Um . . . remember how we desperately needed the money from bus fares because of fuel costs . . . turns out . . .
From: Statz, Andrew
Sent: Monday, March 23, 2009 4:14:31 PM
To: ALL ALDERS
Cc: MY GROUP; Vandenbrook, Bill; Kamp, Charles; Brasser, Dean; Whitehead, Randy; Fruit, Tim; Bohrod, Daniel
Subject: fuel contractLast Friday, we entered into a fixed-price contract for diesel and unleaded gasoline at Fleet Services and diesel at Metro Transit. The contract runs from January 2010 through the end of December 2010.
The contract amount for Metro diesel is $1.9784 per gallon. Fleet diesel is $2.2874 and gasoline is $2.139 per gallon. The higher rates for Fleet are due to an exemption from state excise tax that applies to public transit but not municipal fleet operations. By combining the Fleet and Metro bids, we saved two cents per gallon.
When dealing with fuel contracts, there is always a per gallon premium added to a vendor’s bid. So, it is hard to compare the contract per gallon amount with prices at the pump.
The first attachment helps illustrate that it appears now is a good time to lock. These are “at the pump” prices for diesel, so it is not a direct dollar-for-dollar comparison but it illustrates the historic trends in diesel prices. We are currently back down to around the since-2000 average price. There appears to be more room for fuel prices to go up from today’s levels and less room for them to go down for any extended period of time.
The second attachment is a history of fuel expenditures for Metro. With the 2010 contract, we will be slightly above 2005 costs and well below the total for every year since then. The third attachment is a similar history for Fleet. For diesel, we essentially return to the amount paid in 2006. For gasoline, we locked in well below 2006 and every year since.
Combined, the contract for 2010 is about $2.6 million less than the amount budgeted for 2009.
Hmmm . . . did really need those fares increased? All the fare increase might raise in revenues is $700,000.
