Council Agenda - City of Burbank

Tuesday, May 18, 2004

Agenda Item - 7

 

CITY OF BURBANK

FINANCIAL SERVICES DEPARTMENT

MEMORANDUM
 

 
DATE: May 18, 2004
TO: Mary Alvord, City Manager
FROM:

Derek Hanway, Financial Services Director

Bruce Feng, Deputy City Manager/Public Works and Capital Projects
SUBJECT:

Approval of Fuel Purchase Agreement with the Burbank Unified School District (BUSD)

PURPOSE

 

The purpose of this staff report is to recommend that City Council approve a Fuel Purchase Agreement with the BUSD.

 

BACKGROUND

 

As part of the City - District collaborative ventures matrix, the selling of fuel to BUSD was one area viewed as a possible savings for the District.  As of January 16, 2004, the City and BUSD have been operating a pilot program in order to assess the feasibility of this arrangement. The pilot program consisted of a sample of BUSD�s ground vehicles as well as their warehouse truck. The pilot program was seamless and worked well for both parties, so it was the consensus of both City and BUSD staff to recommend that we move forward with formal adoption of an agreement by both governing bodies.  BUSD staff presented this agreement to the School Board for approval on May 6th, and it was approved.

 

ANALYSIS

 

The basic terms of the agreement are:

  1. The price for any fuel BUSD purchases from the City shall be the City�s actual cost, which shall include the costs of the fuel, plus all applicable federal and state fuel taxes, plus a 5% administrative fee.

  2. City will invoice BUSD monthly, and such invoices shall be net payable 30 days upon receipt.  There will be a 1% per month late fee for all payments made after 30 days.

BUSD�s annual fuel usage is approximately 24,000 gallons, and it is projected that BUSD will average savings of 15 to 20 cents per gallon. With this additional 2,000 gallons per month volume, the City may be able to receive increased discounts on our fuel purchases, which will benefit both the City and BUSD. 

Lastly, both City and BUSD staff feel that this agreement is a good base to build upon for future joint efforts that are mutually beneficial for both the City and BUSD.

 

FISCAL IMPACT

 

This agreement is cost neutral to the City, although as noted above, there may be potential savings on fuel purchases due to larger volumes which would benefit both agencies.  It is projected that BUSD will save approximately $3,000-5,000 per year on fuel purchases.

 

RECOMMENDATION

 

It is recommended that the City Council approve the proposed resolution approving the Fuel Purchase Agreement between the City of Burbank and the Burbank Unified School District.

 

 

 

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