04/15/08 — Gas prices guzzle municipal pocketbooks

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Gas prices guzzle municipal pocketbooks

By News-Argus Staff
Published in News on April 15, 2008 2:10 PM

With oil hovering at $112.38 a barrel, the increasing price of gas is beginning to take its toll not only on Wayne County residents, but also on city and county governments.

The city of Goldsboro usually buys 3,500 to 5,000 gallons of unleaded gasoline and 2,500 to 3,000 gallons of diesel fuel per week, and even though it buys in bulk, its costs are still up.

Since Feb. 13, the price of unleaded gas has risen by 40 cents per gallon, translating into an increased cost of nearly $2,000 weekly.

The price is even steeper for diesel fuel.

City officials paid $2.75 per gallon early in February, but paid $3.52 per gallon last week -- an increase that will likely cost another $2,000 more per week.

"That's for the entire city fleet and GATEWAY," city Public Works Director Neil Bartlett said.

And, while GATEWAY -- the biggest user of fuel -- buys the fuel from Goldsboro at the same price the city pays, City Manager Joe Huffman said they are having to move things around in the budget to meet their expenses.

"It comes down to absorbing as much as possible in the budget and then utilizing fund balance at the end of the year if necessary," he said. "We try to project well. However, this variable is difficult to predict a year in advance as we do with the budget."

For the 2007-2008 budget, $479,500 was incorporated for gasoline and $281,700 for diesel fuel.

During last week's City Council meeting, the Public Works Department asked for additional funds, saying that with the increasing gas prices, their funds for transportation will likely run out with nine weeks left in the fiscal year.

The council approved an additional $117,000 for unleaded gasoline and $74,000 for diesel fuel to last them until the next fiscal year begins in July.

City officials project that at least $150,000 more will be needed for next year's budget -- nearly $850,000 for both gasoline and diesel.

The story is much the same for Wayne County.

"We're beginning to feel it," County Manager Lee Smith said. "I'm hoping I won't have to adjust departments, but this last quarter is going to be a test.

"I think we're going to be mighty close this year."

For the current fiscal year the county had budgeted for fuel prices between $2.75 and $2.80 a gallon. The county, which has used a purchase card system for at least the last five years to pay for its fuel, does not pay the state gas tax -- approximately 30 cents.

County Chief Financial Officer Pam Holt, however, does not have an accounting for how much they spend on fuel because the funds are included in each department's individual budget.

They are, though, currently evaluating their situation.

"My hope is I'll be able to shift (money) within departments (in order to not draw from fund balance) and right now, I think we'll be able to do that," Smith said.

But at the end of the day, fuel will have to be paid for.

"The departments have done a good job of scaling back, but like with the sheriff's office, when you've got to go, you've got to go. How do you cut back driving for emergency services?" Smith said. "So it's difficult to find the balance, but I think for the most part our employees are doing a phenomenal job in cutting back and conserving where they can."

For the coming fiscal 2008-09 fiscal year, however, they are planning to budget for fuel at $3.50 a gallon.

Smith said, though, that they're not yet sure how exactly that increase will impact departments' projected budgets.

Wayne County Public Schools officials also are keeping a watchful eye on the rising gas prices, which primarily affect the 246 regular and activity buses and 53 maintenance vehicles.

By the completion of the current school year, fuel costs for the district's buses are expected to be up by 40 percent, with fuel for maintenance vehicles up 8 percent, said Nan Barwick, assistant superintendent for finance.

"From the beginning of this school year to now, we have seen a 31 percent increase in the cost per gallon," she said.

Fortunately, she added, "I did budget enough funds to cover this kind of increase. As far as the budget we're OK because we did anticipate fuel might be a problem this year."

The district budget for bus fuel this year was an estimated $1 million, Mrs. Barwick said, with another $105,000 appropriated for maintenance vehicles.

The Department of Public Instruction also allocated the school system an additional $90,000 to help defray fuel costs, she noted, "but that's just like a drop in the bucket."

School systems receive no state funding, however, for maintenance vehicles, which are paid through local dollars, Mrs. Barwick said.

The biggest concern now is what lies ahead.

"I know I have enough funds for this year," she said. "I didn't factor quite this much for next year (when) I did the budget back in January. Things have increased significantly since that time.

"That will probably be an issue we need to revisit once we know what our funding is going to be."

In the meantime, Mrs. Barwick said her office will continue to anticipate shifts and make plans accordingly.

"If there are things that we need to do about bus routes, we need to look at a lot of different things because if the cost continues to go up, we need to look at the best ways without having to cut services," she said.