CITY EYING GAS PRICES
(as published in the Gaily Gleaner, April 29/11)

The City of Fredericton hasn't had to dip into its fuel contingency budget yet, but spiking fuel costs are starting to push up expenditures for the first quarter of the year.

Fredericton Transit incurred an $8,601 over-expenditure from its first-quarter budget estimates for January to March with the higher costs driven up by additional fuel consumption. The city's snow-control budget is up $146,374 over projections for the first part of this budget year due to additional overtime for snow removal, sanding and salting. The snow-removal figures include $53,000 in additional fuel due to snowstorms in the first quarter of the year.

Coupled with increases in fuel prices, the city is also paying more in provincial gasoline taxes due to an increase announced by the provincial government in its March budget. The province increased its take of gasoline taxes by 3.5 cents. The provincial tax on regular fuel climbed to 13.6 cents a litre from 10.7 and the tax on diesel rose to 19.2 cents a litre from 16.9 cents a litre.

"The provincial tax increase is estimated to impact us by about $45,000 for the year," said finance committee chairman Coun. Mike O'Brien. As part of planning for the $98 million 2011 general fund budget, the city had reduced its fuel contingency reserve by about $200,000 after fuel prices seemed to level off in 2010.

O'Brien said the city plans to spend $1.8 million on fuel in 2011. On top of that, it has set aside $134,000 in the fuel contingency reserve for 2011. "We estimate as best we can, based on our fuel consumption, where we think the fuel prices are going to go and put a slight buffer in for bad winters and who knows what," O'Brien said.

"As of the end of March, we're on budget, but if fuel and diesel prices continue to go up, we're going to have to start cutting into our contingency budget. "As it stands right now, we're OK, but I did hear this morning that the prices are supposed to go up another two-tenths of a cent (Thursday) and there are wild rumours that fuel could go up to about $1.50 and if that's the case, we will use up our contingency and more, there's no question." City treasurer Tina Tapley will be monitoring the fluctuations in the price of fuel and city consumption.

O'Brien said the city has tried to conserve its fuel use by implementing anti-idling policies, using more fuel-efficient vehicles and putting additives into diesel fuel to stretch the dollars out a bit more. "Every couple of years, they do a comprehensive review of fleet use, including how many vehicles are being used, how many people are in a car, but you can only go so far and keep the city running," the finance committee chairman said. "But it's a concern to everybody."
The city burns through a lot of fuel to run transit buses, heavy equipment from trucks to snow plows, and fire and police vehicles.

"There's no way to avoid it. We just have to make sure we're doing it as efficiently as we can. There's only so much we can do about the increasing fuel costs other than at budget time trying to budget right. We don't want to be crazy and have too much an excess, but you have to have a slight buffer," he said.