County to settle fuel flap

Agreement went out to bid again after protest

COEUR d'ALENE — In what could be the beginning of the end of a four-month controversy, Kootenai County commissioners today will open bids from vendors for the county's fuel agreement.

The bids will be opened during the business meeting at 2 p.m.

However, Commissioner Dan Green said the bids are expected to be forwarded to the county's legal staff to be reviewed to ensure they meet the bid parameters and to make a recommendation before the board decides on awarding the agreement to a vendor.

An agreement was signed in December with Coleman Oil, the county's previous vendor. But that agreement was recently rescinded following protests from Kerr Oil and its attorney, John Magnuson.

"Kerr raised some concerns about the agreement with Coleman, and Coleman was very accommodating about ending the contract we signed in December," Green said. "I believed the contract with Coleman was

sufficient, but Kerr raised a pricing issue concern."

In a letter to the commissioners, Magnuson pointed out a lack of clarity regarding the pricing called for in the bid specification.

"The bottom line is that Coleman and Kerr both submitted bids compliant with the bid specifications and Kerr's bid was the lowest," Magnuson wrote.

The agreement will give the county a discounted fuel price over regular pump prices because it is a large-volume purchaser of fuel.

The county used 218,000 gallons through Coleman fuel stations last year. Delivered fuel to the Solid Waste Department was an additional 102,000 gallons, so a total of 320,000 gallons of fuel was used. The amount includes all grades of fuel.

The largest fuel user at the county is the sheriff's office.

If the county enters into a supply agreement with any vendor, it should guarantee a discounted rate to taxpayers, Commissioner David Stewart said. Recent agreements have not come with such a guarantee, he said.

"We want oil companies to make a profit — they have to," Stewart said. "But I found an agreement with Shell Oil in the 1940s based on the advertised retail price of the day minus so many cents per gallon. That's the way it should be written. That would be easy to track and audit."

Stewart said he believes the county — outside any agreement — should also have the ability to call any and all fuel distributors in the region when bulk fuel is needed so it can shop around for the best price at the time.