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Committee forwards fuel contract extensions and urges fixes after BLA finds encumbrance gap
Summary
The committee recommended forwarding amendments to extend and increase city fuel contracts (renewable diesel with Golden Gate Petroleum and gasoline with Mansfield Oil) to avoid supply interruptions while OCA completes a new combined solicitation, and the Budget Legislative Analyst flagged PeopleSoft encumbrance controls that the Controller’s Office said it will address via a dashboard.
On Oct. 2, the Budget and Finance Committee recommended forwarding two related resolutions to extend and expand not-to-exceed authority on the city's fuel contracts while a combined solicitation is completed.
OCA staff explained the renewable-diesel contract with Golden Gate Petroleum (current NTE roughly $86.7M) needs additional funding and a term extension to cover the fiscal year through June 30, 2025; OCA requested authority to increase the diesel contract to about $102.3 million now, with a contingency authority up to approximately $108.6 million in case procurement delays push a final award out to Oct. 31, 2025. For the gasoline contract with Mansfield Oil, OCA proposed increasing the NTE by about $7.5 million to $17.5 million to reach June 30, 2025, with contingency authority up to roughly $20.7 million through Oct. 31, 2025.
OCA said a comprehensive solicitation for diesel, gasoline and related lubricants is underway and the office expects to award one or more contracts by the end of the fiscal year. Staff emphasized fuel is a critical commodity for city operations and recommended the temporary amendments to avoid interruptions in delivery.
The Budget Legislative Analyst recommended approval of both items but reiterated a concern raised elsewhere in the meeting: the city’s PeopleSoft system does not automatically prevent encumbrances that exceed Board-authorized contract authority. The BLA said one review showed encumbrances for a contract exceeded Board authorization; Devin McCauley of the Controller's Office said a BI dashboard has been developed to show total POs, freight, taxes and fees together and that the dashboard will be refined with the City Administrator's Office to improve monitoring and that improvements are expected by year-end.
The committee voted to forward the fuel contract items to the Board; Supervisors Mandelmann, Melgar and Chair Chan each voted "Aye."
