Title
Recommendation to Authorize $100,000 in Additional Expenditures with WEX Inc. for Temporary Fleet Fueling Services During the Underground Storage Tank Replacement Project at the Maintenance Service Center, for a Total Amount Not-to-Exceed $415,000. (Public Works 60141580)
Body
To: Honorable Mayor and Members of the City Council
From: Gerry Beaudin, City Manager
EXECUTIVE SUMMARY
On September 16, 2025, City Council approved an agreement with WEX Inc. (WEX) to provide temporary fleet fueling services while the underground fuel storage tanks at the Maintenance Service Center (MSC) were replaced. The WEX program allowed City of Alameda (City) vehicles to fuel at a wide network of retail stations in the City and throughout the Bay Area, with transaction-level reporting and purchase controls to ensure accountability. At that time, staff estimated expenditures of approximately $315,000 over a six-month period based on historical fuel consumption, projected retail fuel prices, and a contingency allowance.
The fuel system replacement project was completed in June 2026, and WEX services are no longer being utilized. However, due to sharp increases in fuel prices and an extended construction period, actual expenditures exceeded the previously authorized amount. Staff recommends retroactive authorization to increase the expenditure limit by $100,000, bringing the total authorized amount to not exceed $415,000. This action is required for proper financial documentation and audit purposes. No budget amendment is required, as sufficient appropriations have already been authorized.
BACKGROUND
The MSC fueling station serves most municipal departments, including Police, Alameda Municipal Power, Public Works, and Recreation and Parks, and supports emergency generators. On November 19, 2024, City Council approved an agreement with Hunt and Sons, LLC (Hunt and Sons) for the delivery of unleaded and diesel fuels to City fueling stations, including the MSC and Fire Stations.
On July 15, 2025, City Council approved a construction contract to remove and replace the MSC’s aging single-walled underground storage tanks with a new above-ground fuel storage system that meets current environmental standards. The project also included replacing the Police Department's underground storage tank; however, that work did not affect fleet fueling operations.
To ensure uninterrupted fueling operations during construction at the MSC, the City Council approved an agreement with WEX Inc., on September 16, 2025, in an amount not to exceed $315,000. The WEX program allowed City employees to fuel authorized vehicles at a network of retail fueling stations throughout Alameda and the Bay Area while maintaining transaction-level reporting, purchase controls, and accountability measures.
DISCUSSION
Staff recommends authorizing an additional $100,000 in expenditure under the existing WEX agreement, increasing the total authorized amount from $315,000 to $415,000.
Actual expenditure exceeded the original estimate due to a combination of factors, including higher-than-anticipated retail fuel prices during the period of WEX service. Fuel prices in California experienced significant volatility during parts of 2025 and 2026, resulting in retail fuel costs exceeding the assumptions used when the original authorization amount was established. Because the WEX program relied on fueling at commercial retail stations rather than the City's bulk fuel purchasing program, the City was more directly affected by these market price increases. In addition, construction of the MSC fuel system replacement project exceeded the original schedule, requiring the City to use WEX services longer than anticipated. Together, these factors resulted in expenditures exceeding the original authorized amount.
Although the MSC fuel system replacement project has been completed and WEX services are no longer required, this request is being brought forward to maintain compliance with financial reporting and audit requirements. No changes to the WEX Master Agreement (Exhibit 1) or the addendum executed by the former City Manager are required. Staff is requesting authorization to increase the expenditure limit.
ALTERNATIVES
• Approve the increased expenditure amount with WEX.
• Decline to authorize the additional expenditure amount. This alternative is not recommended because the expenditure has already been incurred, and authorization is needed to accurately document and account for project costs.
FINANCIAL IMPACT
Fuel costs are budgeted within the Fleet Maintenance Division and allocated to City departments based on actual fuel consumption.
On September 16, 2025, City Council also approved Resolution No. 16315, which increased appropriations for the Fleet Maintenance Division to address higher-than-anticipated fuel costs. As a result, sufficient budget authority exists to cover the additional expenditures, and no budget amendment is required.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment. This action is not a “project” pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15378, and therefore, no further CEQA analysis is required.
CLIMATE IMPACT
The City’s Fleet Replacement Policy, aligned with the Climate Action and Resiliency Plan, prioritizes greenhouse gas emissions reductions by right-sizing the City fleet, transitioning to electric vehicles when feasible, and acquiring low-emission vehicles. The temporary use of retail fueling stations does not alter the City’s long-term goal of reducing fossil fuel consumption and emissions.
RECOMMENDATION
Authorize $100,000 in additional expenditures with WEX Inc. for Temporary Fleet Fueling Services during the underground storage tank replacement project at the Maintenance Service Center, for a Total Amount Not-to-Exceed $415,000.
Respectfully submitted,
Erin Smith
Financial Impact section reviewed,
Ross McCarthy, Finance Director
Exhibits:
1. Wex Sourcewell Agreement
2. Addendum