Report Prepared by: Cosmo Ordunez, Public Works Manager - Internal Services
Title
SUBJECT: Approval of a Card-Lock Fuel Station Service Agreement and a Fuel Delivery Services Agreement with Van De Pol Enterprises, Inc., for the Term of July 1, 2025, Through June 30, 2027, with the Option to Extend for Three Additional One-Year Periods Through June 30, 2030
REPORT IN BRIEF
Considers approving two separate multi-year service agreements with Van De Pol Enterprises, Inc., to provide fueling services for City vehicles for the period of July 1, 2025, through June 30, 2027, with potential extension through June 30, 2030.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving a Service Agreements with Van De Pol Enterprises, Inc., to provide card-lock fueling services for City vehicles; and,
B. Approving a Service Agreement with Van De Pol Enterprise, Inc., to provide fuel delivery services to all City dispensing stations and various generator sites; and,
C. Authorizing the City Manager to execute the necessary documents including executing option periods.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items; or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Section 200 et seq. of the Merced City Charter.
CITY COUNCIL PRIORITIES
As provided for in the FY 2025/2026 proposed budget.
DISCUSSION
The City of Merced has maintained a primary fuel station located at the Public Works Corporation Yard since 1990. There are several smaller fueling locations throughout the City which include the Wastewater Treatment Facility, four Fire Stations, and multiple Water Well sites equipped with fuel tanks for well pump emergency generators. With no unleaded fuel tanks at the Corporation Yard, unleaded fuel for City vehicles must be purchased off-site at a card-lock facility.
The Public Works Fleet Services Division issued a Request for Proposal (RFP) soliciting proposals to provide fuel delivery and/or local Card-Lock fueling services. The two proposals listed below were submitted by the December 16, 2024, deadline.
• Van De Pol Enterprises, Inc. (Stockton, CA
• Pinnacle Petroleum (Huntington, Beach CA) - delivery services only
The RFP asked for separate pricing for both fuel deliveries and for fuel purchased from a local Card-Lock station. In order to obtain fair price comparisons, proposers were asked to submit a single firm differential price for the rack average Stockton, CA price for fuel commodities as posted in the Oil Price Information Services (OPIS) or equivalent, as well as include all other taxes and fees.
Pricing comparisons were based upon the estimated gallons per year from all applicable fueling locations and/or for gallons purchased during the previous calendar year from the local card-lock facility. Based upon the two proposals submitted, Van De Pol Enterprises, Inc. was the low proposer for local Card-Lock services and the only proposer for fuel deliveries.
Currently, there are over 600 vehicles and equipment utilized by all City departments, including police vehicles, fire apparatus, public works equipment, and other vehicles. In calendar year 2024, City vehicles and equipment consumed 187,990 gallons of unleaded, 261,455 gallons of diesel, and 195 gallons of red diesel. With changing regulations, red diesel will no longer be purchased and with the proposed contract, we will be transitioning to renewable diesel as an alternative. Red diesel or renewable diesel is utilized for off-road equipment, such as the Airport’s tractor.
Based on prior fuel consumption, as well as projected growth and fluctuating fuel prices, staff anticipates fuel costs to total $2,320,023 in FY 25/26. Staff recommends approval of multi-year service agreements with Van De Pol Enterprises, Inc. for both Card-Lock and fuel delivery services.
IMPACT ON CITY RESOURCES
No appropriation of funds is needed; funding will be available within the FY 2025/2026 proposed Fleet budget. All future funding will be included as part of the annual budget process.
ATTACHMENTS
1. Pricing Comparison
2. Van De Pol Enterprises, Inc. Card-Lock Agreement
3. Van De Pol Enterprises, Inc. Fuel Delivery Agreement