Gas prices a ‘budgeting nightmare’ for municipalities |

Soaring gasoline prices are impacting local municipalities’ budgets.

The average price for a gallon of regular gasoline in Virginia was $4.68 on Sunday, according to AAA. That compares with an average price of $2.94 at this time last year.

While Virginia motorists are spending roughly twice as much this year on fuel as they did last year, the town of South Boston is feeling the pinch at the pump as well.

“We’re in the same boat as everyone else. It’s not a pleasant situation,” said South Boston town manager Tom Raab. “We do get a good government rate on gas, but since January the rate has basically doubled.”

Raab called the skyrocketing gas prices a “budgeting nightmare.” South Boston’s public works director C.W. Crowder noted the line item for fuel in the fiscal year 2022-23 budget had to be raised twice after the budget was first drafted because of the continuous climb in gas prices.

During FY 2020-21, Raab said the town of South Boston consumed 7,380.6 gallons of regular gasoline, at a cost of $12,123.18. By comparison, during FY 2021-22, which ended June 30, the town consumed 7,881 gallons of regular gasoline, at a cost of $21,439.58, the town manager said.

In addition, town of South Boston vehicles consumed 8,540 gallons of diesel fuel, at a cost of $13,586.86 during FY 2020-21. By comparison, town vehicles consumed fewer gallons of diesel fuel — 7,720 gallons — during FY 2021-2022, at the higher cost of $21,338.27.

Like the town of South Boston, Halifax County also spent significantly more on gas last fiscal year than the previous fiscal year. The county spent an estimated $440,000 on fuel in FY 2022 compared to $330,000 in FY 2021, according to Halifax County’s director of finance Stephanie Jackson.

Raab called the rise in gas prices a “guiding factor” in proposing an increase in South Boston’s real estate taxes for FY 2022-23. South Boston Town Council voted at its June meeting to raise the town’s real estate taxes 6 cents, from 21 cents to 27 cents per $100 of assessed value.

The hike in gas prices also forced the town of Halifax to adjust its budget this fiscal year and is one of the reasons cited for a recent tax increase. Halifax Town Council voted in June to raise the town’s real estate taxes this fiscal year by 2 ½ cents, to 19 cents per $100 of assessed value.

“We can’t increase salaries, we can’t make payments for gasoline for our vehicles, utilities…we can’t do all that if we don’t also increase our income a little bit,” finance chairman Bill Covington stated at a May town council meeting.

Fueling up is inevitable for the day-to-day operations of the towns’ public works departments. Crowder said his department’s refuse and brush collection trucks average only 12 to 13 miles per gallon and typically fuel up daily.

The South Boston public works department has two pump stations in its parking lot, one for diesel and one for regular gas, where public works, fire and police, the Halifax County Rescue Squad and Halifax County Service Authority fill up their tanks. On average, Crowder said public works gets between 1,000 and 1,500 gallons in both tankers each week. The town bids out its gas supplier each week.

“We used to bid out every two weeks, but the prices are so high now that we bid out every week,” Crowder explained. “We call every Monday and get the prices from Foster Fuels, Davenport and Southern States. Whoever has the lowest price, that’s who we go with.”

For the current fiscal year (2022-23), the town of Halifax’s budgeted fuel costs were increased 8.89% for the Halifax Volunteer Fire Department, 25% for the police department, and 45.45% for the sanitation department, according to Halifax town manager Carl Espy. The higher increases for police and sanitation reflect those departments’ higher-than-budgeted actual costs in fuel in the previous fiscal year’s budget (2021-22), Espy explained.

Although Virginia gas prices have taken a slight dip since last month’s average of $4.80 per gallon for regular unleaded, the chances of more relief at the pump appear slim. Gov. Glenn Youngkin had proposed a three-month gas tax holiday in the commonwealth, but that was voted down by the Senate. And on July 1, Virginia gas taxes increased 7%, under a law that indexes gas tax to inflation.

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