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Department Approval <br />� <br />Item Description <br />BACKGROUND <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Authorization of Joint Fuel Purchase for City Fleet <br />Date: 10/26/2009 <br />Item No.: 7.g <br />City Manager Approval <br />As in 2009, staff has been meeting jointly with many local, regional, and state agencies <br />regarding bidding of fleet fuel j ointly to lock in a stable price to ease budget uncertainty. We feel <br />it is best to once again bid j ointly with these agencies and lock in a price for 2010 for gasoline <br />and diesel fuel. <br />Because we will be locked into this contract if we participate, we feel the Council should be <br />aware and support this j oint bid. We feel we have a potential to save the city thousands of dollars <br />by committing to this contract. As no one knows what the market may ultimately do next year, <br />there is some risk that the price on the open market could be more favorable. If we commit to <br />participating again for 2010, we will be locked in to this contract. <br />The city purchases many items and supplies from joint purchasing contracts. We have been a <br />member of the State of Minnesota Department of Administration Cooperative Purchasing <br />Venture program for many years. These purchases have saved the city thousands of dollars over <br />the years due to the volume of these contracts. <br />Staff will provide further information on this bid opportunity prior to your meeting. <br />Policy Objective <br />Staff strives to find the most cost effective purchasing opportunities to meet budgetary <br />objectives. Many purchasing options are subject to market volatility. We use the best <br />information we are able to obtain and consider historical fluctuations in the market to <br />recommend purchasing authorizations. All purchasing must comply with statutory requirements. <br />Financial Implications <br />We are anticipating that participation in this fuel bid will assure that 2010 fleet fuel purchases <br />are within the recommended budgetary amount. Current market pricing is approximately 35% <br />higher than our contract price for 2009 which will have a significant impact on 2010 budgets if <br />the contract price is similar. Fuel purchases are funded in department budgets and total <br />approximately $250,000. <br />Staff recommendation <br />Staff recommends continuation of our participation in this cooperative purchasing venture. <br />Page 1 of 2 <br />