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Approve an Appropriation Transfer Request from Fleet Reserves in the amount of $450,000 to fund increased fuel costs for County equipment and vehicles, and Fleet audit-related costs (4/5 vote required)
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Department of General Services recommends that the Board of Supervisors approve an Appropriation Transfer Request (ATR) from Fleet Reserves in the amount of $450,000 to fund increased fuel costs for County equipment and vehicles, and Fleet audit-related costs (4/5 vote required).
SUMMARY/DISCUSSION:
The Department of General Services is requesting additional funding to support fuel purchases at five County-operated fueling sites. Since the beginning of FY2025/26, the County has received 58 fuel deliveries across these locations and anticipates requiring approximately nine additional deliveries through the end of the fiscal year.
Fuel costs have increased significantly due to recent volatility in global petroleum markets, with substantial price spikes beginning in March 2026. As of May 2026, unleaded fuel costs have increased by approximately 72%, while renewable diesel has increased by approximately 80%. These increases were not anticipated during our annual or midyear budget processes. Fuel usage remains consistent with operational needs; cost increases are driven by pricing, not increased consumption.
Departments are currently experiencing the impact of higher fuel costs, as fuel is purchased based on actual usage. Departments have also been advised to continue monitoring fuel expenditures and evaluating practices that may help reduce fuel consumption where operationally feasible.
In addition, approximately $40,000 is needed to support costs associated with a recent Fleet internal audit conducted by the Auditor-Controller. These costs were unknown during the FY2025/26 budget process.
The requested ATR will help offset increased Fleet operational costs and support continued County operations.
FINANCIAL IMPACT:
The additional costs are estimated at up to $450,000, including fuel procurement costs and Fleet audit-related expenses. Actual expenditures may vary depending on market conditions through the end of the fiscal year. The Fleet Reserve Fund is recommended as the funding source.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2025/26 Working Budget.
ALTERNATIVES:
The Board could choose not to approve the ATR. This is not recommended, as insufficient funding would impact County operations, including essential services such as law enforcement and emergency response.
OTHER AGENCY INVOLVEMENT:
The Auditor-Controller’s Office conducted the Fleet internal audit.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION