-8A85-4652-9B43-3EE58F33CCDD 26 CITY City
of Simi Valley
2929 Tapo Canyon Road
Simi Valley, CA 93063
Staff Contact: Sandra Hernandez
CONTRACT
OR 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 W
ITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.
Attes
t: City of Simi Valley, A Municipal
Corporation
By:
Lucy Blanco, City Clerk Keith L. Mashburn, Mayor of the City of Simi Valley, California
Appro
ved 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)
DocuSign Envelope ID: 2DA46195-8A85-4652-9B43-3EE58F33CCDD SVP
James H. Day
James Henry Russell
CFO/SVP
27