Town council approves purchase of 5,000 gallons of avgas after faster-than-expected sales

The Stevensville Town Council voted during its Aug. 7 special meeting to proceed with a 5,000-gallon purchase of aviation gasoline (avgas) for the Stevensville Airport after staff reported faster-than-expected sales from a previous purchase.

Brian, who the council called to present the item, said the town purchased 4,000 gallons of avgas in May and began selling from that tank on July 1. Through the Tuesday before the meeting, he said, the airport had sold 3,217 gallons. He asked the council to approve a 5,000-gallon “split load” (5,000 gallons to Stevensville; the other 5,000 gallons of the 10,000-gallon tanker go to another airport to lower trucking costs). He said the price as of the previous evening was $4.51 per gallon and estimated the purchase would cost in the neighborhood of $22,005.50, acknowledging the price fluctuates daily.

Brian said the fuel operation was nearly breaking even: the initial 4,000-gallon purchase and sales to date produced roughly a $300 surplus. He said the town leases the current tank and that the lease arrangement means the town does not expect large profit margins while leasing.

Council members asked about insurance coverage. Brian said the branded Phillips 66 arrangement requires the town to maintain a $1,000,000 liability policy; he said the fuel supplier (Phillips 66 and City Services, as named in the discussion) insures the fuel itself provided the town performs and documents quality-control checks. The council discussed the limits of that million-dollar policy; one council member said a million dollars “is basically nothing in today's market, especially in an airport.” Brian explained that claims related to contaminated fuel or a product-caused crash would be handled through the supplier’s coverage provided the town followed quality-control procedures, and that an individual’s aircraft insurance would respond to accidents that occur while a person is fueling.

Council members also asked about taxes and fees. Brian broke down the excise and other fees included in the fuel purchase price, saying the supplier collects and remits federal excise (19.3¢ per gallon), a federal LUST fee, federal oil-spill and Superfund fees, a Montana avgas excise of 5¢ per gallon, and a Montana UST fee of about 0.75¢ per gallon when the town purchases fuel from City Services.

The council moved and seconded the item to permit discussion. The roll call recorded in the transcript during the subsequent vote shows Councilor Barker voted “Aye,” Councilor Brown voted “Aye,” and Councilor Greg voted “Aye.” The transcript contains a separate statement that the motion passed during the meeting; no further vote tally was recorded in the accessible portion of the transcript.

The council’s action authorizes purchasing the split 5,000-gallon load at market price, subject to price changes and final invoice; no contract amendment or additional binding contract text was recorded in the transcript for this item.

The council also discussed fuel access rules: Brian said avgas may only be dispensed into containers approved for avgas (not standard red gasoline cans) and that the Stevensville airport is unstaffed and unmonitored at times, so usage is common and not supervised continuously.

No amendment to the motion or conditions limiting the purchase price or delivery schedule was recorded in the transcript.