ITEM TITLE:
#25-24 - Amending the 2025 City of Valdez Budget to Recognize Fuel Flowage Revenue from Crowley Fuels LLC Fuel Dock Lease Agreements
SUBMITTED BY: Jeremy Talbott, Ports & Harbors Director
FISCAL NOTES:
Expenditure Required: 0
Unencumbered Balance: 0
Funding Source: 0
RECOMMENDATION:
Approve Resolution 25-24.
SUMMARY STATEMENT:
Resolution 25-24 amends the FY2025 city budget to recognize revenue from fuel flowage fees associated with the approved Crowley Fuels, LLC lease agreements.
On March 3, 2025, the Valdez City Council approved long-term lease agreements with Crowley Fuels, LLC with passage of Resolution 25-14 and Resolution 25-15. These leases included provisions for a fuel flowage fee to be assessed on all fuel moved through the harbor facilities.
Staff recommends approval of Resolution 25-24, recognizing the new revenue source established through these leases to ensure compliance with municipal financial management protocols.
The Ports & Harbors Commission reviewed the lease proposals and unanimously recommended approval, citing their alignment with strategic harbor development and revenue diversification goals. Similarly, the Planning & Zoning Commission reviewed the lease for compliance with land use regulations and voted to recommend approval, confirming consistency with the Valdez Comprehensive Plan and permitted use criteria.
As part of the implementation of the lease agreements, the Harbor Department will begin billing Crowley Fuels, LLC for the fuel flowage fee effective May 1, 2025.
This revenue stream was not included in the originally adopted FY2025 City of Valdez Budget. A formal budget resolution is required to recognize this anticipated revenue and ensure proper accounting.
Annual revenue from the Fuel Flowage Fee is projected to be $27,108.28, continuing annually through 2029 as part of the lease term.