HomeMy WebLinkAbout2006-09-11 06-320 ORDERItem Ren, 06 320
Date: January 27, 2003
Rom/Subject.• Order, Authorizing the City Manager In Enter Into a Fixed Price Contract with Irving Oil
Corp. for Various Fuel and Energy Products for Fiscal Year 07
Responsible Department: Purchasing
Cbmmemaryi _
Over the last few years, the City has attempted, when possible, to purchase No.2 fuel oil and diesel fuel
on a fixed price basis. The market for these products has been extremely volatile over this period, and
it is often necessaryto make a quick decision to lock In a price while that price remains available. In
recent weeks, the price of No. 2 fuel oil has been declining and is approaching the amount the City
budgeted for this product ($2.20 per gallon). As a result, we are seeking the authority to lock in prices
wtthoutihe delay required to seek Finance Committee approval. Irving Oil is our previouslyselected
supplier.
I would also note that at this point, energy companies are not offering fixed price contracts for diesel fuel
given the impending change required by regulations requiring a lower suffurcoment. Nevedheless,this
order would also allow us to fix the price for diesel should that option become available.
This is generally the same approach that has been taken in prior years. Wearehopefulthatwewill
soon be in a position to lock in the price of heating fuel at or below the amount budgeled by the City.
Given the ongoing uncertainties surrounding the energy market, we recommend your approval
Department Head
Manager's Comments:
Recommend approval. c
City Manager
Associateal Rrtomatlom:
Budget approval:
Finance Director
City Soldier
$otroduced for
Passage
_ First Reading Page _ of
Rehrml
06 320
Asargned to Coavcilm Bares SeP[em6er ll. 4006
CITY OF BANGOR
_..(TITLE.) Order, Authorization for Me City. Manager to -Enter Into Fixed Rice Contracts for Fuel Oil for --
Fiscal Year 07
WHEREAS, energy prices are highly volatile and difficult to predict; and
WHEREAS, It has been Me recent practice of the City to lock -in fixed fuel prices for each fiscal year in
an effort to reduce both cost and risk; and
WHEREAS, fuel prices are curtentiy significantly higher than dee fixetl prig paid by the City last year;
and
WHEREAS, fuel prices may become more favorable at some time in the future; and
WHEREAS, in order to achieve the maximum benefit to the Citi, it may be necessary fur One City M
anher into a contract quickly.
NOW, THEREFORE, BE R ORDERED BY THE CRY COUNCIL OF THE CRY OF BANGOR, THAT,
at any point where it is determined to be advantageous, the City Manager is hereby authorized to
enter into fixed price contracts with Wing Oil Corp. for varies; fuel and energy products, including No.
2 fuel oil and diesel fuel, for the Ckys Fiscal Year 07.
IR CIY4 MUCIL
September 11. 2006
Motion Daae ani seconded
for p9
yea
Ps
VFTY
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A 06-320
0 HDER
fpyyl,DAAutlerization for the City
Dauager Co Cnterto a tial
Year07 a for Fuel 031 for Fiscal
Year 0]
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