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Department Approval <br />lls1Spvq+-J� <br />REQUEST FOR COUNCIL ACTION <br />Date.- 10/27/08 <br />Item No..- 12.b <br />City Manager Approval <br />Item Description.- Authorization of Joint Fuel Purchase for City Fleet <br />I BACKGROUND <br />2 Staff has been meeting jointly with many local, regional, and state agencies regarding bidding of fleet <br />3 fuel jointly to lock in a stable price to ease budget uncertainty. Given the recent fall of wholesale fuel <br />4 prices, we feel it is time to move quickly to bid jointly with these agencies and lock in a price for 2009 <br />5 for gasoline and diesel fuel. <br />6 <br />"7 We estimate the joint bid may commit purchase of up to 10 million gallons of fuel. Because we will be <br />8 locked into this contract if we participate, we feel the Council should be aware and support this joint <br />9 bid. We feel we have a potential to save the city thousands of dollars by committing to this contract. As <br />I ('-) no one knows what the market may ultimately do next year, there is some risk that the price could go <br />"I'll even lower. Once we commit to participating, we will be locked in to this contract. We will have more <br />12 details of this purchase opportunity at your meeting as this bid document is developed over the next <br />13 week or two. We will also be reviewing our anticipated fuel needs for 2009 for this bid process and what <br />14 our level of participation should be on a monthly basis. <br />16 The city purchases many items and supplies from joint purchasing contracts. We have been a member of <br />I 7 the State of Minnesota Department of Administration Cooperative Purchasing Venture program for <br />I many years. These purchases have saved the city thousands of dollars over the years due to the volume <br />19 of these contracts. <br />20 <br />2 1 The staff committee charged with recommending energy reduction measures will be considering goals <br />22 for fleet fuel usage reductions in the next month. Reduction combined with wise purchasing decisions <br />23 will help to achieve budgetary goals in this area. <br />24 <br />25 The following is our recent history of fuel purchases.- <br />26 <br />2005 - 2006- 2007 - 2008, Fuel Usage & Costs <br />Unleaded Diesel Unleaded & <br />Diesel <br />Gallons Average per Cost Gallons Average per Cost Total Cost <br />gal gal <br />2005 63)948 $1.63 $116751.00 27)908 $1.75 $48)848.00 $165599.00 <br />2006 68)009 $2.23 $152)452.00 23)989 $2.16 $51)854.00 $204)306.00 <br />2007 70522 $2.44 $172)294.00 28)243 $2.47 $69)117.00 $241)411.00 <br />2008, to 64)000 $3.08 $197)332.00 20)000 $3.42 $68)322.00 $2651654.00 <br />date , I I I I I I I <br />Page I of 2 <br />