It’s gratifying to know how hard City of Colorado Springs departments have worked to save money. For about six years in a row, the folks at Fleet Management have planned ahead and locked in fuel prices under contract.
In 2012, Fleet locked in unleaded at $2.83/gal. and diesel at $3.16/gal. As most consumers know, unleaded is close to $4.00/gal. right now as we enter the summer driving season.
Tom explained, “Once we sign the contract we have to take the fuel in monthly increments. If we don’t use it we work with Colorado Springs Utilities to store the diesel fuel. We’ve used less diesel fuel this year because it was such a mild winter. We buy about 2.3 or 2.4 million gallons a year for city vehicles, police, fire, utilities and transit too.”
There are three benefits to lock in fuel costs under contract:
The first is most obvious – fuel cost savings.
The second is the leverage we receive from having a contract in place; it puts the City higher on the list of those who get fuel when quantities are limited.
The biggest benefit is knowing how much the City will spend on fuel for the year. The budget office likes this because they can make allowances for it and there are no surprises mid-way through the year.
Occasionally, even the best laid plans can backfire. One year the City of Colorado Springs lost money because fuel prices dropped. But even then, the budget office still knew how much they’d spend on fuel.
Experience makes a great teacher. Once you sign the contract, you’ll get that amount of fuel whether you use it or not. There is an approved bidding process through the Procurement Office, but vendors also have their protocols.
Tom said, “We went through four different vendors for 2012 planning. They only give us about 15 minutes to make a decision. When we call to ask for prices at 11 a.m., you can choose to pull the trigger right then or wait until the next day. We have to have everything approved and be ready to make the decision. Then we’re locked in!”
When it comes to saving money, Fleet Management has learned from the Boy Scouts motto – it’s best to be prepared!