City saves money in fuel deal

Here's a headline you probably never thought you'd see this week:

Macon city government makes clever deal; saves $250,000.

It's true.

The city purchases about 1.5 million gallons of fuel each year for some 1,400 pieces of equipment and vehicles, as well as for other purposes, said Tim Stewart, the city's director of vehicle maintenance. While most Middle Georgians are paying more for their gasoline - a whopping $2 per gallon in some cases - the city of Macon is poised to save hundreds of thousands of dollars this year.

Macon Mayor Jack Ellis told City Council members this week that the move has saved about $250,000. The announcement comes in a month during which the council was given a bruising audit of the city's finances and as the mayor presented a budget laced with cutbacks.

Last summer, Stewart signed a contract with PS Energy Group of Atlanta to lock in fuel prices for the city at about $1 a gallon - 98 cents for diesel, $1.04 for gas.

The city gets a break on fuel taxes, as do other governments. For example, the city of Milledgeville most recently paid $1.51 per gallon, said its finance director, Julia Luke. Dublin City Manager George Roussel said that city is currently paying about $1.62 per gallon. Bibb County has been charged $1.52, according to a recent invoice.

If not for the fixed rate, Macon would be paying about $1.52, Stewart said.

Stewart said private companies have taken advantage of these contracts, but that "this is kind of unheard of in local government."

PS Energy is not the only provider of fixed pricing for fuel, said Terese Belongia, the company's fuel management project director. But Belongia said Macon is the only government in the country that is taking advantage of such a contract offered by PS Energy, one of the largest fuel management companies.

Belongia said the idea is not for clients to be speculative with gas prices, but to have a tool for staying on budget in an area of market volatility. Last July, she and Stewart worked out a per-gallon price based on Macon's budget and past purchases, Belongia said.

The contract likely will be renegotiated by September.

But with prices now soaring at the pump, Stewart's deal not only kept him on budget, but has produced savings of at least $200,000, Stewart said. The $250,000 estimate also includes what the city's clients have saved in the deal.

Macon operates three filling stations. In addition to servicing city and Macon Transit Authority vehicles, Macon sells fuel to the Macon Water Authority, The Medical Center of Central Georgia, the Older Americans Council and the U.S. Marshals Service, Stewart said.

The city covers its operational costs on those sales but does not make a profit, Stewart said. He said the city can sell propane and natural gas to private individuals who operate alternative fuel vehicles, and currently has one such customer.