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CITY COUNCIL AGENDA ITEM NO. 10

Meeting Date: June 10, 2008

Subject/Title: Adopt a Resolution increasing the amount authorized to be spent with Chevron Corporation for the 2007/08 fiscal year by $125,000 for a total amount not-to-exceed $465,000

Prepared by: Marna Huber, Management Analyst

Submitted by: Pamela Ehler, Director of Finance and Information Systems

RECOMMENDATION
Adopt a Resolution increasing the amount authorized to be spent with Chevron Corporation for the 2007/08 fiscal year by $125,000 for a total amount not-to-exceed $465,000.

PREVIOUS ACTION
On July 24, 2007, by Resolution No. 2007-167, City Council approved a list of vendors that staff estimated would exceed the $50,000 limit during the 2007/08 fiscal year.

On January 8, 2008, by Resolution No. 2008-8, City Council approved additional not to exceed dollar amounts with vendors exceeding the $50,000 limit for fiscal year 2007/08.

BACKGROUND
As part of the annual budget adoption, City staff includes budgeted amounts for ongoing services and supplies. The Purchasing Policy requires that purchases or services over $50,000 must be approved by City Council. On January 8, 2008, City Council approved fuel purchases from Chevron Corporation at a not to exceed amount of $340,000.

Chevron Corporation recently changed billing companies and the City received an invoice that included costs from March 21, 2008 through May 5, 2008. With fuel costs rapidly increasing, the cost per gallon has increased from an average per gallon rate of $3.13 in December 2007 to an average per gallon rate of $3.74 in April 2008. The cost per gallon continues to escalate. The use of Chevron Corporation within the City has steadily increased while the use of another vendor has decreased due to the quality of the fuel causing mechanical difficulties in the high use equipment such as street sweepers and solid waste trucks. Based upon increased usage and cost per gallon, the amount to be expended with Chevron Corporation for fiscal year 2007/08 should be increased to $465,000.

FISCAL IMPACT
No budget amendment is required as fuel costs have been included in the 2007/08 Adopted Operating Budget.


Attachment:
Resolution



RESOLUTION NO.


A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD INCREASING THE AMOUNT AUTHORIZED TO BE SPENT WITH CHEVRON CORPORATION FOR THE 2007/08 FISCAL YEAR BY $125,000 FOR A TOTAL AMOUNT NOT TO EXCEED $465,000


WHEREAS, as part of the annual budget adoption, City staff includes budgeted amounts for ongoing services and supplies; and

WHEREAS, as part of the requirements of the Purchasing Policy, staff brings forward purchases or services over $50,000 for each fiscal year for approval by City Council; and

WHEREAS, fuel costs per gallon have increased from $3.13 in December 2007 to $3.74 in April 2008; and

WHEREAS, the current authorized expenditure for fiscal year 2007/08 with the Chevron Corporation is $340,000 which due to increased usage and fuel costs shall be increased to $465,000.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood, that the amount to be spent with Chevron Corporation for the 2007/08 fiscal year is increased by $125,000 for a total amount not to exceed $465,000.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 10th day of June 2008 by the following vote:



 
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