Charleston is proposing to spend plenty more on fuel.

The city is budgeting more funds for fuel costs from the $27.4 million budget for the 2008-2009 fiscal year, which starts May 1.

City Manager Scott Smith said the city budgeted $275,000 for fuel, which includes gas and diesel fuel, up from $193,000 budgeted for the current fiscal year.

“We will be over budget this year on fuel and that’s why we increased it,” he said.

As the fiscal year in Charleston comes to an end on April 30, the fuel expenditures are projected to be over budget by about $18,000, Smith said.

In the 2006-2007 fiscal year, budget fuel costs were $188,000 compared to the $187,000 budgeted.

In addition, when the electric price-freeze ended at the start of 2007, electricity was expected to increase by $225,000.

Smith said the city decided to purchase electricity on the open market and was able to lessen the increase to $165,000.

For instance, the city spent $12,000 on electricity annually for City Hall before deregulation. With the increase in rate prices, the total cost to power City Hall would have jumped to $21,000 per year.

Smith is planning to bid on the open market again this year, but he is not optimistic, because he said electricity tends to follow oil prices.

Increased energy costs could delay projects in the city.

“We did push back a few projects to next year’s budget,” Smith said. “However, energy costs in some cases were not the only reason.

“In some cases, grant funding for example, forced us to move these projects back a year or so. In other cases, it may have been other reasons that forced us to make a change. Rising fuel and energy costs certainly had an impact.”

The city council approved a Request for Proposals at its Feb. 4 meeting to search for firms to reduce energy costs in the city.

The city could enter into contracts with a firm to update equipment, which could be paid for through energy cost savings.

Smith said energy savings is the main part of the process, but it could also benefit maintenance costs.

Part of the budget is that the city will spend more money than it will gain in revenue.

Smith said the city is spending down a $7 million library bond that was issued in 2005.

The bond and its interest is part of the cities revenue when it issues the bond, Smith said.

Since then, the city has spent down the reserves it from the bond to pay for the library renovation, he added.

The bond revenue will be completely gone at the end of the next fiscal year.

The city is also spending Motor Fuel Tax funds to pay off part of the $1.45 million widening and pavement of Fourth Street between Polk and Madison avenues.

The whole budget has been on file for public inspection since the March 18 City Council meeting and won’t be voted on until the April 18 meeting.

During that time, Smith will be going through the budget with City Council members to answer any questions they might have.

Mayor John Inyart said he sat down with Smith and Comptroller Heather Kuykendall to get a complete run through.

“I haven’t had a chance to do my second run through, but I will,” Inyart said. “However at this time, I see nothing that gives me heartburn.”

Matt Hopf can be reached at 581-8945 or at mthopf@eiu.edu.

Show are Charleston’s fuel expenditures in the last three years.

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