Anchorage city departments blow past fuel budgets amid high gas prices

The Municipality of Anchorage is running out of gas money.

With diesel and gasoline prices hitting record highs this year, the city’s vehicle fleets of police cruisers, parks department pickup trucks, buses and heavy equipment have already exceeded fuel budgets.

“We will need to take operational steps to ensure critical public safety operations continue,” said Municipal Manager Amy Demboski. “We are working through those contingencies now, but it will likely mean a decrease in transit operations, potential impacts to snow removal, and impacts to street maintenance operations.”

Though international gasoline and diesel costs have eased in recent weeks, both remain over $5 a gallon in Alaska, which has some of the highest average prices in the country. (While high by historic standards, fuel prices in Anchorage are modest compared to costs in much of rural Alaska, which can exceed $10 per gallon.)

According to Mayor Dave Bronson’s administration, the budgetary overages are most acute in a few particularly vehicle-reliant municipal departments.

• The Public Transportation Department spent $1.4 million last year on fuel for the People Mover bus service and its AnchorRides program. “In the first six months of 2022, Transit has already expended $1.3 million,” Demboski said in an email.

• This year’s budget allotted $741,134 to the Street Maintenance section under the Department of Maintenance and Operations for diesel. Already, the section has spent $779,145. “Without some additional resources, the service level for plowing and hauling will be impacted, especially if we have a heavy snowfall in November and December,” Demboski said.

• The Parks and Recreation Department has spent $135,562 so far this calendar year, more than double the $65,739 initially budgeted.

• The Anchorage Police Department budgeted $1,052,634 for fuel this year. It has already spent $1,167,577.

APD vehicles can gas up at pumps by the department’s old Elmore headquarters in Midtown, or at Chevron stations across town.

“Approximately two-thirds of officers are refueling at the Elmore fuel island instead of Chevron locations across the municipality. The increased fuel cost has necessitated a change in refueling patterns, which has impacted operational efficiency,” Demboski said. “The need to refuel at our central location increases drive time, which ultimately is impacting officers’ availability to engage in officer-initiated activities and increased response time calls.”

Budget overages are standard in the course of the fiscal year, with unexpected costs from extra snowplowing or police overtime regularly necessitating a request from the administration for more money from the Assembly.

But this year, the Bronson administration took the unusual step of asking the Assembly to request $2,586,453 to pay for fuel from the second tranche of federal dollars going out to local governments under Congress’ American Rescue Plan Act, according to the mayor’s office.

The Assembly conducted a monthslong process of reviewing applications for how to divvy up the nearly $52 million in ARPA money, and ultimately picked dozens of projects to fund from a wide range of groups. At present, the list includes programs to expand child care, affordable housing for families and workers, adding Wi-Fi to parks and recreation centers, job training and purchasing buildings to house homeless individuals. A May resolution from the Bronson administration to the Assembly requests ARPA funds for extra fuel money as one of three dozen spending priorities, including over-time payments to the police and fire departments, heavy infrastructure upgrades, homelessness response services, new software for the Human Resources Department, vehicle fleet replacements, and $1 million to improve a pool in Chugiak. Several proposals from the mayor’s office are part of the package, including $1.5 million to clear beetle-killed spruce trees. But the extra fuel money did not make the cut.

Assembly member Austin Quinn-Davidson, who co-chairs the Assembly’s Budget and Finance Committee said the administration’s sole communication about fuel budget shortfalls was its inclusion as one line item of many in a request for ARPA funds.

“We asked the mayor’s office to provide that information and haven’t heard back yet,” Quinn-Davidson said of the administration’s ARPA proposals. “If there is information out there showing that we need to increase budgeting for fuels, which would make sense given the price of fuels, the Assembly would be happy to consider that.”

A former administration official quibbled with that characterization. Cheryl Frasca, who served as the director for the Office of Management and Budget for several months under Bronson, said the issue of fuel budget overages was raised twice to the Assembly, once in a lengthy April work session on municipal finances, and a month later a section in the administration’s ARPA-fund request.

Quinn-Davidson said many of the requests from the mayor’s office were for infrastructure projects that the city typically funds through voter-approved bonds. Likewise, the municipality tends to handle departmental cost overages through supplemental amendments.

“We do this with other things all the time,” Quinn-Davidson said. “At any point, at any time in the calendar year, the mayor and his team could bring forward a request for a supplemental budget addition.”

“The MOA is looking at all options,” Bronson spokesman Corey Allen Young wrote in an email, “that includes ARPA funding and supplemental budget appropriations.”

Another option might come from the state: This year the municipality will see millions more dollars from the Community Assistance Program than was initially forecast, $7.2 million compared to last year’s $1.6 million.

“We’re hoping that’s multiple millions of dollars we could put toward needs in the municipality,” Quinn-Davidson said.

This story has been updated with additional information on how the Bronson administration communicated its request for more fuel money to the Assembly.