May 21, 2008

City's new budget already $350K in the hole

Two days after narrowly approving a $170.9 million that officials said left them with little extra to deal with emergencies, they got some bad news.
The bids for diesel fuel were opened Wednesday and came in almost 40 percent higher than the city had anticipated, which means an additional $350,000 more than the budget anticipated will likely be needed to keep Bristol’s trucks on the move.
Several of the Board of Finance members who favored a larger property tax hike had urged colleagues to pump up the contingency fund so that City Hall could more easily handle unexpected costs.
But their efforts fell short in the face of the majority’s preference for holding down the property tax increase.
Now it appears that the pinch may be more than anyone could have guessed, with more than a third of the money set aside to deal with a year’s worth of emergencies possibly required to pay fuel bills that came in higher than anticipated.
The city’s purchasing office reported that Buckley Energy offered the cheapest price for diesel at $4.02 a gallon – lower than people will find at the pump, but much higher than the $2.90 cost the budget counted on.
That means every gallon of diesel the city uses during the fiscal year that starts July 1 will burn through $1.12 more than the budget has in it.
Mayor Art Ward took immediate steps to try to lessen the crunch.
He told department heads in an email Wednesday to submit “suggested/real means of immediately initiating/implementing conservation methods in order to lessen the tremendous energy and monetary burdens on all of us.”
He asked them to submit their ideas as soon as possible.
It isn’t clear why the budget used a $2.90-per-gallon figure for diesel costs since the price of diesel fuel has been over $4 a gallon at the pump for more than two months.
The U.S. Energy Information Agency says that while diesel fuel was cheaper than regular gasoline for many years, it’s been higher than gasoline since September 2004.
The reason, it says, is “high worldwide demand for diesel fuel and other distillate fuel oils, especially in Europe, China, India and the United States, and a tight global refining capacity available to meet demand.”
In addition, the agency reports, “The transition to lower-sulfur diesel fuels in the United States is affecting diesel fuel production and distribution costs.”


Earlier version of this post:

The soaring cost of diesel fuel has already set up a situation where the city will need $350,000 more next fiscal year than the budget passed Monday provides for.
The pinch on the already depleted contingency fund just got a lot worse.

Here's what the mayor wrote to department heads this afternoon:

FROM: MAYOR ARTHUR J. WARD

Please read the below email from the City's Purchasing Department. I am requesting that all departments submit suggested/real means of immediately initiating/implementing conservation methods in order to lessen the tremendous energy and monetary burdens on all of us. Please have these submissions in writing to my office as soon as possible.

If you have any questions, feel free to contact the Mayor's office.

Thank you.


Mayor Ward, I opened the bid results today for diesel and we are awarding to Buckley Energy at a cost of $4.0158 per gallon. The economic forecast estimate was $2.90 per gallon, a difference of $1.1158 per gallon. I spoke with the Assistant Comptroller and she determined that $350,000.00 additional dollars will be needed for diesel fuel costs for FY 2009. Let me know if you need any additional information.

*******
Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

32 comments:

Anonymous said...

There is nothing anyone could have done about this. No one projected that fuel would jump to this price.

the geek said...

I applaud the mayor for making efforts to reduce the budget.

Good luck sir.

Anonymous said...

I guess the world looks a bit differently once you remove your head from the 'sand' .(being polite )

Anonymous said...

While the original budget was based on prices back in Dec, Jan, why did they not realize that even on May 1, their original price figures were inadequate??

Where are the financial people?

Anonymous said...

Pay me now or pay me later.

Maybe the Board of Finance knew what they were talking about.

Anonymous said...

Who the hell is advising the mayor???

Or isn't he listening?

Anonymous said...

Art: a day late and a dollar (actually a lot more ) short!

Anonymous said...

Is Art being set up?

Anonymous said...

Where was the purchasing Agent on all this?

Wasn't he the one that overlooked the city policy on the Bugryn relocation effort? And didn't Klocko go along with him?

Didn't he mess up the Mall Demolition?

Art, you need to find out who your friends are!!!

Anonymous said...

Why didn't Russo get the bids BEFORE the budget hearing?

Or at least some verbal indication?

He certainly did not do the mayor any favors.

Anonymous said...

$2.90? Has anyone been paying attention at City Hall since that number was plugged in? YIKES!
And opening a bid AFTER the budget has been set in stone? Is that common practice? I think Klocko has some explaining to do. The sad thing is that as usual at City Hall, no one will probably get written up for this. Get another bucket to pour on the inferno Mayor, and good luck.

john cullen said...

