HomeMy WebLinkAbout2009-01-26 09-066 ORDERCOUNCIL ACTION
Item No, 09
Date: January 26, 2009
Item/Subject: Order, Authorizing the Finance Director to Enter Into Fixed Price Contracts for Natural
Gas Supply
Responsible Department: Finance
Commentary:
Over the last few years, the City has attempted, when possible, to purchase No. 2 fuel oil on a fixed
price basis. As part of the City's overall energy conservation project, a number of City -owned facilities
now use natural gas for heat. Recently, the School Department approached the City about
collaborating on a fix price bid process for natural gas supply. As with other utility contracts, locking in a
longer term supply cost has been beneficial and limits the potential downside risk inherent in the energy
market. As is the case with other utility contracts, the City needs to ability to make a quick decision to
lock in a price while that price remains available. As a result, we are seeking the authority to lock in
prices without the delay required to schedule a Finance Committee meeting and seek Committee
approval. The Chair of the Finance Committee will be consulted in advance of a decision to lock in
prices, and the Finance Committee will be notified when such an action is taken.
This is generally the same approach that has been taken with other forms of fuel in prior years. Given
the on-going uncertainties surrounding the energy market, we recommend your approval.
R;Wrtment Head
Manager's Comments:
City Manager
Associated Information: Order
Budget approval:
e Director
Legal Approval:
Solicitor
Introduced for
X Passage
First Reading
Referral
Page _ of
Assigned to Councilor Stone
CITY OF BANGOR
09 06�
January 26, 2009
(TITLE.) Order, Authorizing the Finance Director to Enter Into Fixed Price Contracts for Natural Gas
Supply
WHEREAS, energy prices are highly volatile and difficult to predict; and
WHEREAS, a number of recent energy conservation measures implemented by the City have resulted
in the need to purchase natural gas for heating puposes; and
WHEREAS, similar to electricity and fuel oil, the opportunity may exist to fix the supply costs for
natural gas into the future; and
WHEREAS, recently, utility prices in general have become more favorable; and
WHEREAS, in order to achieve the maximum benefit to the City, it may be necessary for the City to
enter into a fixed price contract quickly.
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT,
at any point where it is determined to be advantageous, the Finance Director, in consultation with the
City Manager and Finance Committee Chair, is hereby authorized to enter into fixed price contracts for
natural gas supply.
IN CITY COUNCIL
January 26, 2009
Motion Made and Seconded
for Passage
Pas
CITY CLERK
O R D E R
(TITLE) ALthorizing the FinanrP nirertnr
to Enter Into Fixed Price Contracts for
Natural Gas Supply