County budgets feel weight of rising gas, construction costs
By Maria Sprow
A year ago , as county oficials were drafting their 2008 budgets, the average price of gas in Texas was somewhere around $3 a gallon coming out of the July 4, 2007 holiday weekend. Those were the days.
As the cost of gas forces middle class Americans to skip their lunches and increases the popularity of public transit, and causes the price of related goods – meaning, just about everything else – to rise, Texas county officials are having to wrestle with gas prices for control of their budgets.
While the private sector can raise the price of gas-related goods in order to make up for the increased shipping and production costs, county government doesn’t have quite the same flexibility.
County officials across the state see the impending crisis and are biding their time looking for solutions, but aren’t getting many answers. Some counties have formed committees to look into ways to continue to save on gas. Others have purchased hybrid vehicles or alternative fuel fleets. Some have canceled or delayed construction projects. Judges have considered having the county open for fourday weeks instead of five. Long-standing employee benefits such as access to county vehicles and out-of-town training and networking opportunities are being slashed. Global Positioning Systems are being used to cut down driving distances. Training agencies are utilizing online teaching and conferencing programs so that counties don’t have to pay travel expenses.
Last year around budget time, many counties had a reasonable expectation of what would happen to gas prices during the next budget cycle. Some hit low, guessing $3.50 a gallon, but set aside contingency funds for their optimism. Others guessed $4 and their 07-08 budgets are largely holding up.
But going into the next fiscal year, officials have to wonder: will gas prices actually plateau at $4.15 a gallon, as the U.S. Department of Energy hopes? Or will they continue rising, and at what pace?
Lubbock County Commissioner Bill McKay doesn’t have any idea. While his county’s purchasing officer had been fairly certain last year about his $4/gallon estimate, he was unable to make a confident estimate this year, McKay said.
“We anticipated this monster showing up in our backyard. It did. But now how big is it going to grow?” McKay said. “(Our purchasing director) didn’t have confidence in some of the forecasts. Nobody knows what’s going to happen. It’s driving everybody crazy.”
And with good reason. While other ‘uncontrollable’ costs, such as indigent defense, only drive one aspect of a county’s budget, gasoline is different. It’s connected to sheriff’s patrols, construction costs, road crew expenses, utility bills and training opportunities.
“Office supplies is another budget line item where most departments were looking at an increase in funding. The need for an increase can be directly related to fuel prices. Everything we utilize in the way of supplies in county business is trucked at one time or another,” wrote Milam County Judge Frank Summers in a column in the Cameron Herald to try and explain the county’s budgeting needs and process. “Be assured that the majority of the increase in next year’s budget (is) in some way linked to fuel costs.”
Because of the increases, counties all across the state are looking for new ways to curb gasoline expenses. Travis County created a committee of department heads to examine how the county can cut back on gasoline use, though county officials still expressed concern that department heads wouldn’t be able to reduce consumption by enough to make a difference.
The burden on sheriff’s departments is especially obvious. While some expenses are “voluntary” – how many patrols are roaming county roads or even to an extent inmate transport from jail to court – others are necessary, such as having to respond adequately to emergency calls. Gas prices have been on the rise for years, and many sheriffs departments have already looked at switching to foot or motorcycle patrols, retraining deputies to drive more economically, buying V-6 instead of V-8 patrol cars, having deputies work out of annexes, implementing no idling policies and ending policies that allow officers to take squad cars home.
Nationwide, some departments, such as the Twin Falls County Sheriff’s Office in Idaho, have limited the number of miles deputies are allowed to drive each shift and are requiring deputies to spend a certain amount of time doing foot patrol (According to local media reports, Twin Falls deputies must now do an hour and a half of foot patrol and cannot drive more than 230 miles per shift).
The Montgomery County Sheriff’s Office is beginning to require deputies to park in high-visibility locations and turn their patrol cars off for 15 minutes each shift, in order to observe the area, do foot patrols or write reports.
How effective will that be?
According to various sources, the average engine getting 20 miles/ gallon uses up a half-mile of gas for every minute it sits idle – so turning off an engine for 15 minutes rather than keeping it in idle would save 7.5 miles of gas a day. That’s still just about 1/3 of a gallon, but at $4 each, that’s $1.33 a day, per shift worked. Multiply that by the 365 days in a year and the cost savings aren’t phenomenal, but still helpful. (Though another source estimated that a V-8 engine spends about 3 cups of gas idling every 15 minutes, which is half the other estimate; in general, finding out how much idling an engine actually impacts a budget is difficult.)
Though Lubbock County departments weren’t expecting to run out of money in their current gasoline budgets, McKay said the high gas prices were causing other concerns.
Materials for road, bridge and building construction and repair have increased in cost, and not just for asphalt and steel. The cost of asphalt and natural gas means that hot mix, cold mix, high performance cold mix and oil dirt prices have also risen. Vendors are refusing to lock-in long term rates on their materials and are reserving the right to change their prices as long as they give 30-days notice. Some vendors are increasing the costs of their products or are charging shipping and delivery surcharges.
