City Council Agenda Report
Meeting Date: August 4, 2026
From: Daniel S. Wall, P.E., Director of Public Works-City Engineer Department: Public Works
Submitted by: Rosemary Lozada, Management Analyst
Subject
Purchase Order with Merrimac Energy Group for Fuel Procurement Recommendation
Approve and authorize issuance of a Purchase Order with Merrimac Petroleum, Inc. dba Merrimac Energy Group in an amount not-to-exceed $750,000 to procure fuel for the Citywide fleet for Fiscal Year 2026-2027.
Background
The Public Works Department is responsible for procuring fuel for the City’s entire vehicle fleet.
To reduce costs associated with retail fuel purchases, the City utilizes bulk fuel deliveries from licensed vendors that supply directly to designated storage tanks.
Staff recommends that the City Council authorize a Purchase Order (PO) with Merrimac Energy Group in an amount not to exceed $750,000 for the purchase of fuel. This procurement is based on the existing General Services Agreement No. PW22-1064 between Merrimac and the City of San Buenaventura (Ventura), which was awarded through a competitive Request for Proposals (RFP) process in 2022 (Attachment 1). The agreement initially covered a one-year term with up to four one-year extension options. Ventura recently executed a fifth amendment extending the agreement through June 30, 2027 (Attachment 2). In accordance with Vernon Municipal Code (VMC) Section 3.32.110(A)(5), the proposed PO is exempt from competitive bidding, as it qualifies under the cooperative purchasing provision. This "piggyback" arrangement allows the City to procure goods under the same terms and pricing secured by another public agency, and it is the opinion of the Finance Director that it is to the advantage of the City to do so.
Under the Ventura agreement, pricing for red dye diesel, renewable diesel, gasoline, diesel exhaust fluid, and lubricants is determined daily based on the Oil Price Information Service (OPIS) Early Day “Los Angeles Average,” as published weekly by the United Communications Group. Merrimac monitors daily market fluctuations and provides the City with pricing updates, helping staff secure fuel at the most competitive rates. Given the volatility of fuel prices, the recommended not-to-exceed PO amount will ensure the City can meet its fuel needs throughout Fiscal Year 2026–2027.
Pursuant to VMC Section 3.32.030(A), City Council approval is required, as the total value of the requested Purchase Order exceeds $100,000.00 over the lifetime of the contract.
Strategic Plan Goals
Goal 5: Strengthen Organizational Efficiency and Financial Planning Fiscal Impact
The fiscal impact is not-to-exceed $750,000, covering the blanket Purchase Order. Sufficient funds for the purchase of fuel for Fiscal Year 2026-27 are included in the Vehicle Expense Account for each City Department.
Attachments
1. Agreement No. PW22-1064
2. Amendment No. 5 to Agreement No. PW22-1064