MEETING DATE:
MAY 9, 2023
SUBJECT:
Title
RESOLUTION NO. 2023-9133 - AMENDING BULK FUEL SERVICES CONTRACT WITH SOUTHERN COUNTIES LUBRICANTS, LLC AND AUTHORIZING THE CITY MANAGER TO FINALIZE AND EXECUTE THE CONTRACT AMENDMENT AND RELATED DOCUMENTS
Body
Recommendation
Recommendation
ADOPT a resolution amending the bulk fuel services contract with Southern Counties Lubricants, LLC and authorizing the City Manager or delegated designee to finalize and execute the contract amendment and all related documents.
Body
Board or Commission Action
Not applicable
Relevant Council Strategic Theme
Dynamic and Responsive Service Delivery
Good Governance
Relevant Department Goal
Not applicable
Executive Summary
The City spends approximately $1 million per year on fuel and lubricants. Approximately 70% of the fuel procured by the City is passed through to San Diego County (the Sheriff’s Department) and San Marcos Unified School District. Staff recommends amending the existing contract to ensure adequate contract capacity through the end of the contract term.
Discussion
On July 20, 2020, a request for proposals was publically solicited to provide bulk fuel and lubricant delivery services. Three proposals were received. After review of the proposals, Southern Counties Lubricants, LLC was rated the most qualified, responsive and responsible proposer. On September 20, 2020, City Council awarded Contract No. 6452 to Southern Counties Lubricants, LLC which was executed in the amount of $3.25 million for a term of five years.
Fuel cost is based on the Oil Price Information Service (OPIS) daily low rack average plus a stated not to exceed amount, which establishes the cost per gallon of fuel. The average cost per gallon of fuel at the time of contract award was $2.73. The average cost per gallon is now $4.16. This substantial increase has resulted in exhaustion of the majority of the contract funds much sooner than the contact expiration of November 1, 2025. Staff recommends amending the contract to add $3.25 million to the contract amount for a total contract value of $6.5 million, to ensure adequate contract funding through the end of the five-year term.
Fiscal Impact
Fuel expenses are budgeted in the Public Works Fleet Operating budget. This includes City fuel, and other agency fuel for which the City is reimbursed. The addition of funds to the contract does not commit the City to any future expense. Future expenses related to the purchase and delivery of fuel and lubricants will continue to be reflected in the Public Works Fleet Operating budget.
Attachment(s)
Resolution 2023-9133
Prepared by: Samantha Byfield, Special Projects Manager
Submitted by: Samantha Byfield, Special Projects Manager
Reviewed by: Darren Chamow, Public Works Director
Approved by: Jack Griffin, City Manager