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Council approves five‑year $18.75 million fuel purchasing agreement with Hunt & Sons
Summary
The council authorized a five‑year purchasing agreement with Hunt & Sons LLC for renewable diesel and bulk fuels, not to exceed $18.75 million, to supply city fueling sites and bus fleet fueling; staff said the contract uses a market benchmark (OPIS) with site‑specific markdowns.
The Modesto City Council on March 11 approved a five‑year purchasing agreement with Hunt & Sons LLC of Sacramento for renewable diesel and bulk fuels, with a total not‑to‑exceed authorization of $18,750,000.
Patrick Crowley, senior public works manager, told the council the city operates 54 fueling sites (one underground, the rest aboveground) serving city vehicles, about 1,400 pieces of equipment and StanRTA buses (which account for roughly two‑thirds of fuel use). The city issued an invitation for bids; two local companies submitted bids and staff benchmarked pricing against OPIS (a fuel commodity index). Contract pricing is expressed as a markup/markdown to the OPIS benchmark with site variations: most sites are offered at about $0.12/gallon less than the market benchmark, a few “wet fueling” sites are approximately $0.06 more, and the bus maintenance facility receives about $0.20/gallon off the bench due to volume.
Crowley said the annual recommended authorization is $3,750,000, and staff built a five‑year total not to exceed $18,750,000 to accommodate recent increases in usage (transit fleet growth) and state fuel tax increases (a state 65¢/gallon tax added January 1 and a potential further 85¢/gallon later in the year). Staff also said they applied a 5.8% escalator (CPI‑linked) for future years when estimating totals.
Council members asked about local Hunt & Sons delivery operations, invoicing to StanRTA for transit fueling, fraud prevention and automated controls. Staff said deliveries are performed locally; StanRTA reimbursements cover fuel and staffing for transit bus fueling; automated reporting systems (VanderRoot) and locked fueling stations are used to control and track usage. Staff also said they are pursuing potential incentives or grants (for renewable fuel) from the air district but had not received confirmation.
Vice Mayor Bavaro moved the resolution and Councilmember Ricky seconded; the roll call vote was unanimous. The resolution authorized the director of finance or designee to execute the agreement.
