12/10/2007: "PW Requests Fuel Depots For Orcas/San Juan"

The County Council will be holding a second public hearing on the 2008 budget on Tuesday, and controversy has erupted over a claim by the Public Works Director Jon Shannon that at least a half million dollars will need to be borrowed to build county fuel depots in order to “save money.”

The Council was also “reminded” that another reason for the County getting into the fuel business was because during the storm of last November “the vendors (were) absolutely out of fuel, and it was touch-and-go if we would have enough fuel for the vehicles.”

Not so, say two vendors on San Juan Island. Both the PSJ (Petro San Juan) and IPS (Island Petroleum Services) owners on San Juan expressed, respectively, anger and disbelief over the claim. Both stated they did not run out of fuel, and that their generators kept their pumps running for both county equipment and the public throughout the storm.

Both were also at a loss to understand how investing in the construction of fuel depots could save money, since -as they pointed out- the County already takes the lowest bid to supply fuel; and Shannon noted the life span of the depots was estimated to be 20 years, at which time they would need to be replaced.

The issue came up for discussion when County Council Chair Bob Myhr noted that the staff report on the budget stated they needed to “understand the assumption of one million dollar borrowing” was “included in the budget, and be comfortable with this approach..” Myhr asked “What does that mean?”

Jon Shannon replied that near the end of 2008 they will “come to you with the opportunity to essentially borrow one million dollars, to do three things; one of which was to “Build out our fuel depot program, on Orcas and San Juan Island;” -the rest would be for a new radio system, and to purchase additional land for the shop on Lopez.

Bob Myhr asked “where do we get our fuel now?”. Shannon said they buy from private vendors. Last week a request for bids for 8,000 gallons regular, 10,000 diesel and/or biodiesel was sent out to wholesale suppliers to supply the fuel .

Shannon told the Council that there are “three big reasons fuel depots make sense” for the County. Shannon said “one, it saves money over time; two, getting to the fuel is a major problem -particularly on this (SJI) island- it is very costly the amount of time in takes to fuel the equipment; and three, the Council wants us to look at alternative fuel.” One of the bid requests sent out last week was for biodiesel

At one time Public Works had fuel depots on all three islands for their own use, and “sold” fuel to the other county departments. Newly elected Sheriff Bill Cumming soon realized that the Sheriff departments budget was taking a hit from the high cost of “buying” fuel from PW, and started buying fuel at a lower cost from the local gas stations. It was not long until other county departments noticed that Sheriff Bill was on to a good thing.

Not too long after that happened, Public Works removed all of the tanks due to liability concerns over the tanks leaking into the ground. Public Works now accepts the most competitive bid to purchase fuel at a set price, thus assuring the County gets the best price for fuel.

Shannon said “there is a great interest” from the Town of Friday Harbor, and others, in sharing a fuel depot, “not only because it saves them money” but again repeated, “San Juan ran out of fuel during that storm, and the only reason we had fuel on Orcas is that the vendor shut down the public, and held back a reserve for us.”

We asked Shannon what the total cost for the depots would be. He said he did not know; that the final actual costs would come after a complete study. As for how much fuel would they store, and how much to purchase the tanks, and as to where would they be located, Shannon also gave the same answer

The topic will be up for further discussion at the budget public hearing on Tuesday at 2:00 p.m. in the County Council hearing room. The adoption of the budget is scheduled to start at the close of the public hearing at 2:30 p.m.