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Meeting Date:
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4/10/2024 - 7:00 PM
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Category:
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Action Items
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Type:
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Action
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Subject:
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Approval of Fuel Purchasing Agreement between CUSD 200 and Blu Petroleum
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Vision 2026:
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Operational Excellence Strategies 2 Maintain strong fiscal health of the organization.
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Background
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CUSD 200 has an existing contract for bus transportation services with Illinois Central School Bus, that includes all daily general and in-district special education routes. The contract with Illinois Central includes a fuel surcharge clause, which requires CUSD 200 to reimburse Illinois Central for diesel fuel that costs more than $1.95 per gallon, plus the federal excise tax ($0.243). CUSD 200 has negotiated with Illinois Central to remove the fuel surcharge from future contractual agreements by taking over the purchase of fuel directly by the Business Office in CUSD 200.
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File Attachment:
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Summary:
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Currently, Illinois Central purchases diesel and regular gas from Blu Petroleum. With the change in contract language contained within the three-tear extension that has been proposed, CUSD 200 will take over the purchasing all diesel and regular gas directly with Blu Petroleum starting on July 1, 2024. The initial contract with Blu Petroleum will be for one fiscal year. The change allows CUSD 200 to accomplish multiple goals:
1. Permanently remove the fuel escalation clause from the contract with Illinois Central.
2. Provide CUSD 200 will full purchasing control of all fuel required by Illinois Central to provide transportation services for CUSD 200.
3. Allow CUSD 200 to hedge/secure future fuel needs at pricing that is beneficial to the District. Illinois Central does not currently hedge fuel.
4. By moving the purchase of fuel from Illinois Central to CUSD 200, the District will not be required to pay County and State sales taxes, saving an estimated $0.25-$0.30 per gallon. This is in addition to not being required to pay the federal excise tax ($.0243), which brings the total tax savings to nearly $0.50 per gallon of fuel. The estimated tax savings by purchasing direct is $75,000 per school year.
5. By moving to a direct fuel purchase, the district will also receive a credit from Illinois Central since fuel was included in the renewal proposal. The credit for the 2024-25 school year will be $203,986. It is expected that the credit will be applied equally over a 10 month period.
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Funding:
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Fund 40 - Transportation Fund
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Board Policy
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4:110 Transportation
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Recommendation:
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It is recommended that the Board of Education approve a move to direct fuel purchasing and the one-year fuel purchasing agreement between CUSD 200 and Blu Petroleum.
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Approvals:
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Recommended By:
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Signed By:
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Brian O'Keeffe - Asst Superintendent Business Services
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Signed By:
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Jeff Schuler - Superintendent
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Vote Results:
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| Original Motion | | Member Angela Blatner Moved, Member John Rutledge seconded to approve the Original motion 'It is recommended that the Board of Education approve a move to direct fuel purchasing and the one-year fuel purchasing agreement between CUSD 200 and Blu Petroleum.'. Upon a Roll-Call Vote being taken, the vote was: Aye: 7 Nay: 0. | | The motion Carried 7 - 0 | | | | | Brad Paulsen | Yes | | Rob Hanlon | Yes | | Dave Long | Yes | | Angela Blatner | Yes | | Julie Kulovits | Yes | | Erik Hjerpe | Yes | | John Rutledge | Yes | |
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