Village authorizes forward fuel purchases to manage price risk, targets up to 84,000 gallons gas and 42,000 diesel

The Infrastructure & Environment Committee recommended authorizing the village manager to execute forward fuel purchase contracts for 2016 to manage price risk and better match tanker loads. Staff said prior use of forward contracts in 2015 brought prices approximately $100,000 under budget and noted the practice limits risk exposure compared with spot purchases.

In committee, staff sought authorization for up to 84,000 gallons of gasoline and up to 42,000 gallons of diesel to cover roughly 75% of projected needs and align with full tanker loads. "We're looking to have that authorization of us with the manager so that... we're seeking authorization for up to 84,000 gallons of gasoline and up to 42,000 gallons of diesel fuel," staff said. Committee members asked about mileage improvements and partner reimbursements; staff noted that the village purchases fuel for several partners and receives reimbursements and surcharges.

The committee voted to forward the authorization to the consent agenda; staff will execute contracts during the months when contract fuel is available and will report back to council as necessary.