HomeMy WebLinkAbout07399ORDINANCE NO. 7399
AN ORDINANCE APPROPRIATING AND AUTHORIZING A $400,000 INCREASE IN THE FLEET
MAINTENANCE COST OF GOODS SOLD LINE ITEM
WHEREAS, the cost of fuel has increased from $1.81 per gallon to $2.32 per gallon; and
WHEREAS, the Fleet Maintenance budget cannot accommodate this drastic increase;
WHEREAS, the increase in the cost of goods sold line item in the Fleet Maintenance
budget is necessary to allow for the purchase of fuel and repair parts through December 31, 2005;
and
WHEREAS, these costs will be passed on and absorbed in the user department's budget.
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council hereby appropriates and authorizes an increase of $400,000 to 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. The
additional costs will be paid for by the departments actually using the fuel and repair parts, and for
the most part will be absorbed in their existing budgets.
INTRODUCED October 24, 2005
BY Randy Thurston
Councilperson
APPROVED:
PRES1DENT 9F CITY CPWCIL
ATTESTED BY:
CITY CLERK
PASSED AND APPROVED November 14, 2005
T_ i L7 f� 4
Background Paper for Proposed
ORDINANCE
DATE: OCTOBER 24, 2005
DEPARTMENT: PUBLIC WORKS
DIRECTOR — DANIEL E. CENTA, P.E.
TITLE
( -039q
AGENDA ITEM tl -R 31
AN ORDINANCE APPROPRIATING AND AUTHORIZING A $400,000 INCREASE
IN THE FLEET MAINTENANCE COST OF GOODS SOLD LINE ITEM
ISSUE
Should the City Council appropriate and 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 2005.
RECOMMENDATION
Approval of this Ordinance.
BACKGROUND
The 2005 Fleet Maintenance budget contains a line item to account for the purchase of
fuel and repair parts used for 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 City department. Due to the
drastic increase in the price fuel, the estimate in the 2005 budget is estimated to be about
$400,000 short of what will be needed to complete the year. This adjustment will also be
included in the year -end budget ordinance as required by the City Charter.
FINANCIAL IMPACT
This action in itself does not 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 the additional cost can be
absorbed in the user department's existing budgets, thus no additional impact on the
overall City budget.