The Finance and Purchasing Committee gave its blessing to a proposal by the mayor's office to move to a fleet fuel card system.
The next step is winning City Council approval.
During Monday night's nearly two-hour Finance and Purchasing Committee meeting, Mayor James Sanders' assistant, J.T. Harris, gave a detailed presentation on the proposed fuel program, which he contends would save the city a conservative estimate of $54,312 per year.
Harris said the city spends about $26,500 per month for fuel, with Wastewater and Waterworks independent in regard to billing and invoicing.
Currently, the city has unleaded and diesel fuels delivered to Public Works as needed with all departments but Wastewater and Waterworks filling up there.
City leaders have said the distributor has struggled at times to supply fuel, so the mayor's office began considering different companies who offer the fleet card system. As it turns out, the move could not only ensure an adequate supply of fuel, but could end up being a significant cost-saver.
The mayor's office has suggested using WEX Arkansas -- the fleet card company that the state of Arkansas uses.
Under the plan, city departments will be issued the fleet cards to use at local gas stations. The card shaves 18.3 cents per gallon off the pump price for unleaded and 24.3 cents per gallon for diesel because the city is exempt from the federal fuel tax, Harris said.
On top of that savings, the fleet program offers a 1 percent rebate on fuel after taxes, according to Harris.
"In August of 2013, using this new program would have saved approximately $5,174 in fuel costs," Harris said.
According to Harris, the city has been paying an average of $3.55 per gallon for bulk unleaded and $3.87 a gallon for bulk diesel through its supplier, while the average pump price at local stations, with the federal taxes, has been $3.15 for unleaded and $3.49 for diesel.
He said there are no monthly fees, no interest charges, no transaction fees and the fleet fuel card program offers "exceptional tracking and detailed billing."
Each employee would have a unique PIN number, which allows officials to keep track of individual usage even when multiple employees use the same card.
The company would bill the city monthly and wouldn't charge late fees, Harris said.
According to Harris, the Police Department is requesting 46 cards (one per vehicle); the Fire Department, nine cards; Public Works, five cards (supervisors will be with the employees when they gas up); Parks and Recreation, two cards (one for the director and the other for the mowing crew); Wastewater, four cards; and Administration, two cards (one for the mayor and the other for emergencies and incidentals).
Councilman R.L. Jones said Waterworks should be on the system as well, and Mayor James Sanders indicated that the Water Department would indeed move away from its current card system to WEX Arkansas if approved.
Meanwhile, Councilman Tommy Abbott, chairman of the Finance Committee, updated board members on the IRS sales tax.
According to Abbott's figures, the projected "payover" for the 1-cent IRS tax that ended on Oct. 1 is $596,602.90.
He noted the projected payover less payments from the General Fund prior to the tax ($290,664.80) would be $305,938.10 if the October and November turnback funds meet the tax's monthly average of $234,935.75. Abbott emphasized the figures are projections.
Abbott proposed reimbursing the General Fund the $290,664.80.
"The bottom line to this whole thing is, it's all going to the General Fund, eventually, anyway," Abbott said.
Parks noted the tax money can only be used for payroll taxes, but Abbott said it relieves the General Fund either way.
Mayor James Sanders said he will check with the tax attorney to see exactly how the surplus funds can be used. He said he wants a legal opinion before using the money.
"We wouldn't have had this if we hadn't gotten the $700,000 (abatement of penalties by the IRS)," Councilman Kevin Snow said. "That's lost in translation. We got the abatement of $700,000 that they were able to give. If we hadn't had that, we would've come up short on this."
"To the mayor's credit," Abbott interjected of getting the abatement of penalties.
In total, the city paid the IRS $3,238,517.85. With the October and November turnback funds remaining, the city has collected $3,054,264.89 from the tax to date, according to Abbott.
mbrasfield@blythevillecourier.com