The Public Works Department Vehicle Maintenance Division is responsible for providing fuel for city vehicles and equipment for all City departments, which consume an average of approximately 275,000 gallons of fuel per year. The City is currently in the last option year of a contract the City entered into on June 26, 2018 with SC Fuels.

Due to the volatility in the current fuel market and after discussions with the Finance Department’s Purchasing Division, it was determined that extending the current contract would be in the best interest of the City. The City will commence with the bidding process during the one (1) year contract extension so as to have a new multiyear contract in place when the extension expires.

The cost of Amendment No. 3 to the agreement with Southern Counties Oil Company to extend the term by one additional year is $1 million, consistent with the existing contract amount.  The funds will be included in the proposed Fiscal Year 2023-24 Fleet Fund's operating budget.

It is recommended that the City Council:

• Authorize the request to dispense with bidding in the best interest of the City pursuant to Garden Grove Municipal Code 2.50.060(G);

• Approve Amendment No. 3 to extend the term of the contract for one year with Southern Counties Oil Co. (SC Fuels), in the amount of $1,000,000 for the purchase of fuel for city vehicles and equipment; and

• Authorize the City Manager to execute the agreement, and make minor modifications as appropriate thereto, on behalf of the City.

By: Steve Sudduth, Equipment Maintenance Supervisor