DEPARTMENT: Parks, Facilities, and Fleet Management
FILE TYPE: Consent Action
TITLE
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Authorization To Purchase Fuel From State Of Minnesota Fuel Consortium Program
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PURPOSE/ACTION REQUESTED
Authorize the purchase of 70 percent of the County's anticipated unleaded and diesel fuel needs for the period of February 1, 2023, to January 31, 2024, on a fixed price basis from the State of Minnesota Fuel Consortium Program (Consortium) with the remainder being purchased under the State or local spot pricing purchasing programs.
SUMMARY
In 2022, Dakota County Fleet Management participated in the 14th year of the Consortium, which provides an option to purchase fuels at a fixed price. Prior to 2009, all County unleaded and diesel fuel needs were met through purchases on the spot price market. For 2022, participation in this State program enabled the County to lock in a fixed price of $2.82 a gallon for 70 percent of its unleaded fuel needs and a fixed price of $3.32 a gallon for 70 percent of its diesel fuel needs. In comparison with purchasing on the spot market, the ability to lock in the fuel purchased at competitive prices via the Consortium helped ensure accurate County budget planning as well as budget stability.
Due to the continuing success of the Consortium, the State will continue to offer this program to all its Cooperative Purchasing Venture (CPV) members in the nine-county metropolitan area. In 2022, this program has over 50 municipalities joining together to purchase over 15 million gallons of fuel. Although 2023 pricing is not yet available, historically municipalities have been able to secure lower prices per gallon by joining together in the Consortium.
The Consortium will provide CPV members an opportunity to purchase fuel based on two pricing strategies once again in 2023. Those scenarios include a fixed pricing and spot pricing. Fixed pricing is a fixed amount per gallon for an exact number of gallons to be purchased. Spot pricing is a fix...
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