An item that threatened to create a budgetary nightmare three months ago could prove a partial salvation as the Henderson City Council digs into a budget with proposed increases in property tax, water and sewer rates.
Fuel prices could provide key savings toward a balanced budget if the council is willing to gamble that those costs won’t soar again in the next year.
The council is looking for creative solutions for the city’s budget, which City Manager Eric Williams said Wednesday is the toughest he has ever faced. After several years of belt-tightening, there’s not much left to squeeze, he said.
The council’s Finance and Intergovernmental Relations Committee will begin a second round of department-by-department sessions scrutinizing the budget tonight at 7. Police Chief Glen Allen and Public Works Director James Morgan are due to appear.
Coincidentally, their two departments are the city’s biggest fuel users.
Overall, municipal vehicles will consume more than 100,000 gallons of gasoline and almost 40,000 gallons of diesel in the fiscal year that starts July 1. That means each additional dime on the price of fuel adds roughly $14,000 to the city’s annual expenses.
When department heads submitted budget proposals in early March, they calculated fuel costs based on prices of $1.55 per gallon for unleaded gasoline and $1.60 per gallon for diesel. After pump prices in Henderson neared $2.30 per gallon this spring, Finance Director Traig Neal recalculated the budgets using $1.95 per gallon for gas and $2 for diesel. (The municipal government is exempt from roughly 45 cents per gallon in taxes that individuals pay.)
Now that pump prices have fallen back below $2 per gallon, the city has an opportunity to revert to the original figures. Cutting 40 cents per gallon off the fuel prices would reduce the budget by about $56,000, which is equivalent to more than four-fifths of a penny on the tax rate.
That’s not a huge amount in a total city budget of more than $25 million with a proposed 5-cent increase in the property tax rate. But it’s a start.
In an interview Wednesday, City Manager Eric Williams said he’s reluctant to roll the dice on a lower gas price and risk facing a midyear budget shortfall.
Fuel prices have the potential “to go up and up and up,” Williams said. “We need to be real careful with that.”
(Update: An example of that volatility is that gas prices around Henderson are 10 to 12 cents higher today than they were Wednesday.)
Setting an accurate price has implications for services and taxes now and for the fund balance at the end of June 2006.
Any cut in budgeted fuel expenses now would free the council to cut the proposed tax increase or increase spending elsewhere, such as the additional $119,000 necessary to maintain backyard garbage collection. At the end of the fiscal year, any extra money from a too-high fuel budget would go into the fund balance, but any money needed to cover the gap from a too-low fuel price would decrease the fund balance.
Williams said that no matter what, the police and public works vehicles have to roll, so the city’s going to use the fuel. credit counseling services aloha comsumeraccredited aatbpratt memo alan damien creditaccreditation american texas association sailingunion arn credit alberta networkrates loan american agcreditaccredited pro-life universityallegant county credit Mapclasses online college accreditedcredit 0 down mortgage badcredit major reporting 3 agenciesbankruptcy for filing addresses for creditorsstudy accreditationfree credit card accept4 courses credit graduate0 cards percent credit and Map