City weighs cutbacks as cost of gas climbs
|||Price at pump fuels tax 'windfall'|
By Sean Hao
Advertiser Staff Writer
Consumers aren't the only ones being burdened by higher gasoline prices in Hawai'i. The city and county of Honolulu will likely see its gasoline bill rise by $4 million this year.
The increased costs could mean spending will have to be cut in other areas.
County officials are looking for ways to reduce gas expenses, but they can only do so much. The local bus system, police and fire department are run by the county and all are heavy gasoline users.
Facing budget-busting gasoline costs, city agencies are looking at buying more efficient vehicles, cutting back or delaying non-essential expenses and buying cheaper, lower-grade gasoline. However, those steps aren't expected to offset a jump in what government spends on higher-priced gasoline so, ultimately, the extra millions of dollars in gas costs will have to be covered by taxpayers.
The biggest consumer of gas under the city and county umbrella is TheBus with its fleet of 455 vehicles.
This month, the city and county of Honolulu is paying almost $2.40 per gallon for diesel fuel used by TheBus, compared with $1.76 a gallon in September of last year. That adds up to an estimated $364,000 increase for September for TheBus, or more than $4 million a year.
The city hopes to reduce that gap by getting more commuters to use TheBus, which could boost revenues by $1 million to $2 million, according to city spokesman Bill Brennan.
Bus ridership is up about 6 percent this month compared to the same period last year, which means a $1.2 million increase in revenues if it continues, he said.
"Other savings measures, such as using cheaper fuel and inflating tires more regularly and sometimes with nitrogen will likely be implemented," Brennan said.
Ultimately the city and The Bus may need to cut back on or delay certain unspecified non-essential expenses; however, an increase in bus fares seems unlikely at this point, Brennan said. That means taxpayers ultimately may be stuck paying for the increase in diesel costs.
The fares paid by bus riders cover only about $41 million, or about 31 percent, of the annual operating costs of The Bus.
The Honolulu Police Department is also looking at ways to save money on gas. The HPD is switching to mid-grade gasoline, temporarily ending its practice of using only premium gasoline. The move is expected to save $10,000 a month.
Only about 6 percent of cars sold in the United States require premium gasoline, a grade of fuel required to meet octane standards of high-performance, high-compression engines, according to AAA travel club.
The HPD spent $2.49 million on premium gasoline in the 12 months ended June 30, compared with $2.17 million the previous year — an increase of $320,000. The department has budgeted $2.89 million for gasoline this fiscal year, but the actual number is likely to exceed that.
On a per-gallon basis, HPD paid $2.21 for premium last month, versus $1.89 in August 2004. That equates to a $40,000 increase, based on monthly consumption of 125,000 gallons of gasoline.
In addition to switching to cheaper gasoline, the department will look for money in other unspecified areas of the department's budget, said HPD Capt. Frank Fujii. In the future the department also plans to focus more closely on fuel efficiency when purchasing new vehicles.
The Honolulu Fire Department is also considering switching to cheaper gasoline. The department's nondiesel vehicles may begin using regular instead of mid-grade gasoline. The department's fuel costs rose 30 percent to $333,109 in the fiscal year ended June 30. Fuel costs this year are projected to rise to $580,799 because of heavier-than-normal brush fire activity and higher gasoline and diesel costs. That's $352,000 over the department's fuel budget for the 12 months to June 2006.
Battalion Chief of Administration Tommy Perkins said the department should be able to cover that shortfall without any big sacrifices.
"We haven't gotten to the point where we're real concerned about it yet," he said. "We're hoping there there will be a drop in use" as demand for firefighters returns to normal following a busier-than-usual brush fire season in July and August.
Among the other agencies dealing with increased fuel costs is the Honolulu Board of Water Supply. Gasoline and diesel costs rose nearly $7,000 last month, compared with August 2004. Electricity costs rose nearly $148,000 year over year.
The increases remain within budgeted amounts, said Su Shin, spokeswoman for the Board of Water Supply. However, higher fuel and electricity costs play a factor in water rates. The water board has not increased rates in 10 years, Shin said.
"These are increased operating costs that we need to monitor to see what is the best way to recover them," Shin said.
Reach Sean Hao at firstname.lastname@example.org.