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To the Mayor and Members of the City Council
71ILM
June 14, 2011
Fort Worth continues to show the nation how partnerships mean progress as it took the lead on a
national effort to leverage the bargaining power of public agencies when purchasing the needed
fuel to keep our public fleets moving. The effort started small, but has blossomed into a one-of-a-
kind national model.
In 2002, Tarrant County and the City of Fort Worth cooperated to purchase bulk fuels to lower
fuel expenses by leveraging volume buying discounts. The City of Fort Worth became the
contracting agency. That cooperative effort was so successful that over a period of six years it
expanded from two partners consuming 3 million gallons of fuel to 27 partners consuming more
than 14 million gallons of fuel annually. The larger group called itself the North Texas Regional
Fuel Consortium and it included municipalities, counties, school districts and universities.
In July 2008, the Regional Fuel Consortium was featured as a model in Government Fleet
Magazine, and agencies in Georgia and Virginia began modeling similar consortiums.
The final product, The National Fuel Contract, is the first and only one of its kind, and it benefits
the City in two primary ways: It increases our bargaining power to leverage lower fuel prices and
it generates the city additional revenue through the rebate agreement. Under the agreement, the
City receives 8.333% of a one-cent administration fee the National IPA charges for each gallon of
motor fuel sold under this national cooperative contract. This rebate revenue is deposited in the
Equipment Services Fund to further reduce the cost of fuel and services to user departments.
Realizing a transition period would occur as government agencies sought approval to move to the
national contract, the City of Fort Worth negotiated a minimum first year rebate of $10,000.
Currently, there are 16 government agencies using the national fuel contract including twelve of
the North Texas Regional Fuel Consortium members that transitioned to the national contract.
In the first year
• the agreement, the City saved $39,787 dollars in fuel expenses and received
the $10,000 minimum rebate for a total first year savings • almost $50,000. As we pass the mid
way point • the second year, projections show that the city could realize almost $40,000 in
annual fuel savings and a rebate of more than $16,400.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXA9
A�
To the Mayor and Members of the City Council
•
June 14, 2011
SUBJECT: FORT WORTH SETS THE BAR WITH NATIONAL FUEL CONTRACT
TO REDUCE FUEL COSTS AND EARN ADDITIONAL REVENUES
Today, because of the great success of this national partnership, Government Fleet Magazine is
once again interested in Fort Worth's leadership and is scheduled to publish an article in July
2011. Once this article is on the news racks, we expect more public entities to jump on board the
National Contract further strengthening our momentum, saving tax pay dollars and earning
additional revenue to support essential Fort Worth services.
If you have any questions regarding this information, please contact Jack Dale, Purchasing
Manager, at (817) 392-8357 or Wayne Corum, Equipment Services Director, at (817) 392-5118.
om Higgins
Interim City Manager
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