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HomeMy WebLinkAbout~Master - Fuel contracts for the remainder of CyRide's fuel purchases RESOLUTION NO. 12-040 RESOLUTION APPROVING UP TO FIVE, TWO-MONTH FUEL CONTRACTS AND ACCEPT FIXED-RATE PLUS MARK-UP/DEDUCT FOR THE REMAINDER OF CYRIDE'S FUEL PURCHASES FOR THE CITY OF AMES,IOWA WHEREAS, for the past three years, CyRide has purchased a portion of its fuel under contracts in an effort to stabilize and possibly gain financial benefits from a certain type of fuel purchasing method; and, WHEREAS, the decision to switch to this type of purchasing arrangement was a direct response to the volatile fuel market in 2007-08 when prices increased from$2.00 to$4.00 per gallon in a short span of time; and, WHEREAS,after several experiences,Cyride staff has identified June through March as the best months for contracting,based on the quantity of fuel purchased and the volatility of fuel during these months; and, WHEREAS, CyRide is currently purchasing fuel off of a contract that will expire in March 2012,and to date,the transit system has averaged$3.12 per gallon for the 2011/12 budget year;and, WHEREAS, additionally, staff monitors the contract versus market rate and has realized $12,382 in savings this budget year, utilizing a fuel purchasing method; and, WHEREAS, it is staff s belief that CyRide has gained substantial benefits from contracting for fuel—meeting its goals of stabilizing the fuel line item and realizing budget savings; and, WHEREAS,with current contracts expiring in March and the best months for entering into a contract approaching, CyRide will need to decide if it will enter into a new contract; and, WHEREAS, staff has worked with the City's Purchasing Division to develop a method to procure fuel that does not violate City of state purchasing requirements, and the process is as follows: 1)gain approval from the Ames Transit Agency Board of Trustees and the City Council for a total fuel contract price not to exceed$735,000 for five, two-month contracts for up to 210,000 gallons fuel;2)in conjunction with the Purchasing Division,prepare a Request for Proposals for fuel contracts due to the City in February or March 2012;and,3)at the time the bids are received,award up to five,two-month contracts to the lowest bidder that does not exceed the approved total amount and that it is believed will benefit CyRide; and, WHEREAS, the not-to-exceed amount for the fuel contracts bid is calculated based on 210,000 gallons multiplied by the 2012/13 budget price per gallon of$3.50 per gallon; and, WHEREAS, the Transit Board approved a not-to-exceed amount of $735,000 for fuel purchases at its January 19, 2012, meeting. ADOPTED THIS 14"' day of February, 2012. Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Davis Seconded by: Larson Voting aye: Davis, Goodman, Larson, Orazem, Szopinski Voting nay: None Absent: Wacha Resolution declared adopted and signed by the Mayor this 14t'day of February, 2012.