Wausau firefighters/EMT's Tim Bingham, left, and CJ Heiser fuel their ambulance at the city pumps at the Public Works facility on Myron Street. As part of a city contract, Riiser is the sole provider of fuel for more than 600 pieces of city equipment, including emergency response vehicles. / Dan Young/Daily Herald Media
Riiser among mayor’s top donors
Riiser Oil Co. owner Jim Kemerling, former owner Tom Riiser and his wife, Phyllis, have together contributed $900 to Wausau Mayor Jim Tipple’s election campaigns since he first ran for mayor in 2004, finance reports show. The Riisers alone have given $700, which is one of the largest contributions from a single family. Tipple has raised nearly $40,000 total since 2004.
Tipple said he was not directly involved in hiring Riiser as the city’s only fuel supplier, because he does not have a vote on the Finance Committee that approved the deal, so the Riisers’ campaign contributions didn’t affect the city’s decision. He also said the money from Riiser and Kemerling came as personal donations from friends, and not from Riiser Oil itself.
“I don’t accept anything from corporations,” Tipple said.
Others believe the Riisers and Kemerling’s relationships with the mayor could have influenced the deal.
“I think that (the campaign donations) explains it all,” said Jerry Remington, owner of Remington Oil, who was not given the opportunity to apply to be the city’s sole fuel supplier.
WAUSAU — The city of Wausau might have again violated state bidding laws when it awarded an exclusive contract for its fuel needs to Riiser Oil Co. without letting competitors apply, Daily Herald Media has learned.
The contract, signed in July and revealed in the news organization’s review of city spending, made Riiser Wausau’s sole supplier and ended the city’s longstanding practice of seeking bids for fuel. The Wausau-based company provides fuel for more than 600 pieces of city equipment, from police cars, firetrucks and snowplows to lawnmowers and chain saws, and has billed the city $750,000 during the past year.
The Riiser contract will automatically renew each year without requiring City Council approval, according to city documents.
Wausau Public Works and Utilities Director Brad Marquardt said Riiser saves taxpayers money by monitoring underground fuel tanks and fuel market prices, and then deciding when the city should buy fuel. Riiser also can provide “split loads,” he said, taking half to the city and half to one of its Wausau stores, which allows the city to receive any amount of fuel and not be at the “mercy” of the market at any one point in time.
The city hired Riiser using an exemption in the state bidding statute that allows no-bid contracts for services worth more than $25,000 if the government agency can show that no other vendor can meet the requirements. It was the same exemption the city used to hire landscapers and bird sculptors last fall for a west-side median project that was later determined to be in violation of bidding and wage-reporting laws.
“Riiser is the only local supplier of fuel,” Marquardt wrote in a document last spring justifying the no-bid fuel contract. “Other vendors could provide the same service. However, they would not be able to deliver split loads in the same cost savings manner.”
That’s not true, according to at least one north central Wisconsin fuel supplier.
Jerry Remington, owner of Antigo-based Remington Oil Co., said he would have “absolutely” applied for the job to be the city’s sole fuel provider if the city would have given him the opportunity. Today, he said he is certain he could be providing the same level of service at a lower price for taxpayers.
“All I’ve ever asked is the opportunity to give a quote,” said Remington, who has been the owner for 40 years of a company his father started. “There should always be competition with taxpayer dollars. I live and breathe this game.”
In past years, Remington often outbid Riiser for the city’s fuel service.
In 2012, the city awarded 10 of its 25 fuel contracts to Riiser, according to city records. Remington Oil was the lowest bidder and won 14 contracts. Draeger Oil, also of Antigo, won one bid.
The city’s public transportation system, Metro Ride, is not part of the contract with Riiser and still seeks bids when its fuel supplies run low. Riiser was the low bidder on just three of the bus service’s 15 fuel contracts last year, according to data from Transit Director Greg Seubert.
“We seek bids for fuel every three weeks or so, and get four or five price quotes, from as far away as Medford,” Seubert said.
Riiser owner Jim Kemerling said his company did not bid on all of those Metro Ride contracts, or all of the city contracts in 2012, but he did not provide information on how many bids Riiser lost.
Wausau Mayor Jim Tipple said he’s confident the city is getting the best deal because Riiser checks prices three times a day and sends the city weekly reports.
“Sometimes they guess wrong and it can cost us more, and they show us that, too,” Tipple said. “I’ve seen four or five where they mistimed it, and that can happen. But we, as a city, really like that we don’t have to worry about the gas prices.”
Riiser has saved the city an estimated $11,000 over the past year by making fuel purchases when the prices were lower, Kemerling said.
Tipple has received campaign contributions from Kemerling and former owners of Riiser but said that had no bearing on the contract. The mayor said the company approached him with the idea of being the city’s sole fuel provider, and he passed it on to the Finance Committee for consideration. The committee approved the contract in March 2013; it did not go to the full City Council for a vote. The city and Riiser used the system on a trial basis starting in March 2013, and signed the contract in July.
Although state law allows such “sole-source” contracts in certain circumstances, the statute says the practice should be avoided unless it is clearly necessary and justifiable. The justification must withstand public and legislative scrutiny.
Remington, whose business has one gas station in Rib Mountain and one in Wausau, said his company has the same ability as Riiser to monitor the market and provide split loads. In fact, he already does so for many of counties for which he frequently supplies fuel, including Oneida, Langlade and Shawano counties, he said.
The city came under fire for a similar decision last year involving the median improvements along the Highway 52 Parkway, including decorative metal birds. Other local contractors complained they could have done the work at less cost to taxpayers but were never allowed to bid. The city then hired an independent attorney, who agreed in January that the city broke state competitive bid laws on the $112,000 project.
At least one Finance Committee member is questioning whether the city should have approved the contract with Riiser, as recommended by staff.
“We just need to be more careful about these sole-source contracts,” said Keene Winters, who also serves on the City Council. “The council needs to see greater information and not just take it on faith.”
Theresa can be reached at 715-845-0665. Follow her on Twitter as @tclift.