Here's a headline you probably never thought you'd see this week:
Macon city government makes clever deal; saves $250,000.
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
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.