m-bathcounciladv-010209 Bath bets fuel costs have bottomed

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BATH — The City Council will consider authorizing City Manager Bill Giroux to seek bids for fuel for the next fiscal year at its meeting on Jan. 7.
The city solicited bids about six weeks ago for fuel through the end of the current fiscal year, June 2009, and is locked in at $2.09 per gallon for unleaded gasoline, $2.45 for heating oil and $1.65 for propane, Giroux said. The city also purchases diesel and kerosene.
The new solicitations will be for fuel in the 2010 fiscal year, from July 1, 2009, through June 30, 2010. “I could be wrong, but I don’t see oil getting much cheaper,” Giroux said Monday. “If there’s nowhere you can go but up, then you should buy.”
Giroux pointed out that Bath waited longer than many other municipalities to lock in for the rest of this fiscal year, holding out for the lowest prices.
“I got a little anxious about a month and a half ago, because the price per barrel had jumped a couple of times,”he said. “So we went ahead and locked in and felt like we were buying at a good price, and that the price met what we had budgeted, so we were going to be able to meet our budget.”
Giroux added that the prices have fallen to the extent that the 2010 fuel budget could be lower than this year’s. “So we could have a little bit of a savings in there and help us in some of the other areas that are going to be a problem next year,” he said.
Bath uses diesel fuel to run its public works fleet, while unleaded gas goes to police vehicles. Propane heats the train station and police station, Giroux said, while heating oil is burned at City Hall, the sewage treatment plant and the fire station.
The bidding process, which Giroux expects to occur in mid-January, takes just four hours. The city tends to go out to bid at 9 a.m., which prompts fuel companies to check what the price will be to buy the commodity that day, the city manager said. The companies will submit their bid by 11 a.m. and the city awards the bid at 1 p.m.
“There’s no risk for the fuel companies, because they have already checked the price,” Giroux said. “They know what they’re going to be able to buy the commodity for that day, so that when they submit their number to us they’re sure that they’re going to be able to sell it to us for that and make a slight profit. And we award it quickly so that they can then go buy the commodity.”
Giroux compared the wait to lock in to playing the stock market. “You’re taking an educated guess at what the commodity will be compared to what it is now,” he said. “… I’ve had pretty good luck the last five or six years doing this, but sometimes you can get burned. In the end, you’re doing your best to try to save taxpayer dollars.”
The City Council meeting will begin at City Hall at 6 p.m on Wednesday.

Alex Lear can be reached at 373-9060 ext. 113 or alear@theforecaster.net.
A Maine native and Colby College graduate, Alex has been covering coastal communities since 2001, and currently handles Bath, Topsham, Cumberland, and North Yarmouth. He and his wife, Lauren, live in the Portland area, and Alex recently released his third album of original music.