Wake pointing to savings from "timely" fuel purchase

Is it a coincidence that right as Wake County Superintendent Tony Tata is about to present the new student assignment plan his staff is touting fuel savings?

In a school system press release this morning, staff is saying that taxpayers could save almost $600,000 this year because of a "timely" bulk fuel purchase by the Transportation Department.

Here's the press release:

WCPSS to Save Thousands of Dollars at the Bus Fuel Pump -- Again

Wake County taxpayers could save almost $600,000 this year thanks to a timely bulk fuel purchase by the Wake County Public School System's Transportation Department. It's the second fiscal year in a row WCPSS purchasers have been able to lock in favorable prices well below budget.

"Since July, our team has been monitoring fuel prices closely looking for an opportunity to create significant savings," said Bob Snidemiller, senior director of transportation. "We were concerned coming into the year because prices were hitting close to our budget price per gallon. So we're thrilled to be able to create these savings instead."

WCPSS is projected to use 2.7 million gallons of fuel in 2011-12, and budgeted $3.30 per gallon. The state contract price, which varies and is used by most districts to purchase their fuel, was $3.20 as of Sept. 1.

Transportation staff anticipated that gas prices would rise around Labor Day and then briefly drop before rising again.

With 2.3 million gallons left to purchase for the year, the Transportation Department pounced on Sept. 13. They locked in 1.8 million gallons at $2.97 per gallon, saving 33 cents on the budgeted price, or $594,000 on the total budgeted amount.

This leaves 500,000 gallons needed for the remainder of the fiscal year. If prices continue to drop, the transportation department will buy from the market and keep the bulk fuel stored. If prices climb, the department will likely put the remainder of fuel needed out to bid and lock in under the budgeted rate.

"Whenever we go to the market, director of fleet maintenance Jeff Moore bids every fuel load purchased to get the best price that day," said Snidemiller. "If the bid is more than the state contract price, we buy from state contract, but this rarely happens. Jeff is almost always able to get the fuel a few cents less than state contract price every time he orders."

WCPSS made a similar purchase in March, locking in a $2.85 per gallon price that netted a savings of approximately $376,000 for the 2010-11 fiscal year.

WCPSS operates 933 buses, and typically uses more than 60,000 gallons of diesel fuel per week. Each day, more than 73,000 students in Wake County are transported on WCPSS buses, covering more than 17 million miles a year.

"Safety is our number one priority, but close behind that is efficient use of our transportation resources," said Superintendent Tony Tata. "I applaud Bob, Jeff, and our transportation and purchasing staff for being proactive in making taxpayer resources go farther."