Over medium-low heat, add the oil to a large skillet with the onion, squash, garlic, and bay leaf, stirring occasionally, until the onion has softened. Add 1/2 cup chicken broth or water. Cover and cook 15 minutes or until the squash is fork-tender. Stir in the zucchini, tomatoes, salt, and chili and cook over medium heat, stirring occasionally, for 5 to 7 minutes or until the vegetables are tender. Stir in the sage and a few grinds of pepper to taste.