Starland County
Gravel Hauling Payments: Fuel Payment Sample
Following a meeting with Gravel Truckers in June of 2005, Council agreed to change the gravel hauling
contract to include not only a loading and hauling factor, but also a fuel factor. The following motion
was the one passed by Council after discussing this issue with the Gravel Truckers.
[C05-188] MOVED BY DEPUTY REEVE GRENVILLE
that effective July 1st, 2005, the present rates paid to the contract gravel truckers be amended;
that the base rates presently used be increased by 6.9%; that in addition to the increase in the
base rate, Starland County will monitor the fluctuating diesel fuel prices and increase or
decrease the hourly rate by 0.65% for every 3.0 ¢/l. that the fuel increases or decreases from the
base rate of 57.57 ¢/l. (taken from the Prairie Fuel Advisors Inc. fuel price listing for dyed diesel
fuel as of March 2005 and excluding all taxes), and compounded on a monthly basis; and that
the fuel prices will be determined by monitoring the fuel prices monthly (on the 1st day of each
month) for dyed diesel fuel as quoted by Prairie Fuel Advisors Inc. (Starland County’s Bulk Fuel
Contract Administrator). MOTION CARRIED.
This fuel rebate policy has been applied to all gravel payments since July 1st, 2005, and an
amended contract was completed in 2005 to make this addition.
Amended – May 27, 2008
Following a meeting with the Gravel Truckers on May 27th, 2008, the Council agreed to increase
the fuel factor, and increased the rate to 1.30% from 0.65% for every 3.0 ¢/l that fuel increases or
decreases from the base rate of 57.57 ¢/l. This change essentially doubled the fuel factor from
the previous year.
How are base rates calculated?
As noted, there are three components to a Gravel Truckers payment. For the purpose of illustrating
these components, we have attached our current Truck Haul Rate Summary sheets. These sheets
provide a rate per cubic yard that combines the mileage factor and loading factors.
As an example, we chose a truck with a 20 cubic yard capacity, and we will base these calculations on
a 20 mile haul. For this load the trucker would be paid as follows:
1.
Mileage factor: (Currently approved at 0.2270 times the mileage)
20 (for the 20 mile haul) X (times) 0.2270 (mileage factor approved by Council) = $4.54
[20 X 0.2270 = $4.54]
For the above example, the trucker would be paid a mileage factor of $4.54 X 20 yards or
$90.80 for this haul…plus;
2.
Loading factor: (Currently approved at 0.9207 / cubic yard)
For the above load, the trucker would be paid an additional 0.9207 / cubic yard for the 20 yard
load, so the additional loading factor would be calculated as:
[0.9207 X 20 = $18.41]
3.
Summary of Mileage and Loading Factor payments:
For this load as described, we would pay the trucker
Mileage Factor
Loading Factor
Total
$90.80
$18.41
$109.21
On our rate sheet, you will note we show $5.46 / cubic yard for a 20 mile haul for a body job or truck
other than a body job. This is a simple summary, as for the above example, you would just have to
multiply $5.46 X 20 yard = $109.20.
The Fuel Factor and how it works now (after May 27, 2008)
When the original fuel factor was calculated, it was designed to provide “extra” compensation for
fluctuating fuel. We wanted to ensure that we didn’t have to change the base rates (the mileage and
loading factors) every month.
At the time the base rate was calculated, the base price for Low Sulfur Diesel fuel for Starland County
was 57.57 ¢/l. Council has agreed that the bonus fuel payment will be paid every time the cost of fuel
is more than 3.0 ¢/l above this “original” base price. Every time the cost of fuel is 3.0 ¢/l more than this
base, the gravel trucker will be reimbursed for 0.65% of the total haul rate. This reimbursement rate
was increased to 1.30% effective May 27, 2008.
How it works in this example?
The first step we go through is to establish the price for the month.
The motion describes how this is done.
…determined by monitoring the fuel prices monthly (on the 1st day of each month) for dyed
diesel fuel as quoted by Prairie Fuel Advisors Inc. (Starland County’s Bulk Fuel Contract
Administrator).
Since we started to administer this program, we base the fuel factor payment on the first Price
Notification we get in a month from Prairie Fuel Advisors Inc. I have attached a copy of the current
months Price Notification so you can see where we get the number from.
For example, in the Month of June 2015 we would base the fuel adjustment on the average cost of
diesel at the shop. In June of 2015, the price we would base our calculation on is 0.8959 ¢/l.
We take the current price 0.8959 ¢/l, subtract the original base price of 0.5757 ¢/l to get the difference
or 0.3202
[0.8959 ¢/l – 0.5757 ¢/l = 0.3202 ¢/l]
Calculating the factor….
We then divide the difference or 0.3202 ¢/l by 3.0 ¢/l to get the multiplying factor for the percentages.
This calculation is as follows:
[0.3202 ¢/l / .0300 ¢/l = 10.673 times]
As the fuel adjustment comes into play as soon as there is a full 3 ¢/l increase, in the current example
there are 10 full increase increments. (the 10.673 would be rounded to 11).
In the month of June, 2015 the fuel factor would be adjusted by 11 times the set rate. As of May 27th,
Council increased this rate from 0.65% to 1.30% as an adjustment factor. This would now be
calculated as follows:
[11 X 1.30% = 14.30%]
The fuel bonus would be 14.30% above the regular rates. So for the example we started with, the
gravel trucker would be paid as follows:
$109.20 (as calculated for the 20 yard load travelling 20 miles) plus 14.30% of this total or an additional
$15.62 as the fuel allowance. The total for this trip would then be $124.82. This is done automatically
without having to renegotiate with Council each time there is a fuel price fluctuation.
The payment is calculated as:
[$109.20 + $15.62 = $124.82]
This is calculated for the full trucking payment, and paid each month.
separately on the payment statement for each gravel trucker.
The fuel factor is shown
Summary:
I hope the illustration and example attached will more clearly explain how the fuel factor and base
trucking rates are calculated. As indicated, I have attached the most current trucking rate sheets and
our most recent price notification to this summary and example. If you require any further information
or discussion on the fuel factor or rates, please feel free to contact me. (403) 772-3793 or by email to
[email protected]. You can also talk to our Public Works Supervisor, Al Pratt at (403) 3213285.
Ross D. Rawlusyk
Chief Administrative Officer