Just another dose of reality to highlight the fact that a City Manager would be of no use to the taxpayers of Bristol. To paraphrase a quote from one of our long standing leaders and echoed by others in a recent Council vote, "The current system of government works well for the citizens of Bristol." Lucky us.

john cullen

Anonymous said...

With "14 years experience", shouldn't Ward be on top of things like this???

Or was it 1 year of experience 14 times???

Anonymous said...

What did they estimate gasoline at? $1.99.9 per gallon?

Diesel has been over $4.00 for a long time now.

Where is the estimate for heating oil? $149.9?

Someone was asleep at the switch.

By the way, maybe idling the city trucks for four hours while a crew digs a ditch should be discontinued. The trucks can actually be turned off while parked. Same goes for police cruisers. City employees use fuel like it’s not their money. Oh yeah, it’s actually our money.

Maybe department heads could calculate fuel usage against mileage to determine idle time.

No, the unions would balk at that. Got to keep the vehicle running to keep the heat on in winter and the air conditioner on in the summer or the crybabies will paper city hall with grievances.

Artie, your so called buddies are eating you alive

Anonymous said...

Sorry guys, you can't blame the mayor for the ridiculously high gas prices. I think he'll be riding his bike to work along with the rest of us if something doesn't happen soon. Somebody's laughing all the way to the bank, but I don't think it's Art Ward.

Anonymous said...

Stop all use of city cars going home!

Anonymous said...

Back in December many of the oil industry experts were predicting lower oil prices in the neighborhood of $80 per barrel. Even the Saudis had made statements at the time that that was their expectation.

These high oil prices are unprecedented and are now completely unpredictable.

Anonymous said...

Baloney!

Someone was either asleep at the switch or they are setting Artie up for a big fall.

Anonymous said...

I am not blaming the Mayor for the high petroleum prices, I am strongly criticizing him for not being aware or at least questioning the prices used in estimating fuel costs.

Even 3 three weeks ago EVERYONE knew that fuel costs had risen dramatically in a short time.

And he knew, or should have, that there was a shortfall last (current) budget year.

What more did he need to know????


He is in way over his head.

Anonymous said...

3:07

That basically was done by the last administration, unless Ward undid it.

Police and Fire Chiefs still have that authorization, I don't know about anyone else.

Anonymous said...

"He is in way over his head." ...

He's not the only one. Unfortunately, I think we all are.

Anonymous said...

Lets have a petition to drive city vehicles only three days a week.

Anonymous said...

Steve - I thought the City had a locked in fuel price for the year?

Anonymous said...

The city should change it's habits.

-- Rotary lawn mowers without engines.

-- Instead of three trucks on a site with 4 guys, make it 1 truck.

-- I supervisor driving around checking jobs, not 3 or 4 or 5

-- Tell the Building Department guys to slow down when they are driving the city cars.

Anonymous said...

If the Mayor really wants to save money he should offer non essential employees that are not directly involved with the citizens to take a small pay cut (10%) in turn for the ability to work from home (log in from home is available at the City) for 1 or 2 days a week.

Anonymous said...

Russo seems to have been involved with a number of screw ups recently.

Is anything going to be done about it?

Anonymous said...

I agree that no one could have imagined such a huge increase. But I also agree with the comment asking why this wasn't looked at before the budget vote.

Here's a little suggestion on saving some fuel: How about sending the street sweeper ONCE to a street. My street was done and then done AGAIN a few days later. And TWICE on the 2nd time around.

?

Anonymous said...

10:03

We should not be functioning on imagining, but should function on sound business practices.

Even in mid-April the rate was much higher than the rate used by Ward, Klocko et al.

They knew that the 2007-2008 fuel budget went over. Why wasn't that a heads up.

Does any one in this administration know what is going on?

Anonymous said...

Seems the Mayor has his head someplace and its not on the budget. How can he not see this one coming?

Anonymous said...

These are the same people that fought and criticized the last mayor when he stopped letting city workers from taking their car home every day. At least he got rid of most of them.

Anonymous said...

I heard that Ward has opened the door again to peopel taking vehicles home. (Bargaining unit people)

If it is true, shame on him.

Anonymous said...

Yes, he has "relaxed" the car use policy. We are back to square one again.