21-0615_WEX BANK FUEL CARD_Agenda Report_E19City of San Juan Capistrano
Agenda Report
TO: Honorable Mayor and Members of the City Council
FROM: Benjamin Siegel, City Manager
SUBMITTED BY: Thomas Toman, Public Works Director
PREPARED BY: Jill Thomas, Senior Management Analyst
DATE: June 15, 2021
SUBJECT: Agreement with WEX Bank Fuel Card and Management Services;
and Resolution Waiving the Formal RFP/RFQ Process
RECOMMENDATION:
1.Adopt a Resolution waiving the formal RFP/RFQ process; and,
2.Approve and authorize the City Manager to execute all documents
necessary to participate in the State of California’s contract with WEX Bank
and all subsequent applications/agreements of the WEX Bank fuel card and
management services program.
DISCUSSION/ANALYSIS:
The City currently utilizes US Bank Voyager fuel card and online management system
under contract with the State of California Department of General Services Agreement to
purchase fuel for the City’s fleet vehicles. This Agreement will expire on June 30, 2021.
The State of California has entered into a new agreement with WEX Bank to provide
these services effective February 8, 2021, through June 30, 2025. The agreement
includes one optional two-year extension by the State (Attachment 1). Staff recommends
utilizing the new program to purchase fuel, and is requesting an exception to the formal
Request for Proposal/Request for Qualification (RFP/RFQ) procurement process in order
to become a participating entity of the State of California’s recent formal procurement
process and resultant fuel card and management service agreement award with WEX
Bank (MSA #5-19-99-19-01). This approach is the most cost-effective approach for the
City as it provides competitive pricing, local access to fuel, as well as tax-exempt status
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City Council Agenda Report
June 15, 2021
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to the City for payment of Federal taxes on fuel purchases. Additionally, the City will be
invoiced for fuel purchased at current retail pricing with no upcharge. To approve this
exception to the procurement process, the City Council must adopt the attached
Resolution (Attachment 2) waiving the formal RFP/RFQ procurement process for fuel
card and management services. It is also recommended that the City Council authorize
the City Manager to execute all documents necessary to participate in the State of
California’s contract with WEX Bank and all subsequent applications/agreements of the
WEX Bank fuel card and management services program.
The proposed WEX Bank agreement provides local fuel access for the City’s fleet
vehicles at all fuel stations in the City as well as surrounding areas (95% of retail stations
nationwide are included in the WEX program). The WEX Online system also provides
online account access to control and manage fleet purchases, invoices, standard and
custom reporting, tax exemption reports, fuel price mapping, spending limits and product
control by driver and vehicle in addition to 24/7 roadside assistance.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended actions. The terms are the
same as the existing agreement and the City will continue to realize savings on fuel
purchases as all fleet fuel purchases will be tax exempt from Federal taxes. Federal taxes
on fuel are currently $0.183 per gallon for regular and $0.243 per gallon for diesel. The
tax exemption translates to approximately $3,500 to $4,000 annually. Fuel is purchased
at the current retail rate and there is no upcharge. There is sufficient funding in the Public
Works Operating Budget to support this operation.
ENVIRONMENTAL IMPACT:
The recommended action is exempt from CEQA per Section 15061 (b)(3), the general
rule that CEQA applies only to projects which have the potential for causing a significant
effect on the environment. Where it can be seen with certainty that there is no possibility
that the activity in question may have a significant effect on the environment, the activity
is not subject to CEQA. Adopting a resolution waiving the formal RFP/RFQ process and
authorizing the City Manager to execute all documents necessary to participate in the
State of California’s contract with WEX Bank and all subsequent applications/agreements
of the WEX Bank fuel card and management services program would not be an activity
with potential to cause significant effect on the environment and is therefore exempt from
CEQA.
PRIOR CITY COUNCIL REVIEW:
On July 19, 2011, the City Council approved participation in the State of California’s fleet
card program with US Bank.
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June 15, 2021
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COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
NOTIFICATION:
Tanya Watson, WEX Bank
Phil Guenther, Department of General Services, State of California
ATTACHMENTS:
Attachment 1: WEX Bank/State of California Agreement
Attachment 2: Proposed Resolution 21-06-15-XX
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1
RESOLUTION NO. 21-06-15-XX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO, CALIFORNIA, AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO WAIVE THE FORMAL RFP/RFQ BID PROCESS AS A
NON COST-EFFECTIVE APPROACH, AND AUTHORIZING STAFF TO
PROCEED WITH AWARDING AN AGREEMENT FOR FUEL CARDS AND
MANAGEMENT SERVICES AS A PARTICIPATING ENTITY IN
ACCORDANCE WITH A COMPETITIVE PROCUREMENT CONDUCTED
BY THE STATE OF CALIFORNIA
WHEREAS, the City has contracted with State of California Inc. through US Bank
for fuel card and management services since 2011; and
WHEREAS, the contract between the State of California and US Bank expires on
June 30, 2021; and
WHEREAS, the ability to purchase fuel for the City fleet is a critical operational
function to provide necessary support for the City and community; and
WHEREAS, the State of California recently bid and awarded a contract for fuel
card and management services effective February 8, 2021 to WEX Bank; and
WHEREAS, the City desires to become a participating entity on the competitive
procurement performed by the State of California, Contract No. MSA #5-19-99-19-01; and
WHEREAS, fuel purchased through the WEX Bank fuel card system will not be
subject to Federal taxes; and
WHEREAS, fuel purchased through the WEX Bank fuel card system will be
invoiced to the City at current retail pricing with no upcharge; and
WHEREAS, Section 3-4.304 of the San Juan Capistrano Municipal Code provides
that services contracts over $25,000 are subject to a formal RFP/RFQ procurement
process; and
WHEREAS, Section 3-4.306(e)(3) of the San Juan Capistrano Municipal Code
provides an exception to the formal RFP/RFQ procurement process where the process is
deemed not to be the most cost-effective approach; and
WHEREAS, undergoing a formal RFP/RFQ procurement process for fuel card and
management services would not be the most cost-effective approach given the City’s
immediate need to have access to a reliable online management system for fuel required
by the City fleet, the cost benefit realized by the ability for Federal tax exempt status on
fuel, and the ability to rely on a competitive procurement recently performed by the State
of California; and
ATTACHMENT 2, PAGE 1 OF 2
2
WHEREAS, WEX Bank has been thoroughly vetted by the State of California in its
ability to provide fleet card services including an online fuel management system to assist
the State and other agencies to source and purchase fuel in a secure, reliable and
economical manner.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO, CALIFORNIA, HEREBY RESOLVES, FINDS AND DETERMINES AS
FOLLOWS:
1. That the foregoing recitals are true and correct and incorporated herein by this
reference.
2. That undergoing a formal RFP/RFQ procurement process at this time for fuel card
and management services would not be the most cost-effective approach and is
therefore waived for this procurement.
.
3. That the City Manager or his designee is hereby authorized to execute all
documents necessary to participate in the State of California’s contract with WEX
Bank and all subsequent applications/agreements of the WEX Bank fuel card and
management services program.
PASSED, APPROVED, and ADOPTED is ___ Day of ____________, 2021.
________________________
JOHN TAYLOR, MAYOR
____________________________
Maria Morris, City Clerk
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