Title
Fiscal Year 2022 1st Quarter City of Gainesville Fuel Hedging Program Performance Report (B)
Finance Committee to review the Fiscal Year 2022 1st Quarter City of Gainesville Fuel Hedging Program Performance Report.
Explanation
The City of Gainesville’s Fuel Hedging Policy, effective April 27, 2020, Section 5 “Execution, Monitoring and Reporting” requires quarterly reports that provide an analysis of the status of the program’s performance over the last quarter for the City.
Strategic Connection
Goal 5: "Best in Class" Neighbor Services
Fiscal Note
In the first quarter of FY22, petroleum fuel costs not including hedging were approximately $2.62 per gallon. Net of hedging, the fuel cost was approximately $1.70 per gallon versus a weighted average budgeted cost for diesel and gasoline for FY22 of about $2.11 per gallon. Actual volume consumed was about 78,000 gallons less than budgeted. The lower price and lower volume consumption caused a positive budget variance for the quarter of approximately $322,000 including the effect of the hedge. The Fuel Hedging Program produced a negative fuel cost (hedging realized gain) of approximately $354,000 or approximately $0.92 per gallon. As of December 31, 2021, there was an unrealized gain (contingent future negative fuel cost) of $413,007 that corresponds to the time period January 2022 through November 2022. This is an unrealized gain of about $0.25 per gallon on average for the time period for diesel and gasoline combined.
Recommendation
The Finance Committee 1) Review and accept the submitted Fuel Hedging Program Performance Report; 2) Refer the submitted Fuel Hedging Program Performance Report to the City Commission for review and acceptance.