City of Anchorage utilities blow past fuel budgets amid high gas prices

The municipality of Anchorage is running out of gas money.

As diesel and gasoline prices hit record highs this year, the city‘s vehicle fleets of police cars, park service pickup trucks, buses and heavy equipment have already exceeded fuel budgets.

“We will need to take operational measures to ensure the continuation of critical public safety operations,” said City Manager Amy Demboski. “We are currently working on these contingencies, but it will likely mean reduced transit operations, potential impacts on snow clearing and impacts on street maintenance operations.”

Although international gasoline and diesel prices have declined in recent weeks, they both remain above $5 a gallon in Alaska, where average prices are among the highest in the country. (Although high by historic standards, fuel prices in Anchorage are modest compared to costs in much of rural Alaska, which can exceed $10 a gallon.)

According to Mayor Dave Bronson’s administration, budget overruns are most acute in a few city departments that are particularly vehicle-dependent.

The Public Transport Department spent $1.4 million last year on fuel for the People Mover bus service and its AnchorRides program. “In the first six months of 2022, Transit has already spent $1.3 million,” Demboski said in an email.

• This year’s budget allocated $741,134 to the Street Maintenance section of the Diesel Maintenance and Operations Department. Already, the chapter has spent $779,145. “Without some additional resources, the level of service for plowing and transport will be impacted, especially if we have heavy snowfall in November and December,” Demboski said.

• The Parks and Recreation Department has spent $135,562 so far this calendar year, more than double the $65,739 originally planned.

• The Anchorage Police Department has budgeted $1,052,634 for fuel this year. He has already spent $1,167,577.

APD vehicles can refuel at pumps near the department’s former Elmore headquarters in Midtown, or at Chevron stations across town.

“About two-thirds of officers fuel up at the Elmore fuel island instead of the city’s Chevron locations. The increased cost of fuel necessitated a change in refueling patterns, which impacted operational efficiency,” Demboski said. “The need to refuel at our central location increases drive time, which ultimately impacts agent availability to engage in agent-initiated activities and increases call response time.”

Budget overruns are common during the year, with unforeseen costs due to additional snow clearing or police overtime regularly necessitating a request from the administration for more money from the Assembly.

But this year, the Bronson administration took the unusual step of asking the Assembly to seek $2,586,453 to pay for fuel from the second installment of federal dollars paid to local governments under the American Rescue Plan Act of Congress.

The Assembly conducted a months-long review process to determine how to allocate ARPA’s nearly $52 million and ultimately chose dozens of projects for funding from a wide range of groups. Currently, the list includes programs to expand child care, affordable housing for families and workers, adding Wi-Fi to parks and recreation centers, job training and the purchase of buildings to house the homeless. Several proposals from the mayor’s office are included in the proposal, including $1.5 million to remove beetle-killed spruce trees. But the extra money for fuel didn’t make a difference.

“We haven’t heard anything about the shortage,” said Assemblyman Austin Quinn-Davidson, who co-chairs the Assembly’s Budget and Finance Committee. Quinn-Davidson said the administration’s only communication about the fuel budget shortfalls was its inclusion as one item among others in a request for ARPA funds.

“We have asked the mayor’s office to provide this information and have not yet received a response,” Quinn-Davidson said. “If there is information showing that we need to increase the budget for fuels, which would make sense given the price of fuels, the Assembly would be happy to take this into account.”

Quinn-Davidson said many of the requests from the mayor’s office were for infrastructure projects that the city typically funds through voter-approved bonds. Similarly, the municipality tends to manage departmental cost overruns with additional credits.

“We do this with other things all the time,” Quinn-Davidson said. “At any time, any time during the calendar year, the mayor and his team could submit a request to add additional budget.”

“MOA is considering all options,” Bronson spokesman Corey Allen Young wrote in an email, “this includes ARPA funding and additional budget appropriations.”

Another option could come from the state: this year the municipality will receive millions more from the community assistance program than originally planned, or $7.2 million compared to $1.6 million last year. .

“We’re hoping that’s several million dollars that we can dedicate to the needs of the municipality,” Quinn-Davidson said.

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