HomeMy WebLinkAbout2015-11-09 16-003 ORDERCOUNCIL ACTION
Item No. 16-003
Date: November 9, 2015
Item/Subject: Order, Authorizing the Execution of Fixed Rate Pricing Contracts
with the City's Current Fuel Suppliers
Responsible Department: Finance
Commentary:
The attached order would authorize the Finance Director or City Manager to execute fixed rate
pricing contracts with the City's current fuel suppliers for purchases through June 30, 2017. The
City had previously fixed fuel pricing through June 30, 2016.
With the current decline in the market price of fuel, City staff reached out to Dysart's, the City's
vendor for large diesel deliveries to determine if market pricing beyond June 30, 2016 was
favorable. Initial indications are that the City would have the opportunity to obtain favorable
pricing well into FY 17 (suppliers can only fix costs 18 months into the future). The City's
current pricing for diesel and propane through June 30, 2016 is $2.1054 and $1.30, respectively
per gallon.
By way of an example, the City and school purchase approximately 350,000 gallons of diesel
from Dysart's. The price per gallon in January 2014 was $3.40, in January 2015 was $2.13 and
through June 30 2016 it is $2.1054. Initial pricing beyond June 30, 2016 varies by month from
$1.8556 in July 2016 to $2.1790 in December 2016.
As timing may be of the essence to capture the current favorable market pricing, the intent
would be to minimize the downside risk to the City by authorizing City staff to execute fixed rate
pricing contracts with the City's fuel suppliers, provided the pricing is at or near current fixed
rate pricing. This item was reviewed and recommended by the Finance Committee at its
meeting of November 2, 2015.
Manager's Comments:
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
x Passage
First Reading
Referral
Department Head
City Ranager
4-,-P--
Finance Director
! i Solicitor
Page _ of _
16-003
NOVEMBER 9, 2015
Assigned to Councilor Sprague
CITY OF BANGOR
(TrME.) Order, Authorizing the Execution of Fined Rate Pricing Contracts with the
City's Current Fuel Suppliers
WHEREAS, the City of Bangor currently has a contract with fuel suppliers through June 30,
2017; and
WHEREAS, the City currently has fixed rates for fuel through June 30, 2016; and
WHEREAS, the City will have opportunities to have fixed rates for fuel through June 30, 2017.
By the City Council of the City of Bangor.
ORDERED, THAT the Finance Director or City Manager is hereby authorized to execute
documents necessary to fixed the rate for fuel with the City's current fuel suppliers for
purchases through June 30, 2017.
IN CITY COUNCIL
NOVEMBER 9, 2015
PASSED
CITY CLERJF