Filling It Up at the City Pump (Part I):Why Doesn't the Amount Coming In Equal the Amount Going Out?

The City of Geneva maintains its own little filling station, consisting of two pumps which dispense gas and diesel fuel to designated City vehicles. Certain City workers, and some staff from two other, non-City agencies (the Geneva Housing Authority and the Geneva Business Improvement District—more about that in Part II) are authorized to fill it up at the City pump.

The City purchases the fuel from distributors at a price determined by a state bidding process, which helps to keep costs down. In January 2005, the City paid $1.64 per gallon for diesel and $1.24 for gas. Three years later, by the first half of 2008, prices had climbed to $3.66 for diesel and $2.81 for gas, and then peaked that summer. That was back when the national average for a gallon of regular gas was at $4.06 (retail). In the meantime, it’s come back down, to $1.77, in January 8, 2009, and, currently, to $2.72, in our area.

In 2006, the City spent $231,037 (actual) for fuel. Last year, 2008, at budget preparation time, City staff said that as of July 31, 2008, the City had exhausted its entire fuel allocation for the 2008 budget year. In reaction, the 2009 budget, passed by Council, included an increase of approximately 90% in spending on fuel, bringing the appropriation to a whopping $376,617! If that figure tracks directly with the usage records at the Comptrollers office, it would mean actual fuel costs for the City have risen about 63% in the three years from 2006 to 2009. That’s an increase of more than 20% per year for the past three years.

As an aside, we note that with gas half the price it had been when the budget was being prepared, there ought to be substantial savings for that line item in 2009. But, it’s not quite that straightforward. The price of fuel and the amount used fluctuate in any given year according to variables that include weather, number of fire calls, etc. With the snow that hit us earlier in the year, we’ll have to see what happens to actual spending.

According to records maintained by the City Comptroller, the vast majority of fuel is used by two departments: Highway and Police. The Police department uses exclusively gas, while Highway uses both gas and diesel, which has always been more expensive than gas. We submitted a Freedom of Information Law request (FOIL) for these records. According to the City Comptroller, in January 2005, Highway used a total of 3,348 gallons of fuel; Police, 1,753 gallons. Four vehicles in City Hall, counting the then-City Manager’s company car, used 458 gallons. For the entire 2005 year, Police used a total of 19,996 gallons of fuel. City Hall used 3,411. For 2006, Police used 19,581, while City Hall used 466 gallons.

According to the City Comptroller, City departments, such as Fire and Police, are billed by the City itself for the fuel that department has used. Those departments have a “gas and oil” line in their individual budgets that they transfer to the General Fund as payment for those bills. The money received from those departments appears as revenue in the City budget. (What the City had spent initially for the fuel is listed as a budget expense.)

You would think that “gas and oil” revenue would, therefore, equal “gas and oil” expenditures. It seems like a principle of Accounting 101 that the amount coming in should equal (or, better yet, exceed) the amount that went out. For some reason, it doesn’t. And we don’t know why. In other words, if the City buys, in bulk, $100 (actual) worth of gas, then revenue (actual) coming back in to the City from departments for their share of that gas that they used, ought to be $100, or thereabouts. It’s not.

For example, in 2006, the City spent a total of $167,514 (actual) on “gas and oil,” but took in only $83,200 (actual) in corresponding “gas and oil” revenue (p.2). Looking at another year, in 2007, the City spent a total of $231,037 (actual), and took in $83,200. So, for 2007, the actual “gas and oil” revenue to the City was $83,200, yet the 2007 actual amount spent for “gas and oil” was $231,037. Increased cost (represented by the amount the City spent) should track with increased reimbursement (represented by the amount received), but the City received the same round number each year. Going line by line through the actual expenditure of each departmental budget, the police spent $36,000; fire, $10,499; buildings and grounds, $68,966; and, “miscellaneous,” $115,572. The total of these four line items was $230,937, not $83,200.

We are wondering why there is a discrepancy between actual amounts spent at the departmental level and the corresponding value in the revenue column. Capraro met with Comptroller Tara Clark to review the results of the FOIL request and to get answers to these questions. While the Comptroller was extremely cooperative, we never really got to the bottom of the discrepancies, so we will keep working with City staff to sort them out.

In fact, the records we FOILed reveal other sorts of gaps and curiosities. In September 2005, and from late 2007 through early 2008, there were big jumps in the price of diesel; for gas, the increase was slow and steady, but the price of gas did rise dramatically that August from $1.63 to $2.59 per gallon. From August, 2005, to December, 2005, City records show “pump not registering” and so departments were charged for only “average” use. Actual usage, by department, for that period has never been ascertained.

Then there’s all sorts of City vehicles being driven home by City staff. According to the City Comptroller, City department “supervisors” and their assistants are allowed to use a City owned vehicle for transportation to and from work. Those vehicles, too, fill it up at the City pump.

So, if a City worker has a City vehicle and is allowed to take the vehicle home, and say home is 20 miles away, that’s a commute of 40 miles a day, 5 days a week, or 200 miles per week. At 20 miles per gallon, that’s about 10 gallons of gas a week, and at $3.00 a gallon, that’s $30 per week, times 50 weeks a year, the bill to the taxpayers runs about $1,500, for that one worker.

We note the Mayor of Rochester has recalled numerous City-owned vehicles used by workers to commute, at a substantial savings to Rochester tax payers. This not only saves the City money, but helps employees by saving them the headache of filling out cumbersome IRS documents related to calculating this benefit as income. The IRS requires that take-home vehicles be calculated as ‘compensation’ and therefore be considered with regard to taxation. To fail to report such use is a serious offense.

Finally, there is use of the City pump by non-City agencies-- the Housing Authority and B.I.D. As far as we have been able to determine, this practice goes back many years. Question is, why are they allowed to fill it up at the City pump? It’s apparently a good deal for them. Gas is cheaper for them and they have no overhead to worry about, including maintaining facilities, ordering product, billing etc. But why is the City favoring those agencies and why is the City picking up the tab for the overhead? And, by the way, who is keeping track of the gas budgets on their end, in their own organizations?