Explanation
Background: This legislation authorizes the Finance Director to issue purchase orders for the purchase of credit card fuel and bulk fuel (gasoline and diesel fuel). Formal competitive bids were solicited by the Purchasing Office and contracts are in place for these commodities.
Fiscal Impact: The Fleet Management Division budgeted a total of $5.56 million for the purchase of motor fuels in 2005. Ordinance # 0056-2005 passed February 9, 2005, authorized $4.1 million for fuel purchases and Ordinance # 0791-2005 passed April 20, 2005, authorized an additional $1.44 million.
As of the 2005 Second Quarter Financial Review, the Fleet Management Division projected a fuel deficit of $1.4 million, at an average cost of $1.97 per gallon. Since the mid-year financial review, however, the division has witnessed dramatic increases in fuel prices. As of August 29, the average fuel cost was $2.30 per gallon (for all grades of fuel). As of September 1, 2005, fuel prices rose sharply to an average cost of $2.80 per gallon. The latest price increases are due directly to the damage caused to oil production, pipeline, supply facilities and refineries by hurricane Katrina. The Fleet Management Division projects fuel prices to remain high through September (close to the current $2.80/gallon) and then level off at approximately $2.50/gallon for the remainder of 2005. These fuel price increases will require the city to expend an additional $800,000 for fuel before year-end, escalating the combined fuel deficit to $2.23 million. Total fuel expenditures for 2005 will be approximately $7.79 million.
This ordinance authorizes an expenditure of $1.43 million. After the 2005 Third Quarter Financial review, the Fleet Management Division and Finance will re-evaluate fuel prices through the remainder of 2005 and present another fuel expenditure ordinance to Council for approval.
The city spent $5.2 million for fuel in 2004 and nearly $4.7 million for fuel in 2003. The Fleet Management Division recovers its expenditures by billing user agencies for labor, parts and fuel. The impact of higher fuel prices is borne by user agencies. This ordinance is contingent on Ordinance #1539-2005, which appropriates additional funds in the Fleet Management Services Fund and also transfers funds within the General Fund and Other Funds so that divisions have the means to pay for the additional fuel (when charged) by Fleet Management).
Emergency action is requested in order to ensure an uninterrupted purchase of credit card and bulk fuels.
Title
To authorize the Finance Director to issue purchase orders for the purchase of credit card and bulk fuel for the Fleet Management Division; to authorize the expenditure of $1,430,000.00 from the Fleet Management Services Fund, and to declare an emergency. ($1,430,000.00)
Body
WHEREAS, the Fleet Management Division, Public Service Department has a need to purchase credit card and bulk fuel; and
WHEREAS, Universal Term Contracts (UTC) have been established through the formal competitive bid process; and
WHEREAS, an emergency exists in the usual daily operation of the Fleet Management Division, Public Service Department, in that it is immediately necessary to establish purchase orders for the purchase of credit card and bulk fuel so as not to jeopardize or interrupt the provision of vital city services, thereby preserving the public health, peace, property, safety, and welfare, now, therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Finance Director be and hereby is authorized to issue purchase orders for the Public Service Department, Fleet Management Division, per the terms and conditions of Universal Term Contracts, as follows:
BP Products - State GDC027E / CT#OT914204E
CC# 362440313 expires 12/15/07
Gasoline
Object Level Three 2280
Contract expires - 4/30/06
BP Products - State GDC027E / CT#OT914204E
CC# 362440313 expires 12/15/07
Diesel Fuel
Object Level Three 2286
Contract expires 4/30/06
Earhart Petroleum Incorporated - County ITB 2005-02-51
CC# 311007351 expires 4/6/08
Gasoline
Object Level Three 2286
Contract expires 8/31/07
Earhart Petroleum Incorporated - County ITB 2005-02-51
CC# 311007351 expires 4/6/08
Diesel Fuel
Object Level Three 2286
Contract expires 8/31/07
US Bank Voyager - FL001215
CC# 760476053 expires 04/15/07
Credit Card gasoline
Object Level Three 2280
Contract expires - 7/31/08
Section 2. That the sum of $1,430,000.00, or so much thereof as may be necessary, be and hereby is authorized to be expended from the Fleet Maintenance Fund, Fund 513, Department No. 59-05, OCA Code 591347, Object Level One Code 02 as follows to pay the cost thereof:
Object Level Three Code Amount
2280 $ 1,095,000.00
2286 $ 335,000.00
Section 3. That for reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.