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Hernando Today

LETTERS TO THE EDITOR

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The Tampa Tribune

Published: December 13, 2008

What A Deal

In a recent article regarding an annual Hernando County gas purchase contract that took effect on Nov. 24, a newly elected county official, John Druzbick, the county purchasing director, James Gantt, and a county commissioner, Dave Russell, all trumpeted as success locking in one year pricing of $1.80 (gas), and $2.00 (diesel) a gallon pricing for 1 million plus gallons of fuel, as a win for Hernando county taxpayers.

May I suggest the real winner in this deal is the J. H. Williams Oil Co. of Tampa, the supplier who thanks to the naivete, and lack of creativity on the part of those responsible for negotiating this purchase, locked in a $600,000 to $700,000 gross profit for themselves.

The lack of creative contractual language has resulted in a win for someone other than those responsible for paying the bill, the Hernando county taxpayers. With futures contracts trading between sixty and 90 cents less than the agreed upon purchase price per gallon, Williams used forward contracting to lock in pricing for a one year period, guaranteeing a gross profit of the difference between the locked in pricing and the price guaranteed by the Hernando County taxpayer for this contract. John Druzbick said, "any time you can buy in quantity and lock in a price like that, it's going to save you some money."

Mr. Druzbick, locking in a three-quarter-million dollar annual gross profit for the supplier, at the expense of Hernando County taxpayers, is a total waste of a 1-million gallon fuel purchase as a negotiating tool.

As of this writing, those same Hernando County taxpayers who have been put on the hook for more than 500,000 gallons of gas at $1.80 per gallon, can fill their 20 gallon gas tanks for as little as $1.59 a gallon, without any negotiating. Some deal, huh?
Midwestern farmers have been using forward contracting to minimize volatile pricing exposure, and maximize profits for their operations for years.

Isn't it time for those responsible for Hernando County fuel purchases to use the same financial tools, to the benefit of Hernando county taxpayers? Or at the very least, write a creative contract resulting in a win/win for all by soliciting a partnership deal good for all participants?

For example, a percent revenue share of a reasonable amount over a base locked in profit for the supplier. This would cap maximum exposure for Hernando county taxpayers, while simultaneously introducing a revenue partnership opportunity for the taxpayer.

Based on this contract, I'm confident the J. H. Williams Oil Co. is eagerly anticipating doing another "deal" with our ill-educated, and creatively challenged Hernando county negotiators. It's time for a county, and/or regional energy czar. who not only knows the energy market, but understand's how to implement the management tools that will save us from "deals" like this in the future.

Jim Gries

Weeki Wachee

Bush Not Solely To Blame

I have to thank the Hernando Today for printing Ms. Earl's columns every week, for it shows just how crazy those on the left truly are even after they won the presidential election.

Ms. Earl's obvious psychological hatred for President Bush is one that has been brewing since the 2000 election. She keeps making these rather fascinating allegations that he has violated the Constitution ad nauseum starting with the war in Iraq. She blames him single-handedly for our involvement in the war in Iraq, never mentioning that it was Congress who gave him the authority to go to war with Iraq.

The Democrats had the votes not to give him the authorization, but only five of their members voted against it.

As for Bush violating the Constitution and being impeached, presidents like Jackson, Lincoln, Wilson and FDR have done far worst then Bush has ever done.

Look, I am not defending President Bush. I thought the whole war against Iraq was not thought out properly. I was against his take on illegal immigrations and the whole thing with the bail-outs. But it was not just he alone that caused these problems we now face. It was also fault of Congress and the Senators and not just the Republicans. but the Democrats as well.

Unfortunately for Ms. Earl, she refuses to see the truth and I am afraid we will be subjected to her rantings for weeks to come.

Peter Stathis

Spring Hill

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