Energy Prices hit Cities' Bottom Line

While each of us pay more for gas and energy on a regular basis, we may be hit with the sticker shock twice--as government agencies are spending more on their energy needs as well:

The prices for unleaded, diesel and natural gas have soared the last three months, well beyond what finance directors expected last summer when they were compiling the budgets for fiscal 2004-05.

"It's a problem for everybody," said Megan Taylor, spokeswoman for the League of California Cities.

"Local governments are hit by this just as are other consumers of gas. You can't stop picking up the garbage. You can't stop sending the police cars out. What it can mean is that the services that you and I depend upon are cut back in certain areas."

In Los Angeles, which is desperate to hire more police officers, the high price for fuel is costing the city the equivalent of 75 cops' salaries. Its main fuel budget is expected to go from $12.6 million to $18.7 million by the end of the fiscal year on June 30. In addition, the Los Angeles Police Department has already surpassed its $4.7 million fuel budget for police cruisers and other vehicles by $100,000 - with three months still to go in the fiscal year.

Los Angeles County's fuel costs are about 15 percent higher, a spokeswoman said. The Metropolitan Transportation Authority is paying twice as much as it budgeted for diesel, and 45 percent more for compressed natural gas to run its 2,490-bus fleet.

And Metrolink officials said they will consider raising fares by 1.5 percent - on top of a previously announced hike - partly because of the soaring price of diesel for its commuter trains.