County enters into bulk fuel purchasing program

Talk about it

Washington County is taking advantage of the recent decline in gasoline prices and a new state run bulk purchasing program to save nearly $240,000 in its 2009 budget, public works officials told county commissioners at a meeting this week.

Just before the new year the county entered into a fuel consortium purchasing program with more than two dozen other metro area cities, counties and school districts, where the partnering entities can buy gasoline and diesel in 50,000 gallon increments at an annual locked in rate.

The county is currently locked into the program with a gasoline price between $1.83-$1.95 per gallon, depending on the quantity it purchases monthly, said Wayne Sandberg, Washington County deputy director of public works.

“Keep in mind, that is the price including the full gasoline taxes,” Sandberg said, noting that the county does not have to pay federal gas tax on fuel purchased for the county sheriff’s department vehicles or any taxes it’s public works equipment does not use on the road.

The program will also allow the county to purchase diesel at a locked in rate between $2.40 and $2.63 per gallon, depending on monthly quantity.

The county expects to purchase nearly 190,000 gallons of gasoline and 86,000 gallons of diesel in 2009. When public works officials budgeted for 2009 fuel expenditures early last year, gasoline was more than $3 per gallon and diesel was above $3.50 per gallon. Those prices are what got county commissioner and department heads discussing ways to cut down on increasing fuel expenditures.

Eighty percent of the county’s fuel will be purchased through the consortium program, with the remaining 20 percent purchased at the market rate, Sandberg said.

“That allows us to hedge a little bit in case there is a price dropping we still get 20 percent for the floor price,” Sandberg told commissioners. “Eighty percent is locked in with what I believe is a very good rate looking forward.”

County commissioners officially reaffirmed their support for the cost-saving measure during their Jan. 6 meeting.

Commissioner Gary Kriesel said he’s pleased with the savings the county will be able to trim off its 2009 budget and the efforts of each department into investigating the benefits of the bulk purchasing program.

“I think this is just an outstanding edge against rising fuel costs,” Kriesel said. “I commend the sheriff’s department and management for helping to coordinate the effort.”

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