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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