AGENDA #17e
BUDGET WORKING PAPER
TO: W. Calvin Horton, Town Manager
FROM: Mary Lou Kuschatka, Transportation Director
SUBJECT: Estimated Transit Fuel Use and Cost for FY 2005-06
DATE: April 27, 2005
Chapel Hill Transit uses diesel and gasoline to operate its fleet of buses, demand-response vehicles, and maintenance and service vehicles. Estimating the price of fuel for these vehicles each year is difficult due to volatility in the market. Fuel use is slightly easier to estimate due to the certainty of bus routes. However, mileage related to demand-response services has more uncertainty.
The Town of Chapel Hill Public Works Department maintains a database of weekly fuel prices dating back to November 2002. Transit typically uses Public Works estimates of fuel price when budgeting for fuel costs. The following chart depicts 2004-05 budgeted fuel price per gallon, 2004-05 actual weekly average, and 2005-06 fuel price budget as used in the existing Transit budget.
|
|
Gasoline |
Bio-Diesel |
Kerosene |
|
2004-05 Budget |
$1.40 |
$1.60 |
$1.25 |
|
2004-05 Actual (weekly avg. as of 4/18/05) |
$1.33 |
$1.61 |
$1.49 |
|
2005-06 Present Budget Estimate |
$1.80 |
$2.00 |
$2.00 |
|
2005-06 Estimate using federal Energy Information Administration data* |
$1.95 |
$2.00 |
$2.00 |
*This estimate extends through the summer only when fuel prices tend to be the highest.
Fuel use is obtained from Transit Maintenance records and is depicted in the following chart.
|
|
Gasoline (gallons) |
% increase over previous year |
Bio-diesel / Kerosene (gallons) |
% increase over previous year |
|
2002-03 |
42,043 |
|
520,934 |
|
|
2003-04 |
52,945 |
26% |
550,846 |
6% |
|
2004-05 (annualized) |
55,567 |
5% |
533,718 |
-3% |
|
2005-06 (estimate) |
60,700 |
9% |
572,000 |
7 % |
The fuel use figures used for 2004-05 were obtained from third quarter maintenance reports and then annualized to estimate the full year costs. The decrease in diesel/kerosene fuel use from 2003-04 to 2004-05 is thought to be due to shorter deadhead miles, increased use of newer buses with better fuel mileage, less idling time, and no new driver training classes in the first three quarters of the year. The 2005-06 levels for fuel use were estimated from previous year’s increases/decreases and including an additional increase under the assumption there will be a continued increase in ridership and additional buses in service next year.
Using the present budget price estimate and the transit usage estimate, fuel costs in fiscal year 2005-06 are budgeted at $109,260 for gasoline and $1,144,000 for diesel/kerosene. At best, the estimated price of fuel for 2005-06 is a rough guess due to continuing price volatility. We believe the present estimate is reasonable based on what we know now and will continue to monitor fuel prices.