Budgeting for fuel in St. Paul appears to be as slippery as an oil slick.
The city has overspent its fuel budgets over the past five years by a total of about $1.3 million, or 13 percent, with wide swings from year to year, according to records.
In 2005, the city went over budget by about $187,000. The next year it had to find $432,000 to cover the shortfall. The overspending dropped to $55,000 in 2007 but jumped to $789,000 in 2008. In 2009, though, the city actually spent $128,000 less than expected.
City officials say the volatility of oil prices, unpredictable events and an odd-timed budget cycle all contribute to the difficulty of balancing the fuel budget. Extra money spent on fuel must come from other parts of the city's materials and supplies budget, meaning equipment might not be replaced or services, such as lawn mowing, could be reduced. The fuel budget is part of the city's general fund, most of which is financed with property taxes.
A guessing game?
"Budgeting for fuel is imprecise," said Margaret Kelly, the city's finance director.
In many respects, it's a guessing game.
The city estimates how many gallons of fuel it will use, based on previous years' usage, and forecasts what a likely price per gallon will be more than six months before the new budget year starts. The 2011 fuel budget was submitted last spring.
But city officials don't know how much they're going to pay per gallon until a yearlong, fixed-price contract is negotiated. That usually happens in the fall.
St. Paul is part of a consortium of metro governmental agencies that works with the state to secure a bulk price for fuel contracts. The idea is to lock in a price on speculation that it will stay cheaper than the market.
But if that price ends up being higher than the market over the year, there's a problem.
The city departments that handle vehicle fleets -- fire, police, parks and recreation and public works -- can try to conserve where they can, but services such as storm cleanup and snow plowing can't be cut back.
The city's fuel budgets have risen steadily between 2005 and 2009, from $1.2 million to $3.4 million. The proposed budget for 2011 is unchanged from this year at $3.4 million.
Long road ahead
Mayor Chris Coleman has made sustainability a priority in his administration. His environmental policy director, Anne Hunt, has been working with city staff to find ways to conserve energy, be more environmentally friendly and save taxpayers money. Strides have been made in reducing electricity and natural gas costs, but fuel costs remain a tricky subject.
In 2006, after the administration adopted a policy to buy smaller fleet cars, Ford Focuses began to replace less-fuel-efficient Tauruses. The city has a no-idling policy. Employees are encouraged to carpool.
Some city vehicles have switches that shut off engines if they're left idling too long. Maintenance schedules are more closely scrutinized. A few smaller electric vehicles were purchased.
The Police Department, which has almost 500 vehicles, has set a goal of cutting its fuel budget by 10 percent, said Sgt. Jim Ramstad, fleet manager. He said his department can't adhere to the no-idling policy all the time because lights and computers use a lot of battery power and would die if vehicles were shut off.
Hunt said she thinks the city is moving in the right direction toward conserving more fuel.
"There's not going to be one silver bullet," she said. "There needs to be a multipronged approach."
Chris Havens • 612-673-4148