Lubbock commissioners were having to be more judicious when determining which roads would be fixed and how, as the cost of road pavement mixes increased.
“The cost for hot mix has gone from the low $40s to the upper $60s per ton,” McKay said. “In the past, not that we wasted it, but we are focusing on the critical needs … as opposed to ‘It would be nice to put some hot mix on this road.’ We repair damage to the roads to ensure safety.” The county had also received higherthan- expected cooling bills early on.
While commissioners are being careful about which roads get fixed, they are looking at ways to reduce their utility bills.
“We are looking at ways to reduce the cost of cooling the courthouse,” McKay said, adding that the options originally included closing the building on Fridays and going to a four-day, 10-hour workweek.
But while that may be an option for other types of businesses and maybe some county departments, McKay said he personally did not see it as an option for the courthouse.
“In terms of our design and why we are here, we are here to serve the public and to provide criminal and civil justice to the community. In terms of courts and the backlog of court cases, our charge is to handle these court cases and process these court cases as quickly as we can,” McKay said. “The people in the community, they just think the courthouse is supposed to be open. Seventy to eighty percent of our personnel is for the justice system, so that’s really what drives our business. What I’m looking at is, can we maintain or improve our level of service and how can we do that for equal or less dollars?”
Instead, the county has focused on looking at when during the day they turn the cooling system on and off. It’s about all they can do, while praying that the weather doesn’t hit record highs early on next year.
“How much greater is that requirement going to be next year? If that demand is greater, then it gets into tax dollars,” McKay said. While Lubbock commissioners closed the door on closing the courthouse on Fridays, they are still considering extending office hours in order to give employees the option of having flex schedules or working four ten-hour days.
“Every employee in the county is not extremely well-paid,” McKay said. “Everybody in America would love I think a four-day work week.”
Lubbock isn’t the only county considering such a switch. Hidalgo has also discussed going to four-day work weeks. But so far only a few departments or office holders have done so. Some, like the Hidalgo County Clerk’s office, are still keeping offices open five days a week but allowing employees the option of working four days a week; others, like the Lubbock County Treasurer’s Office are closing offices on Fridays.
“The discussion of a four-day work week has been focused on exploring every facet of what a four-day work week would entail, in order to save on utility costs or to save employees on their fuel cost of getting to and from work, or to save on county vehicle use,” McKay said. “We are visiting with every department in the county and working through what we can do in their office. Can we open 30 minutes earlier and stay open 30 minutes later? If we were to do that five days a week, we don’t want to get into overtime.”
Other counties have found other ways to help employees curb their own fuel costs, realizing that as the cost of gas increases, pay-checks and benefits shrink in comparison -- especially as counties begin decreasing certain practices, such as allowing certain employees to take home county-owned vehicles.
Montgomery County commissioners have encouraged their county employees to participate in the NuRide program, a free online ridesharing community that requires organizations to become members in order for their employees to be able to match up carpooling needs. The program is online at www.nuride.com. Currently, the “community” is only available in Houston, Minneapolis, Minn., Washington DC, New York City, Connecticut and Hampton Roads, Virginia.
Counties outside of the Houston-area region wanting to create their own in-house carpools could do so with other free Webbased applications, such as maps.google.com, which allows for a “My Maps” option in which users can create a map with their own destinations by using a placemark tool and then sharing the map with others (so employees who wanted to participate in the carpool could add their address and then contact other employees who live in their neighborhood or on the way). Keeping it in-house ensures that employees are going to the same destination at the same time and eliminates the frustration of having to search through databases of people all going in different directions. However, the tool does take some time to learn how to use.
There does seem to be some good news on the horizon, both for counties and their employees. According to the monthly Short Term Energy Outlook completed by the U.S. Department of Energy in June, gasoline averaged $2.81 per gallon in 2007 and is expected to average $3.78 per gallon this year.
The report stated that the average price per gallon is only expected to increase slightly for 2009, to $3.92 per gallon. But, as the report notes, that $3.92 figure is “48 cents higher than projected in the previous Outlook.” And the $3.78 figure was “up more than 25 cents from last month’s Outlook” so there’s a history of optimism. (The July 8 Short-Term Energy Outlook gave a new end-of-year average of $3.84 per gallon of regular-grade gasoline and estimated that an average gallon of gas will cost $4.09 in 2009.)
As for the U.S. Department of Energy’s speculation on diesel fuel prices: “Diesel fuel retail prices in 2008 and 2009 are projected to average $4.32 per gallon, up from $2.88 per gallon last year. This reflects strength in diesel demand, particularly in emerging markets, that has significantly increased the margins between diesel prices and crude oil costs from those of last year. Diesel fuel prices are projected to remain near the June 2 price of $4.71 per gallon over the next few months as refiner margins begin to weaken slightly, offsetting the projected rise in crude oil costs.”
The July prediction was similar: Diesel fuel was expected to remain stable for several months and average $4.48 per gallon in 2009.
