Friday, December 5, 2008
Money to burn! Pre-buying of town heating oil!
It will cost us all more tax dollars to keep our town employees and the school warm this winter because of a poor judgment call by our selectmen. On Sept. 3rd when the town selectmen chose to except a bid from Barrows Coal Co. of Brattleboro, Vt for 50,000 gals of #2 fuel oil @ $3.919/gal at a cost of $197,125.70 and 1,000 gals of kerosene @ $4.449/gal at a cost of $4449.00, leading economist were predicting a fall in oil prices due to instability of the market and the increasing bad economy. Even if the selectmen missed these reports, it had been brought to their attention and our selectmen refused the advise of our town adviser, John Gomarlo. John warned the selectmen to hold off on pre-pay decision for another few weeks to see how much more the price would drop; but the selectmen refused to listen to him. Their hasty action has cost us tax payers, $70,759.70 at today's spot market prices of $2.55. Not a very wise decision to say the least.
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19 comments:
I suppose a case could be made that they thought they were doing the right thing; but not listening to others shows they don't really care enough, after all it's not their money now is it?
We pre paid around the same time and around the same price . At the time hurricanes were coming and it sounded like the thing to do. the real sad part is this was the very first year we ever pre paid.
I know that most of the oil companies don't use your prepay money if you ask them not to. Then just pay the now lower price as they bring it. At the end of the year you can get reimbursed for what you didn't use. Sounds logical if maybe the town would look into some kind of deal like this. Myself, I almost prepaid but decided not to at the last minute.
Pre-Buy good or bad no idea yet. Oil droped, but if things flair up in Middle East as the news is talking about it could change in a hurry. We have a local oil co, that pays big taxes and we go out of town? Its hard to believe that they can't compete in there home town. Maybe they are sick of dealing with these people just like the rest of us.
winchesterinformer's point is the selectmen made a gamble with our money as it looks like now and lost. Yes, we are uncertain about what will to happen with the spot market but $70,759.70 gives the town a lot of room to wiggle. Yes, I talked to one of Bob's Fuel employees and they are tired of dealing with the Town of Winchester. Bob's have 50,000 gals under the pre-paid to sell. Just the amount Winchester needs.
Isn't a certain member of the Planning Board an employee of Bob's Fuel? Why didn't they use him as a go-between and see if they could have gotten a better deal or just purchased a few hundred gallons and kept a close eye on the market for a few weeks longer to see which direction it was going to take. I'm wondering if there was another reason for pre-paying with this company that hasn't come to light.
Bobs pre pay was 9 or 10 cents more a gallon than barrows, its that simple
So you're saying, that committing to pre paying for oil at that time, instead of heeding the advice of a long time town employee, someone familiar with these matters and someone entrusted by the selectmen on other serious matters, was a prudent decision? Why not wait a couple of weeks longer, why the big hurry? And nothing is ever that simple except in the minds of those who spend other people's money.
Paul; It wasn't a very prudent decision at all on the town's part. It was a decision somewhere between not very wise and dump. If it was up to me I would have locked into 25,000 gallons and waited to see what the spot market would bring for the other 25,000 gallons. This could have saved us thousands. It would be interesting how the selectmen buy fuel for their own homes. I would bet none of the selectmen pre-buy.uppep
It doesn't matter how they came to this decision or why. The only thing that matters is that it shows that once again, money has been wasted. Was it a hasty decision or just bad judgement on the part of our elected officials; we'll never know and they'll never fully explain. What's done is done. Unless they can renogotiate with this Barrows Oil Co. and recover some of the unspent funds; but don't count on it. Just remember this come election day, do we want to continue wasting our tax dollars?
No one could have predicted the fuel prices! The BOS were so torn over when to prepurchase, because the prices were so high. No one could predict if the prices were going to come down or not. It was a gamble for everyone! It took them two months of waiting to see what the economy was going to do, before they actually caved in and prepurchased at the lowest rate they had been quoted.
My question is ; Did the selectmen pre-buy fuel for their homes? It would be interesting to see how frugal they are with their own money!
Everyone who lives in New England and depends on oil for heat knows that the best time to buy fuel oil is in the summer time when prices are low. Seeing as how our town budgets run from June to June, would it not make more sense to purchase the town's oil then, when prices are low, then to wait until they go up? Whether they were torn up, as you say, over making this decision; perhaps they should have locked into a contract last year and then the tanks would have all been filled when the price was lower. I bring this up because this is how I run my business and as I'm the one that pays the frieght!
It's amazing how just a little bit of common sense works. Something that our BOS decides not to use much of.
As a homeowner, I prebuy my oil every year. I have done this for over 10 years. Over a 10 year average, I have saved, and I will continue to prebuy.
Although I do agree the Town does waste money on other issues - I do feel pre-buying is saving in the long run.
There was no crystal ball to tell us oil or gas would go crashing down. Just like we had no way of knowning the stockmarket, mortgage companies, or car makers would be is so much trouble as they are today.
I say we don't beat them up over this one.
That is a very good point you made Fedup2, we are happy it worked out for your family. I also pre-buy but not every year, I watch the market. Our point is, say your neighbors and your family formed a co-op and you where put in charge of buying the fuel for the whole co-op for about 200 homes. In the co-op homes are unemployed, retired, elderly, disabled, people on a fixed income just scraping buy. Any increase could be disastrous for the families in the co-op. Many economist predicted in July oil prices were going to fall, like when President Bush lifting the band on off shore oil drilling July 14, 2008. (cut and paste this web address ) http://www.msnbc.msn.com/id/21134540/vp/25677192#25677192
If not for the fact John Gomarlo advised the selectmen before they contracted $201,574.00 of someone else's money and in doing so would effect the lives of so many, then there would be no discussion. Thank you for your point of view.
Fedup2 and Ashuelot family are correct.
I was hearing the prices were going to be 5-7 dollars this winter
What's done is done and there's no going back, which probably wouldn't matter if they could. As others have stated, it could have been handled in a different way. To make decisions based on the speculation of others and not precise facts comes back to bite you every time. The fact that the news media and wall street speculators bet on prices climbing through the roof to further their agendas didn't help make matters easier either. However, there were many economists predicting a large drop in the price of a barrel of oil and many waited to see how it all played out. In this case we all lost out.
Nobody is wrong on this issue. winchesterinformer is trying hard not to be on one sided of an issue. People should always do what is best for their themselves and their families. We appreciate everyone's opinion. What "our town" web site hopes to accomplish is bring issues forward for discussions that have a real impact on our town's life style, taxes and quality of life. Dialog and educating people on issues about the judgment or lack of... by the people who were elected and sworn to protect town's people best interest. Whether it be selectmen, budget committee members, zoning board, planning board or town employees.
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