REPORT TO COUNCIL
SUBJECT
Title
Action on the Award of Purchase Orders to Bosco Oil Company DBA Valley Oil and Tom Lopes Distributing, Inc. DBA Western States Oil Company for the Purchase of Unleaded Fuel 87-Octane, Ultra-Low Sulfur Diesel, and Renewable Diesel Fuel Through January 31, 2029 and Ratify Purchase Orders Issued After Prior City Council Authorization Expired
Report
BACKGROUND
On March 9, 2021 (RTC 21-206), the City Council authorized the City Manager to execute purchase orders for unleaded fuel 87-octane, ultra-low sulfur diesel, and renewable diesel fuel with Bosco Oil Company DBA Valley Oil (Valley Oil) and Tom Lopes Distributing, Inc. DBA Western States Oil Company (Western States Oil Company) pursuant to the County of Santa Clara’s (County) cooperative fuel agreements through January 11, 2026.
The Department of Public Works (DPW) Fleet Management Division purchases unleaded and renewable diesel fuel to support more than 600 City fleet assets for the Public Works, Fire, Police, Silicon Valley Power, Water & Sewer Utilities, Community Development, and Parks & Recreation Departments, etc. Reliable access to fuel is essential to ensure uninterrupted delivery of City services.
The 2021 City Council authorization allowed the City to purchase fuel under the County’s cooperative agreements but did not establish a not-to-exceed compensation amount, providing operational flexibility to ensure sufficient fuel supply. Since 2021, the City has issued purchase orders under these cooperative agreements totaling $5,372,900, as summarized in Table 1 below.
Table 1: Fuel Purchases Under County Cooperative Agreements
|
Calendar Year |
Amount |
|
2021 |
$660,000 |
|
2022 |
$1,328,500 |
|
2023 |
$1,200,000 |
|
2024 |
$1,131,400 |
|
2025 |
$1,053,000 |
|
Total |
$5,372,900 |
DISCUSSION
The County of Santa Clara has extended its cooperative agreements with Valley Oil and Western States Oil Company for another year through January 11, 2027. Staff is requesting City Council authorization to continue issuing purchase orders under these cooperative agreements through that date to ensure uninterrupted fuel supply for City operations.
This purchase is being made pursuant to Section 2.105.270(d) of the City of Santa Clara Code, which authorizes the City to contract directly with a vendor at a price and on terms obtained through a competitive bidding process of another public agency, even if the City has not joined with the public agency in such competitive process or purchase. The County’s competitive solicitation process meets or exceeds the City’s competitive bidding requirements, as determined by the Purchasing Division Manager.
Based on historical consumption, fleet size, and current market conditions, staff anticipates total expenditures of approximately $1,338,000 for the period from January 12, 2026 through January 11, 2027. Fuel expenditures may vary depending on market pricing and operational demand. Staff is also requesting the ability to issue purchase orders up to $3,000,000 from January 12, 2027 through January 31, 2029, in the event the County extends the existing agreements or awards successor agreements.
In addition, staff requests City Council ratification of up to $300,000 for purchase orders issued to Valley Oil and Western States Oil Company beginning January 12, 2026. The prior City Council authorization expired on January 11, 2026, and purchase orders were issued after that date to avoid interruption of fuel supply required for City operations. The County extended its cooperative fuel agreements on December 5, 2025 through January 11, 2027; however, City Council authorization to continue purchases under the extended County agreements was not obtained prior to the expiration date because staff was waiting on the County’s execution of the amendments to proceed.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(2) as it is continuing administrative and maintenance activities including the purchase of supplies.
FISCAL IMPACT
The FY 2025/26 Operating Budget for fuel purchases is $1,338,000 in the Fleet Operations Fund. Funding for future years is incorporated into the budget development process at or around the current annual amount with adjustments based on fuel pricing and use and is subject to the appropriation of funds.
COORDINATION
This report has been coordinated with Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov, or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to execute purchase orders for unleaded fuel 87-octane gasoline, ultra-low sulfur diesel, and renewable diesel fuel with Bosco Oil Company DBA Valley Oil and Tom Lopes Distributing, Inc. DBA Western States Oil Company pursuant to the County of Santa Clara’s cooperative fuel agreements, for an aggregate not-to-exceed maximum compensation of $1,338,000 (inclusive of the ratified amount below) for the period from January 12, 2026 through January 11, 2027, and for an aggregate not-to-exceed maximum compensation of $3,000,000 from January 12, 2027 through January 31, 2029 (in the event the County extends the existing agreements or awards successor agreements), subject to budget appropriations and the final review/approval as to form by the City Attorney; and
2. Ratify purchase orders issued between January 12, 2026 and the date of City Council approval to Bosco Oil Company DBA Valley Oil and Tom Lopes Distributing, Inc. DBA Western States Oil Company in a total amount not-to-exceed $300,000, which is included in the total authorization above.
Staff
Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. RTC 21-206
2. Agreement # CW2239572 by and Between the County of Santa Clara and Bosco Oil Company DBA Valley Oil Company
3. First Amendment to Agreement # CW2239572 by and Between the County of Santa Clara and Bosco Oil Company DBA Valley Oil Company
4. Second Amendment to Agreement # CW2239572 by and Between the County of Santa Clara and Bosco Oil Company DBA Valley Oil Company
5. Third Amendment to Agreement # CW2239572 by and Between the County of Santa Clara and Bosco Oil Company DBA Valley Oil Company
6. Fourth Amendment to Agreement # CW2239572 by and Between the County of Santa Clara and Bosco Oil Company DBA Valley Oil Company
7. Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
8. First Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
9. Second Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
10. Third Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
11. Fourth Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
12. Fifth Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company
13. Sixth Amendment to Agreement # CW2239583 by and Between the County of Santa Clara and Tom Lopes Distributing, Inc. DBA Western States Oil Company