Annually the City purchases approximately 175,000 gallons of fuel for the City fueling depot. The City departments consume approximately 115,000 gallons of fuel annually. The other fuel is sold to other public entities such as Powell Township, the Marquette Downtown Development Authority, Northern Michigan University and Alger Marquette County Action Board. The City holds contracts to supply these entities with fuel at a markup of $0.22 per gallon to help cover repair and maintenance, replacement and other operating costs of the fuel system.

The current City process as approved at the June 13, 2011 Commission meeting, is using “point sales” or “spot sales.” Bids are obtained from distributors the day of the sale and the sale is awarded to the low bid. This process will be used for fuel purchases at both the Municipal Service Center and Cinder Pond Marina.

Fuel is charged to inventory when it is purchased. As fuel is consumed by the Motor Pool vehicles it is charged to the Fuel System Fund. The Fuel System Fund has $535,000 budgeted for FY 2024. The other entities purchasing fuel are billed monthly.

Reaffirm the current City procedure for purchasing fuel, and authorize the City Manager to approve the purchase of fuel under the procedure.