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Committee approves temporary boost to renewable diesel contract amid rising fuel spending
Summary
The committee approved forwarding an amendment to increase the city's renewable diesel contract by about $18.7M to $86.7M and extend it to Oct. 31, 2024, citing increased consumption and price volatility; staff said emergency procurement rules and secondary vendors provide contingency for disasters.
The Budget & Finance Committee voted to forward to the full Board a proposed third amendment to the city's renewable diesel contract with Golden Gate Petroleum, increasing the not‑to‑exceed from $68M to about $86.7M and extending the term through Oct. 31, 2024.
Mark Farley of the Office of Contract Administration said diesel purchases—used by MTA buses, the city fleet, fire apparatus and other departments—grew from roughly $11M per fiscal year in earlier years to about $18M–$19M recently, driven by oil‑market volatility. The amendment adds approximately $18.7M to cover projected spending through an extended term and align the contract end with a planned broader fuel procurement.
Supervisors questioned whether the contingency includes emergency reserves for disaster response and how long on‑site fuel volumes would sustain city operations. Sala Jacarela (OCA) and department presenters said routine contingency covers projected normal spending and that emergency declarations and chapter 21 emergency procurement authority would allow additional purchases if needed; departments maintain tank levels and secondary vendors exist but delivery in a major regional emergency could still be disrupted.
The Budget & Legislative Analyst recommended approval, noting the increase is consistent with observed spending and that enterprise departments fund most of the purchases. The committee forwarded the amendment with a positive recommendation.
