Melt butter with olive oil in a large skillet over medium heat. Cook and stir onion, celery, and garlic in the butter mixture until the onion is soft and translucent, 5 to 7 minutes.
Stir tomato sauce and tomato paste into the onion mixture until smooth; add Parmesan cheese, fennel seeds, basil, oregano, salt, sugar, pepper, and bay leaf. Stir the sauce and bring to a slow simmer; cook at a slow simmer for 1 hour.