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Oak Park wants fixed-price fuel contracts
Public Works Senior Mechanic Ken Crowley fills village vehicles with fuel from pumps at the Public Works Center. | Jon Langham~for Sun-Times Media
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Updated: February 4, 2013 6:06AM
OAK PARK — The Village of Oak Park is investigating the possibility of locking in motor fuel prices starting in 2013 for a year at a time for its fleet of 300 vehicles in an effort to stay ahead of market volatility.
Public Works Director John Wielebnicki said he expects to add to the contract an option for additional years if the plan proves beneficial to the village.
“We weren’t really sure how to do it, but we want to get into the network to see how to do it,” he said.
The decision to investigate locking in the prices was made on the advice of consultant Nels Olson of Olson Fleet Services, who declined to comment on his recommendation.
Wielebnicki said he typically calls around to three or four vendors and asks for the best price of the day before placing an order to fill the two 8,000-gallon unleaded gas tanks and the one 6,000 gallon diesel tank.
“We’re fueling up once or twice a month,” he said. “Being that fuel prices fluctuate a lot, we have to try and lock down the best pricing that day.”
Under the new system, Wielebnicki won’t have to worry about rushing to fill the village tanks before the next price spike. However, he said he will wait to get what he hopes is the lowest price he can get -- as reported by the Oil Price Information Service -- before signing a contract.
Wielebnicki said he believes most communities in the Chicagoland area order fuel on an as-needed basis, as Oak Park currently does. For instance, Arlington Heights, Naperville and the Village of Franklin Park each report they buy motor fuel on an as-needed basis.
Joe Lauro, public works director for the Village of Franklin Park, said he has a contract with Mohr Oil to deliver fuel for the fleet of 103 cars and to operate about 40 other pieces of equipment, such as pumps. He orders about 7,000 gallons every two to three months so he doesn’t have to pay delivery charges.
“It helps having a fueling station so we can plan to order before the prices do go up,” he said.
Lauro said he’s found that using a “dollar cost averaging” method of fuel procurement saves him about 62 cents on the gallon as compared to the fixed-cost method Oak Park is exploring. In addition, the village gets back a percentage of the sales tax.
Like many communities, Lauro said, Franklin Park also is considering ways to move away from reliance on fossil fuels both to save money and to become more eco-friendly. The village has considered a combination of strategies, including the purchase of electric vehicles and conversion of existing vehicles to running on natural gas.
“There’s kits where we can convert most of our large pickup trucks,” Lauro said.
