Rising costs of gas fuels budget issues for governments

YAKIMA, Wash. — For Debbie Zarana, the prospect of rising fuel prices is hardly surprising.

"I think we always expect that it will go up," said Zarana, transportation supervisor for the Naches Valley School District. "If it goes down, it's a great surprise, but usually we expect it to go up."

With fuel prices expected to increase in the next few months, school districts and municipalities say they have plans to deal with some of the rising costs.

Retail fuel prices are expected to peak around Memorial Day, as it has historically, with a range of $3.85 to $4.15 per gallon, said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.

Prices have actually gone down the last few months with less demand for a growing fuel supply from refineries. That led companies to close several refineries.

"Come spring, when demand starts to ramp up, (the closure) may come back to pinch Americans," he said.

Most schools and government entities pay less for fuel than the average motorist, thanks to wholesale pricing and tax exemptions.

But the prices still trend in a similar direction, said Richard Wonner, fleet and facilities manager for the city of Yakima.

DeHaan said it's unlikely that government entities will pay $4 a gallon, though it's a possibility.

Still, costs will be higher, something they are used to by now.

About 82 percent of public entities surveyed said their fuel budgets have increased from 2006 to 2011, according to a poll by Government Fleet magazine, a trade publication. Out of those who have seen increases, 28 percent say it's increased by more than 25 percent.

Similar trends have been seen locally.

Wonner remembers when the city of Yakima's fuel budget was under $1 million a few years back.

Last year, the city of Yakima spent $1.71 million on fuel for its fleet,<FEFF> which includes around 500 to 600 vehicles and trucks, slightly above the nearly $1.69 million budgeted for 2011. That figure does not account for fuel for police and fire vehicles.

A final budget for 2012 is in the works, but Wonner expects to spend just as much, if not more this year, as prices continue to fluctuate.

Efforts to conserve fuel are plenty, but they don't always result in lowering fuel budgets.

In 2008, the city of Yakima and Yakima County teamed up to negotiate a contract price with local vendors. Under the current contract, the two entities purchase fuel at slightly above the wholesale price.

In addition, the city of Yakima purchased a few hybrids and prohibits vehicle idling.

Wonner said such tactics have helped keep consumption stable with a growing fleet but they don't completely alleviate the situation.

"We do the work we have to do and buy the fuel that we have to buy," he said.

Yakima County's overall fuel cost has steadily climbed over the past three years -- $1.2 million in 2009, $1.5 million in 2010 and $1.7 million in 2011, budget director Craig Warner said.

Various departments have taken steps to reduce their fuel use as much as possible, Warner said, such as having employees drive directly from home to a road-building project, for example.

"We do the best that we can, but I don't know that some of our activities can be limited," Warner said.

Last year, Sheriff Ken Irwin had hoped to cut 10 percent from his $315,000 fuel budget, which is part of the total county figure.

He asked employees to try to drive less. For patrol deputies responding to calls across the widespread county, however, that's difficult to achieve.

"We had pretty good compliance from people, but it was just the price of doing business," Irwin said.

But the sheriff's fuel costs still ended at $323,000 -- up 2 percent for the year.

During the 2010-2011 school year, the Naches Valley School District spent $96,605 on fuel for its vehicles.

The district tries to save money by shopping around every time it needs to buy fuel, which usually happens every month or month-and-a-half, Zarana said. Additional savings may come from having bus drivers stay on the site of a school event rather than coming back for pickup or combining tasks during a single trip.

"If we can do the same (fuel budget) as the year before or a just a little bit over, (we'll be) happy with that," she said.

* Mai Hoang can be reached at 509-577-7685, or at maihoang@yakimaherald.com.

* Mark Morey can be reached at 509-577-7671 or mmorey@yakimaherald.com.