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Area governments get low mileage out of fuel budgets

3-10-00 By MELISSA MIDGETT

HIGH POINT - The rising cost of fuel, in addition to angering motorists at the pumps, is beginning to take its toll on local governments.

Budgets that were approved almost a year ago when gas was still cheap are getting hit hard by the rising cost of fuel. It's costing more to keep everything from ambulances to dump trucks filled with gas, and officials are scrambling to find the money.

High Point will have to siphon funds away from other projects to cover the rising costs of gasoline in the next fiscal year, city manager Strib Boynton said Thursday.

The current $600,000 fuel budget should barely cover the city's gasoline bills through the end of the fiscal year without going in the red. But an extra $200,000 to $300,000 could be added in the 2000-2001 budget to pay for record-high fuel costs.

"It's a lot of money, money I'd rather be spending to improve streets or playgrounds or police and emergency services," Boynton said. "But it's the cost of doing business and it's something we can handle."

Across the Triad, local governments are finding their fuel budgets nearly empty, some forced to pay twice as much for gas as they did six months ago. Several area towns are bracing for large fuel budget increases as the fiscal year ends.

Businesses hit by rising fuel prices can pass their increased costs on to consumers. Governments can't do that.

Worldwide fuel prices have risen quickly in the past year as crude oil prices soared amid a global production cutback. Americans are paying about $1.50 per gallon of unleaded gasoline; in North Carolina, the average price was about $1.40 per gallon as of March 2, said AAA Carolinas spokeswoman Kristy Tolley.

The record-high prices recently prompted U.S. Energy Secretary Bill Richardson to lobby OPEC to pump more oil and bring the price down. Richardson predicts gasoline could hit $1.80 by summer. OPEC is scheduled to meet March 27 to discuss increasing production.

Even with increased production, Tolley said it takes six weeks or longer for those extra drums of oil to reach the Carolinas.

By that time, Davidson County schools could be as much as $50,000 over budget, said Jay Temple, transportation director for the county school system.

With just $45,000 left of a $165,000 budget to last until mid-June, Temple said there's little chance the money will last. The county's 215 buses, which transport county students as well as kids in Thomasville and Lexington, burn nearly 7,000 gallons of gas every three or four days, Temple estimated. Temple said the county paid about 88 cents a gallon for the last delivery. Local governments do not pay taxes on fuel.

"It's probably gone up just in the last few days," Temple said. "How high it will go is anyone's guess."

Temple and several other transportation directors around the Triad said there wasn't much more they could do to conserve fuel.

Randy Zimmerman, who manages Guilford County's fleet of nearly 570 vehicles, sheriff's cars and emergency services trucks, said gas prices are up nearly 55 percent for his agency.

Estimates on how that equates to cash in the coffers is hard to estimate, as yet, Zimmerman said. But there's little doubt that the hunt for extra money in other budgets will continue through the summer.

Temple said Davidson county will have to put other projects, such as minor school renovations, on hold and divert that money to the fuel budget.

The $20,000 yearly fuel budget that's usually more than enough to cover Archdale's 25,000-gallon a year consumption may be gone before the new budget takes effect in July, Archdale city manager John Ogburn said.

The city's fuel costs have risen about 25 cents a gallon since it filled its storage tanks a few months ago. The city usually buys gasoline three or four times a year, 7,000 gallons at a time.

"We're going to try not to buy gas again before the end of the fiscal year, but there's nothing we can really do to cut back."

Archdale's fleet of about two dozen police and public works vehicles have to keep running, Ogburn said. City employees aren't allowed to drive city vehicles to and from work unless they are on emergency or on-call duty, Ogburn said.

"We're already very efficient," Ogburn said. Thomasville finance director Tom Jarrett said he expected a 40 to 50 percent increase in his city's fuel budget, but he said the city has not decided where the money will come from.

In High Point, fleet superintendent Paul Damron said the city buys more than 750,000 gallons of gasoline each year to power more than 1,000 police cars, fire trucks, buses and other vehicles. Guilford County agencies stationed in this area also buy fuel from the city.

"Right now we're not at the point where we need to cut back, but if this doesn't stop soon we're going to have to sit down and think about it," Damron said.

Copyright ) 2000 News & Record

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-- (Dee360Degree@aol.com), March 10, 2000