LITTLE ROCK — Diesel-fuel costs are going up for Central Arkansas Transit Authority buses, raising the public agency’s fuel budget next year by $167,400 and possibly causing service cutbacks.
CATA locked in a sixmonth price of $2.24 per gallon with Truman Arthur Corp., of Texarkana, the CATA Board of Directors were told Tuesday. The price is up from $2.032 the agency pays now to a different supplier. CATA uses 675,000 gallons per year.
The board authorized staff earlier this summer to contract for the best negotiated price up to $2.40 per gallon.
The current $2.032 fuel contract saved CATA about $500,000 from its previous contract of $2.858 per gallon that ended a year ago.
CATA will budget fuel at $2.28 per gallon in 2011, finance director Wanda Crawford said, which is how the $167,400 difference is figured. The new contract for $2.24 per gallon takes effect Oct. 10 with another contract to be needed by April 1 for the remainder of next year.
The higher contract for the final three months of this year will put CATA about $47,000 over its 2010 budget of $1.37 million for diesel, Crawford said.
The increase in fuel costs is part of preliminary CATA budget preparations expected to also include higher costs in health insurance and workers’ compensation, CATA Executive Director Betty Wineland said after the meeting.
“If there’s a budget shortfall, we have to figure what we’d have to cut to compensate for it,” Wineland said, adding that decreasing routes would be considered. “Nothing’s been mentioned about a fare increase and, in this economy, I would very muchhate to go up even another nickel.”
The basic adult fare is $1.35.
CATA operates bus service in Little Rock, North Little Rock, Sherwood, Maumelle and unincorporated parts of Pulaski County in exchange for those governments paying for transit based on a formula of miles served. The combined local share paid CATA is $8.8 million for 2010.
CATA used $722,857 from its reserves from 2009 to offset its funding partners’ budget reductions for this year. The reserve funds came in part from the decrease in fuel costs from 2009 to 2010.
About $500,000 of the reserves used made up a shortfall in Little Rock’s $6.45 million share that avoided cutbacks in bus service in the city.
“Adding that back in becomes a big deal,” Wineland said of next year’s budget.
Fuel prices are volatile and change day to day. A chart provided directors of one-year contract offers showed prices higher by as much as 10 cents per gallon from Friday - the day the agency agreed to the price - and one week before. The six-month contract is 11 cents per gallon lower than the latest one-year price.
“We ended up having only three companies in the bid process and pitted those three bidders against each other,” said Sharon Williams, CATA’s grants and procurements manager. “We got the very best price. We saw that the prices started climbing.”
Board member Bruce Moore, Little Rock’s city manager, asked about the increase in the diesel price because preliminary city budget projections foresee gasoline costs dropping.
“Gas is, but diesel is going up,” Williams replied. “It’s just been steadily increasing.”
Arkansas, Pages 10 on 09/23/2010