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HomeMy WebLinkAbout10249RESOLUTION NO. 10249 A RESOLUTION AUTHORIZING A $300,000 INCREASE IN THE FLEET MAINTENANCE COST OF GOODS SOLD LINE ITEM WHEREAS, The cost of fuel has increased from eighty -five cents per gallon to one dollar and forty -four cents per gallon ; and WHEREAS, the budget did not anticipate this drastic increase; and WHEREAS, it is necessary to immediately increase the cost of goods sold line item in the Fleet Maintenance budget to allow for the purchase of fuel through December 31, 2004; and WHEREAS, these cost will be passed on and absorbed in the user departments budgets. BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council hereby authorizes an immediate $300,000 increase in the cost of goods sold line item in the Fleet Maintenance Division budget. SECTION 2. This authorization will be included in the year -end budget ordinance adjustment. This additional cost will be paid for by the Departments actually using the fuel, and for the most part will be absorbed in their existing budgets. INTRODUCED October 25, 2004 BY Robert D. Schilling Councilperson 4100. 010247 '._w_ Background Paper for Proposed RESOLUTION AGENDA ITEM # SA" DATE: DECEMBER 9, 2003 DEPARTMENT: FINANCE DEPARTMENT ROBERT HAIN, FINANCE DIRECTOR TITLE A RESOLUTION AUTHORIZING A $300,000 INCREASE IN THE FLEET MAINTENANCE COST OF GOODS SOLD LINE ITEM. ISSUE Should City Council authorize an increase in the cost of goods sold line item in the Fleet Maintenance budget to allow for the purchase of fuel and repair parts for the City's Fleet through the end of fiscal year 2004. RECOMMENDATION The Staff recommendation is, Approval of Resolution. BACKGROUND The 2004 Fleet Maintenance budget contains a line item to account for the purchase of fuel and repair parts used in the City's Fleet. As City Departments are charged for fuel and repair parts used, the cost of those items is removed from inventory in Fleet maintenance and expensed as a cost of goods sold. Fleet Maintenance must then purchase additional inventory to provide availability to the City Departments. Due to the dramatic increase in the price of fuel during 2004, the estimate in the 2004 budget is now estimated to be about $300,000 short of what will be needed to complete the year. This request is being presented in the form of a resolution due to the immediate need. This adjustment will also be included in the year -end budget ordinance as required by the City Charter. FINANCIAL IMPACT This action does not in itself require additional fund requirements in the user departments. At the time of consumption the user departments will be required to pay Fleet Maintenance and recognize the cost. It is felt that that additional cost can be absorbed in the user departments existing budgets, thus no additional impact on the overall City budget