Rising fuel prices pinch municipal budgets
As gas prices continue to rise across the nation, local municipal officials are feeling pain at the pump, and in their pocketbooks. The average price of regular unleaded gasoline averaged $2.54 a gallon on the East Coast last week, according to the U.S. Department of Energy. That number is up nearly 20 cents from the week before and 68 cents from the same week last year, according to the energy department.
The average price for diesel fuel also averaged $2.54 a gallon on the East Coast, up nearly 16 cents from the week before and 73 cents from the same week in 2004, according to the energy department.
Municipalities across the state and nation are pinching pennies while trying to keep their heads above the red ink flowing into their budgets because of escalating fuel costs.
The increase in gasoline and diesel fuel prices this year has already eaten up almost all of the money the city of Uniontown allotted for fuel in this year’s budget.
The budget contains a line item of $48,415 for fuel, but the city already has spent $48,119 this year to keep the police cars, fire trucks, garbage trucks and street department trucks running.
City Councilman Bob Cerjanec, the director of accounts and finance, said the city’s various departments have consumed the same amount of fuel as they did last year, but higher prices are taking a toll on the budget.
“We’ve used 98.9 percent of the line item,” Cerjanec said. “From a consumption standpoint, we’re steady, with no increase in fuel consumption.”
He said the city seeks bids every year for fuel and accepts the lowest bid. He said the low bidder this year was Pacific Pride.
The bid price is cheaper than retail prices, and the city does not pay taxes for the fuel it uses, Cerjanec said.
In 2004, the city paid $1.04 a gallon for gas and $1.07 a gallon for diesel, he said.
This year, the prices were $1.41 a gallon for gas and $1.45 a gallon for diesel, but the prices have risen significantly and have been passed on to the city.
He said terminals, which sell fuel to local gas stations, raised the prices they charge the stations, which are known as jobbers. The jobbers then pass the cost increases along to their customers, including the city, Cerjanec said.
“The city is absorbing the cost increases from the terminal to the jobber,” he said.
Cerjanec attributed the rising prices to reduced supply and increased demand for fuel.
“You have supply and demand. It prevails. The city is a victim of the hazards of the industry,” Cerjanec said.
Dunbar Borough Council President Kathleen Dynes said the borough bought the police department a bicycle about a year ago, and they are going to have to start using it for patrols.
“They are simply going to have to do more foot patrols and use the bike,” said Dynes, “until gas prices come down. Right now, we are robbing Peter to pay Paul. We can cut back, but we still have to maintain a standard of safety.”
Dynes said she didn’t have the exact figures for the borough, but said the council has cut back on the number of trips that maintenance workers make.
“There is no more running somewhere just for one thing,” Dynes said. “We don’t want them to go back and forth. We want them to think about what they are going to need and to make only one trip.”
Scottdale Borough Manager Barry Whoric said the fuel prices are “significantly” affecting his borough’s finances.
“I just printed a budget report the other day that showed the police department was about to go over budget,” said Whoric, noting that as of Aug. 12, the borough had budgeted $3,700 for fuel for the police department and had a balance of only $818 left.
Whoric said for the recycling effort, he budgeted $200, and the borough has already spent $236. He said he budgeted $4,000 for public works, which is for maintenance equipment such as borough trucks, and the borough had spent $3,712.21 as of Aug. 12.
Whoric said the fuel prices have affected every department, and he is waiting to see where fuel prices go towards the end of the year.
“Every department is going to be over their budget, but we are not certain by how much,” he said. “Once the snow starts flying, the maintenance department will be out plowing the streets and our fuel costs will rapidly diminish.”
Whoric said Scottdale’s budget is made up of many line items so the borough may be able to borrow from some other accounts to offset the fuel prices.
“Overall, fuel is a small piece of our budget,” Whoric continued. “It may be because we don’t have a lot of vehicles but with a $1.5 million budget, we budget less than $10,000 for fuel.”
Whoric said the fuel prices did have an effect on the summer paving project, however. The borough will spend about $57,000 to pave a dozen streets and alleys, but the price of asphalt has gone up about $10 a ton.
As for garbage collection, he said the borough is under contract with Waste Management and so far the company hasn’t approached the borough about a pay hike or a surcharge.
Last month, Fayette Waste asked Vanderbilt Borough for a 60-cent a month fuel surcharge to cover the increased fuel costs, and the borough council approved it. Fayette Waste owner and route manager William Piccolomini said although the increase wasn’t in the four-year contract the council signed last year, it was a necessary move.
Piccolomini could not be reached for comment Friday.