Laserfiche WebLink
wwko-w SH"L+E <br /> REQUEST FOR COUNCIL ACTION <br /> Date: 11/28/2011 <br /> Item No.: 7 • c <br /> Department Approval City Manager Approval <br /> Item Description: Authorization of Joint Fuel Purchase for City Fleet <br /> BACKGROUND <br /> Staff has been participating with local, regional, and state agencies in the joint bidding of fleet <br /> 3 fuel to lock in a stable price to minimize budget uncertainty. We feel it is best to once again bid <br /> 4 jointly with these agencies and lock in a price for 2012 gasoline and diesel fuel purchases. <br /> 5 Because we will be locked into this contract if we commit to participate, we feel the Council <br /> 6 should authorize this joint bidding. We estimate we have saved approximately 17% over the <br /> "7 open market pricing for fuel by participating in this contract for 2011. We feel we again have <br /> 8 the potential to save on fuel purchases by committing to this contract. No one can predict with <br /> 9 any certainty what the fuel market may ultimately do next year. There is some risk that the price <br /> '1 0 on the open market could be more favorable. If we commit to participating again for 2012, we <br /> 1,1 will be locked in to this contract. <br /> 1 d"'? The city purchases many items and supplies from joint purchasing contracts. We have been a <br /> '1 3 member of the State of Minnesota Department of Administration Cooperative Purchasing <br /> '14 Venture program for many years. These purchases have saved the city thousands of dollars over <br /> '1 5 the years due to the volume of these contracts. <br /> '1 6 POLICY OBJECTIVE <br /> 1��7 Staff seeks to find the most cost effective purchasing opportunities to meet budgetary objectives. <br /> '18 Many purchasing options are subject to market volatility. We use the best information we are <br /> '1 9 able to obtain and consider historical fluctuations in the market to recommend purchasing <br /> 120 authorizations. All purchasing must comply with statutory requirements. <br /> dll� �� FINANCIAL IMPLICATIONS <br /> dll�Ydll; We are anticipating that participation in this fuel bid will be our best opportunity to ensure stable <br /> `23 fuel pricing for 2012 fleet fuel purchases. Current market pricing has dropped to 7.5 %higher <br /> 24 than our contract price for 2011 which will have some impact on 2012 budgets if the contract <br /> `25 price is similar or higher. Fuel purchases are funded in department budgets and total <br /> `26 approximately $329,300. <br /> dll <br /> 7 STAFF RECOMMENDATION <br /> '28 Staff recommends continuation of our participation in this cooperative purchasing venture. <br /> Page 1 of 2 <br />