Island towns save at VTA gas pumps

The VTA fuel depot passes on savings to town departments.
Photo by Ralph Stewart

The VTA fuel depot passes on savings to town departments.

In general, Island drivers find that the price for a gallon of gasoline does not vary widely from retailer to retailer on Martha’s Vineyard, where some of the highest prices in the nation are found. That is not the case for towns, public agencies, and nonprofit organizations that take advantage of the deeply discounted gasoline available at the Martha’s Vineyard Transit Authority (VTA) depot in the Airport Business Park.

The six Island towns spent an estimated total of $325,000 in the last fiscal year on fuel costs, according to a survey of town officials. Police department patrol vehicles account for most of the expense.

Town spending on fuel ranged from $15,000 in Aquinnah to more than $130,000 in Oak Bluffs in the last fiscal year. In 2011, Chilmark spent $20,000, West Tisbury $30,000, Edgartown $60,000, and Tisbury $79,000.

This week, the VTA discount program allowed participating organizations, including schools and Island housing agencies, to buy unleaded gas at a cost of $3.76 per gallon, well below the commercial pump price in the $4.60 range.

The VTA is able to offer deep discounts because it in turn buys gasoline through a 10-year-old state program called CommPass. The state’s Operational Services Division (OSD) administers CommPass as part of the state’s bulk purchasing program. In addition, as a regional transit authority, the VTA is not required to pay federal and state excise taxes, savings it passes along to the towns to the tune of approximately 42 cents.

VTA administrator Angela Grant said that VTA uses the state bid price as the basis for its on-Island bid process. R.M. Packer in Vineyard Haven is the current winning bidder. Ms. Grant said in a telephone interview last week that the VTA passes on the negotiated price for unleaded and diesel fuel to users and does not add other charges to the price per gallon.

“We’re just doing our job,” Ms. Grant said. “We are not competing with anyone. We don’t advertise. We just make the service available.”

VTA fuel prices are tied to market prices in Boston or Providence to which the Packer company is entitled by contract to add 28 cents per gallon for expenses, transportation, and profit. Assistant VTA administrator Lois Crane said on Tuesday that the Packer price at VTA pumps that day was $3.76 per gallon for unleaded gas and $3.94 per gallon for diesel fuel.

“We hope to get the same price or a little lower (as the state price) but it may be higher to cover the extra cost of transportation here,” Ms. Crane said. Bid contracts are for one year, with three renewal years. The Packer contract runs through April 31, 2012, and new bids were due at the VTA on April 4.

Unleaded fuel prices at the VTA pumps during the week beginning March 30 were $3.53 a gallon versus a $4.60 per gallon range at Island stations. VTA’s diesel fuel price on April 6 was $3.76 per gallon compared with a $4.60 range at Island station pumps this week. VTA maintains a 2,500-gallon tank for unleaded gas and an 8,000-gallon diesel tank at its Airport Business Park facility.

VTA users are issued an electronic device which is swiped at the pump to record the user, date, vehicle and the amount of fuel purchased. The VTA bills towns monthly for their use.

As more towns take advantage of the savings, VTA volume has increased. VTA pumped 40,000 gallons of unleaded gas in 2011, almost 150 percent of the total two years prior, and it pumped 183,000 gallons of diesel fuel in 2011, up nearly 19 percent from 2009.

“The VTA program has allowed me to keep my fuel budget level for the past three years,” Edgartown police Chief Tony Bettencourt said this week. “Their pumps are accessible nearly 24/7, and the process is fast. We aren’t waiting in line, and officers are back on the street in a minute.”

“I save 50 to 75 cents a gallon, depending on the price,” said Fred LaPiana, Tisbury department of public works director, about the town’s “piggy-backing” on the VTA pricing. Piggy-backing describes public agencies’ ability to access savings from a state-negotiated contract. Tisbury takes deliveries at its 1,000-gallon tank at the highway department yard.

Not all Island towns use the VTA pumps. Oak Bluffs negotiates to purchase fuel. Currently, it holds a contract with Packer Fuel, highway superintendent Richard Combra said. The town pays $3.59 for diesel and $3.41 a gallon for unleaded. Mr. Combra said the town saves about 50 cents on a gallon.

Although Island towns are not required to pay federal taxes, a savings passed along at Island pumps, the VTA savings have proved attractive.

West Tisbury recently began fueling at VTA pumps, after previously patronizing Up-Island Automotive, where the price did not include federal taxes. Walter (Pat) and Joan Jenkinson, who own the station that has been providing fuel to town vehicles for 42 years, criticized the switch.

In a Letter to the Editor of The Times, published April 5, the Jenkinsons questioned why the decision was made without a request for bids and questioned whether it was unfair competition. Ms. Jenkinson said the station provided the town with a very fair price and off-hours access.

Chilmark and Aquinnah take advantage of the VTA pumps when the opportunity presents itself, but they continue to buy gasoline from Menemsha Fuel.

“I probably use VTA the most because I live in Oak Bluffs and pass VTA, but it makes no sense to make a special trip down-Island,” Aquinnah police Chief Randhi Belain said.

Aquinnah town administrator Adam Wilson said Wednesday that town police and the harbormaster use a charge system at Menemsha Fuel that discounts the federal gas excise charges at the pump. “We don’t have a contract or any discount program in place there,” Mr. Wilson said.

The Chilmark police and fire departments use a credit card to purchase fuel at the Menemsha station. Town accountant Emily Day said last week that the average price per gallon purchased was $4.20 in fiscal 2011.

Chilmark police Chief Brian Cioffi said his department has relied on Menemsha Fuel, but that there will be a change in the new fiscal year, arising from the recent round of town budget discussions. Chief Cioffi said the discussion included the need to balance any savings against travel time, patrol responsibilities, and support for local businesses. As a result, police vehicles will fuel up at the VTA pumps when they are down-Island, he said.

Menemsha Fuel Service owner Marshall Carroll could not be reached for comment.

Annual state contracts for bulk buying discounts are awarded to vendors for a variety of products and services, including the purchase of fuel, tires, and automobiles. According to the OSD, the programs may be used by all state agencies, including constitutional offices, the legislature, judiciary, elected offices, educational institutions, the military, independent public authorities, cities, towns, municipalities, county governments, school districts and other service districts and quasi-public agencies.

Nonprofits that currently provide human and social services to the state under contract, and which meet the program criteria, also qualify. More information can be found on the Purchased Service home page at state.ma.us/osd/pos/dps.htm.