Apache Junction staff recommends renewing bulk fuel contract with Synergy Petroleum

City of Apache Junction staff asked the City Council at a June 2 work session to approve a bulk fuel agreement with Synergy Petroleum LLC for the next fiscal year under a state cooperative contract, with a not-to-exceed amount of $840,000.

The recommendation, presented by Ted Wolf, Public Works Director, would authorize the city to purchase fuel for municipal vehicles and participating entities under the state contract. Wolf told the council the city entered the current agreement last fiscal year on a state contract "in the amount not to exceed $840,000." He said staff recommends approving the same arrangement for the coming fiscal year and that he was "open to questions."

The item drew questions from council members about prior usage and savings. "How much did we use last year?" asked Council member Cross. Wolf said his recollection was the city used about $780,000 in fuel last year for all city vehicles. He said finance staff had informed him that using the state cooperative contract was "a little bit cheaper this year" than the city's prior contract, which Wolf attributed to the volume the state contract procured. Wolf also clarified that the contract covers fuel used by other city-affiliated operations that reimburse the city, including sewer, water and fire, but does not include the school district.

Wolf told the council that unspent funds from the current fiscal year would not carry forward into the next contract amount: "We start from scratch," he said. He also said the city does not pay for fuel up front; it only pays for what it uses.

Council members were told staff intends to place the agreement on the consent agenda for the council meeting in two weeks.

The council did not take a formal vote during the work session; staff indicated the item will be scheduled on consent for a future meeting where the council can act.