Title
RESOLUTION NO. 2017-005 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CONTINUED UTILIZATION OF THE EXTENDED CONTRACT BETWEEN THE CITY OF SAN DIEGO AND SOCO GROUP FOR THE PURCHASE OF MOTOR VEHICLE FUEL FOR CITY OF CHULA VISTA VEHICLES
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
Approximately 107,000 gallons of gasoline and 94,000 gallons of biodiesel are purchased annually for use in City vehicles and equipment. In 2012, The City of San Diego awarded a contract to SoCo Group for the purchase of various motor vehicle fuels, and the City of Chula Vista has been purchasing fuel on that contract through a cooperative purchasing agreement. That contract is about to expire, but the City of San Diego has negotiated another 18-month extension to the contract. The City of Chula Vista Municipal Code Section 2.56.140 and Council Resolution No. 6132 authorize the City to participate in cooperative bids with other government agencies for the purchase of materials of common usage, provided that the Purchasing Agent determines that the competitive process used for the cooperative bid was consistent with good purchasing practices. The City of San Diego participated in a competitive bid process for the original contract.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
The SoCo Group was one of 23 potential proposers contacted by the City of San Diego, and one of three proposers who responded to the RFP to supply various motor vehicle fuels at a predictable price. The City of San Diego staff conducted an extensive analysis and evaluation of the proposals that were received, and determined the proposal submitted by The SoCo Group to provide motor vehicle fuel to be the best overall value and in the best interest of the City of San Diego. The City of Chula Vista was named in the RFP as a participating agency, one of 17 agencies in addition to the City of San Diego, so that the proposers would be aware of our intention to purchase fuel under this agreement.
The price of the fuel is determined on the date of delivery, and is based upon the Oil Price Information Service (OPIS) “Unbranded Low Rack” fuel price benchmark for San Diego. The “Unbranded Low Rack” is a snapshot of the lowest supplier fuel price posting in the OPIS rack market for the day. The RFP required contractors to propose a market differential for the OPIS rack market for each given delivery item listed in the RFP. The market differential is a four-digit decimal numerical value, that is added to the benchmark index for the price of a given fuel product. The market differential includes all cost and profit components determined by the contractor, excluding any applicable fuel taxes. The rack price plus the market differential is the total price to be paid by the City upon delivery of fuel. To ensure the City is receiving the best possible price, staff will monitor the fuel delivery invoices and the OPIS rack market price on a daily basis.
The original City of San Diego contract is for one year, with four annual one-year renewal options. The final annual renewal is about to expire, but City of San Diego staff has negotiated an 18-month extension of that contract with SoCo Group, which has been approved by the City of San Diego with the passage of ordinance O-20758. City of Chula Vista staff recommends that staff be authorized to continue to purchase through the extended agreement for another 18 months.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This action supports the goal of providing Healthy Communities, as providing fuel to service vehicles allows staff to maintain and operate community and neighborhood facilities.
CURRENT YEAR FISCAL IMPACT
Sufficient funds have been budgeted in Central Garage Operations for the purpose of purchasing motor vehicle fuel.
ONGOING FISCAL IMPACT
There is no direct ongoing fiscal impact from approving this resolution in that funds expended in subsequent fiscal years will have been approved through the normal budget or appropriation process.
ATTACHMENTS
None.
Staff Contact: Steve Dorsey, Fleet Manager, Public Works