City mulls buying gas on contract

With fuel prices dropping to levels not seen in a number of years, this might be a good time for the city of Vandalia to lock in their costs for up to a year.
Barry Jahraus of South Central FS made that offer at Monday’s city council meeting, saying that by locking in gas and diesel prices, the city’s cost would be about $1 less per gallon over its cost for the "past four or five years."
The city has never purchased gas and diesel under contract, but Jahraus said, “Now might be a good time to lock in prices for your budget.”
The city has been buying fuel from South Central FS, he noted, and the only thing that would change with a contract is “you will have predetermined prices.”
Jahraus said that the city would have to agree to buy a certain number of gallons, and that it can buy the fuel under contract by the quarter or a full year.
He also said that the city could agree to buy only a percentage of their fuel under contract as it tests this method of buying fuel. “Maybe half of your gallons,” Jahraus said.
Through Dec. 18, the city has purchased 27,000 gallons of gas and 7,100 gallons of diesel fuel from South Central FS.
Jahraus suggested that the aldermen think about the offer.
“I just don’t want to see you jump in and get burned, but I don’t see how you can,” he said. “It’s kind of a win-win situation.”
Based on Monday’s futures, the cost per gallon for the coming year would be:
• First quarter – gas, $1.998; and diesel, $2.41.
• Second quarter – gas, $2.18; and diesel, $2.487.
• Third quarter – gas, $2.16; and diesel, $2.54.
• Fourth quarter – gas, $2.07; and diesel, $2.55.
Aldermen discussed, and ultimately decided, to think about the offer and revisit the issue at their Jan. 19 meeting.
One aldermen, however, was ready to vote on Monday night.
Mike Hobler said, “It’s not going to get much cheaper. I think we ought to lock it in now.”
The Vandalia School District has been buying fuel through an annual contract for decades. At their Dec. 16 meeting, the school board OK’d a contract calling for the district to receive gas for $2.198 per gallon and diesel for $2.169 per gallon in the coming year.
Also at Monday’s meeting:
• The council approved an ordinance governing traffic in a downtown alley, but tabled action on an ordinance restricting traffic in one block.
Aldermen OK’d a law change that will allow only southbound traffic in the alley between Sixth and Seventh streets.
Mayor Rick Gottman said that one reason for the restriction is that a restaurant is going into the former Eakin Hotel and Baptist Apartments building, and that the owner of that business plans to have a drive-up window.
The council agreed to table an ordinance change that would prohibit parking on the east side of Second Street between Johnson and Edwards street.
Some residents of that block requested the change at a December council meeting, saying that they can’t back out of their drives when cars are parked on the east side, adding that residents on the east side of the street have space for parking behind their homes.
At the start of Monday’s meeting, Gregg Hubler said that with the restriction, those currently parking on the east side would begin parking on the west side, leaving few spaces for other vehicles.
“Nobody is going to be able to have anybody over (to visit),” Hubler said, expressing the belief that residents on the east side of the street will take up four of six available parking spaces.
Because of that, he said, visitors to residents of that block would probably have to park a distance away.
Alderman B. John Clark said that the proposed ordinance change seems to be the only answer to an existing problem.
“It was about the only thing we could do,” Clark said, explaining that the street is so narrow that parking on both sides creates a problem for emergency vehicles and other large vehicles.
“There’s no easy solution,” Clark said.
Hobler agreed, saying, “I don’t know the solution.”
• Gottman announced that two long-time employees at the city’s water plant will be retiring, and that he wants to move quickly on finding replacements.
He said that Randy Bone, who has worked at the plant for 35 years, will retire on May 12, and Dave Goodin, a 33-year employee, will retire on June 14.
Employees at the water plant have to be licensed, so Gottman said he wants to fill the positions quickly in order to have the new employees certified by the time Bone and Goodin retire.
• The council approved an estimate from Smith Backhoe Service of Herrick for sewer line improvements on Elm Street just south of St. Louis Avenue.
Director of Public Works Marlin Filer said the sewer line is probably at least 50 years old, and that the work will help prevent houses in the block from flooding, due to water running down the hill from Simma Park.
Smith’s estimate, which included hourly charges for a track hoe and leveling laser, was one of two received by the city, the other coming from Bruce Concrete Construction Inc. of Granite City.
• Gottman reported that the annual restricted funds checks from the Hazel Simma Kelly trust for the Vandalia Volunteer Fire Department and South Hill Cemetery have been distributed.
The fire department is receiving $32,815.83, as is the city for the operations of South Hill Cemetery.
 

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