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
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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