Title
Intergovernmental Agreement - Fuel Purchases - Orland Fire Protection District and Orland Park Library
History
On September 28, 2005, Resolution 2005-12 was adopted by the Orland Fire Protection District (District) providing the authority for the District to enter into an Intergovernmental Agreement (IGA) with the Village of Orland Park for the purchase of fuel from the Village through the use of the Village’s fuel island dispensing facility.
On October 1, 2005, the Village of Orland Park Board of Trustees authorized the IGA for the District’s fuel purchases.
The existing IGA provides that only the actual cost of fuel may be billed to the District. The cost of fuel is defined as the gallons consumed, times the “Village’s cost per gallon.” A very small quantity of fuel is purchased by the Orland Park Library under a similar arrangement.
In both instances, no accommodation was provided within the IGA to share in the annual costs of permits, inspections or routine maintenance and repairs (Annual Maintenance). Similarly, no accommodations were provided for that sharing of expenses related to systems upgrades, or more major capital repairs that could include tanks, pumps, piping and the physical facility.
Staff has reviewed the Annual Maintenance and Capital costs paid solely by the Village for the past several years. These costs, as well as the fuel consumed by the Village and purchased by both the District and the Library are recapped within Exhibit 1.
The more major Capital cost work was last undertaken approximately ten years ago and consisted of the replacement of the three tanks, new piping, pumps and dispensing facility, as well as an electronic fuel dispensing management system at a cost of approximately $40,000. The anticipated life of the hard improvements was projected at the time to be approximately 15 years.
Presently, the fuel dispensing management system is no longer supported by the vendor and, like all electronic technology, this system long ago outlived its useful service life. Management reporting is non-existent or severely limited by today’s standards.
Public Works and Finance staff have reviewed the current status and are recommending that a new IGA be adopted by the Village, the District and the Library that will provide for the continued purchase of fuel, as well as the sharing of Annual Maintenance and Capital costs. By adding a few pennies per gallon to every gallon purchased by the District and the Library, their pro-rata share of costs incurred by the Village for the operation, maintenance and repair of the fuel dispensing operation will be paid.
It is recommended that for the Village’s FY2011, a total of $0.0352 per gallon be added to each gallon purchased by the District and the Library, $0.0207 for Annual Maintenance costs and $0.0145 for Capital costs. This per gallon amount will be recalculated at the beginning of each fiscal year, and will be based on the most current actual annual maintenance expenditure data that the Village has, anticipated capital expenditure data, as well as the most current usage by all parties. In addition, as there are monthly costs incurred by the Village related to the billing and payment of the monthly invoices provided to the District and Library for their fuel purchases, an annual Administrative Fee of $300 is recommended. This fee will be assessed on the first invoice of each fiscal year.
On February 7, 2011, this item was reviewed and approved by the Public Works and Engineering Committee and referred to the Board for approval.
INFORMATION PREVIOUSLY PROVIDED AS PART OF THE FEBRUARY 7, 2011, PUBLIC WORKS AND ENGINEERING COMMITTEE PACKET.
Financial Impact
This additional revenue will be credited to the Village’s General Fund. Revenue received from the Capital Cost portion of the per gallon surcharge will be reserved for future use. In future years, this will become a budgeted revenue source in the Village’s General Fund.
Recommended Action/Motion
I move to approve authorizing the Village President to enter into an Intergovernmental Agreement with the Orland Fire Protection District providing for the purchase of gasoline and diesel fuel from the Village of Orland Park per the terms contained within the Intergovernmental Agreement;
And
Approve authorizing the Village President to enter into an Intergovernmental Agreement with the Orland Park Library providing for the purchase of gasoline and diesel fuel from the Village of Orland Park per the terms contained within the Intergovernmental Agreement.