Fuel Management

Fort Wayne Approves New Fuel Contracts

April 07, 2011

FORT WAYNE, IN – Fort Wayne’s City Council has approved new three-year fuel contracts for the City’s fleet, which covers diesel, no-lead gasoline, and B20 fuels. The contracts are with AG Plus Diesel for the diesel and B20 fuels and Petroleum Traders for the no-lead gasoline fuels. The cost for the fuel is budgeted at $3,696,263, according to City documents.

During the City Council meeting, Council members asked the City Fleet Manager and Director Larry Campbell a number of questions related to the previous fuel-hedging contract the City had in place. The contract covered 70 percent of the fuel the City had purchased. Campbell said he and City Purchasing Director Jim Howard decided to discontinue the contract after the City lost roughly $12,000 in 2010. Market conditions kept gasoline prices lower than the top-end price for the fuel contract.

The new contracts allow the City to lock in pricing, for up to six months at a time, for a set number of gallons of fuel. The contract also covered fuel for police vehicles. The fuel contracts would cover the entire fleet of vehicles owned by the City, Campbell stated.

City council members also asked about fuel testing due to issues Fort Wayne had with a small number of fuel deliveries in its previous contract with Petroleum Traders. Campbell said the City implemented fuel testing procedures years ago after receiving questionable fuel and sent fuel that didn’t meet specifications back. The new contract with Petroleum Traders includes a provision to test fuel up to twice a year at the company’s expense.

With the new fuel contracts in place, Campbell told the City council he estimates that the City’s fleet will come in close to budget, possibly slightly over. “We’re going to be very close,” he said. “It could be $50,000 over. I would have to come back to the council for approval toward the end of the year.”

When asked about the estimated fuel costs for the fleet based on miles driven this year, Campbell said he was waiting to run the numbers until the City’s fleet hit its busy season in order to get a more accurate estimate.

The City council also asked Campbell's opinion of changing the City's take-home policy to reduce employee use of City vehicles if costs come in over budget. Campbell said the topic would be open to discussion.

By Greg Basich

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