Despite never using its gasoline-price insurance policy last year, Fort Wayne will pay to be part of the program again.
The Board of Public Works on Wednesday approved a resolution for the city to participate in the Indiana Bond Bank’s motor fuel hedge program this year.
Beginning in July 2009, Fort Wayne and five other cities started a program to ensure fuel prices remain within budget. The cities paid a service charge of 7 cents a gallon to keep their fuel prices between $1.70 and $2.05. The city also pays about 21 cents additional per gallon for taxes and other charges.
Had the monthly average for fuel peaked above $2.05, the city would have been reimbursed for those additional costs. But Jim Howard, city purchasing director, said that cap was never broken in 2009 because the sluggish economy depressed fuel costs. He said the city paid about $15,000 in fees for the fuel insurance for the last six months of 2009.
More interest in the program this year – 13 governments are participating – has reduced administrative costs, he said, as the city will now pay a 4 cent-a-gallon fee. Howard expected the city to spend about $15,000 for a full year in 2010, a good investment because fuel prices are expected to rise this summer. Some forecasts have them going well over $3 a gallon at the pump.
“We view it as an insurance policy,” Howard said.
The city has yet to negotiate its peak fuel price for this year.
In other business, the board approved more than $500,000 in additional engineering fees for two projects to improve the city’s sewer plant. The first project involves improving the plant’s aeration system, which is necessary to provide oxygen to the organisms that break down the waste in the sewer. The city increased its contract with URS Corp. by $292,100 – to a total of $380,807 – to perform the engineering work. The project is expected to cost $2.5 million.
The second project will improve the plant’s pumping system to allow it to treat up to 70 million gallons a day, a 10 million gallon increase. The $2.5 million construction project will install two pumps and monitoring devices to the plant.
The city added $231,642 to its contract with Donahue & Associates – total contract of $328,672 – to perform the engineering work.
Both firms did the preliminary engineering for the projects, allowing the city to choose options for the work, and were then chosen to provide full engineering services for the final projects. Both are expected to begin construction next year and are part of the city’s plan to reduce the amount of sewage that flows into area rivers during heavy rains.
