This is a printer friendly version of an article from www.thedailytimes.com
To print this article open the file menu and choose Print.
Article published Nov 13, 2008 Highway Department sees some relief from fuel prices
By Joel Davis of The Daily Times Staff
Falling gas prices mean some budgetary relief for the Blount County Highway Department.
"Big time relief," Highway Superintendent Bill Dunlap said. "... Taking the sales tax off it, we're in the $1.90 per gallon range when it was in the $2.75 range, close to $3, back in the summer. It's less money going out with revenues being down both on the gas and the sales tax, Any savings we get are a godsend."
In May, the County Commission approved a $200,000 budget increase for the Highway Department to offset escalating fuel prices, increasing the fuel line item to $650,000. That increase was carried over into the fiscal year 2008-2009 budget. Fuel is the second highest line item in Dunlap's budget. The budget for asphalt is about $1 million.
In response to the increase, in May, Dunlap implemented a 10-hour-per-day, four-days-per week, Monday through Thursday, work week for the about 60 employees on his road crews, to cut fuel costs.
Of the $650,000 fuel budget for the current fiscal year, the Highway Department has spent about $300,000, leaving about $350,000 through June 30.
"Right now, we're all right," Dunlap said.
If oil prices stay relatively low, it would help the county on the cost of asphalt, which currently costs the county about $63 a ton, as well.
"Next year, I hope that gas will stay at the level it is," Dunlap said. "If that's the case that means that the asphalt index pricing will be down. Hoping everything stays about where it is now, we'll get into some pricing in the mid-to upper $30s (per ton)."Road repaving halved
In 2006, asphalt cost the county about $32 per ton. At about that price, Dunlap's department managed to repave 30-35 miles of county roads per year.
"I hope that I'll be able to hit 20 miles this year," Dunlap said. "We've been doing anything from 30 to 35 miles (per year) in the past, sometimes 40. We'll be down almost half what we have been."
Falling gas prices are helping the Sheriff's Office out, too, which is still feeling the effects of this summer's high fuel prices.
"The lower gas prices gets us more in line with what we budgeted for the 2008-2009 fiscal year," said Public Information Officer Marian O'Briant said. "However, we are still playing catch up from several months of high gas prices. We budgeted $388,000 for fuel, but we've already spent $220,033 (to date)."
During the past few years, prior to the global economic slump, the county has dealt with rising prices for both fuel and asphalt because of increasing global demand for oil. That's changed as high gas prices and now economic uncertainty have sapped demand.
In August 2008, Americans drove 15 billion fewer miles, or 5.6 percent less, than they did in August 2007 --the largest ever year-to-year decline recorded in a single month, according to Federal Highway Administration. Tennesseans alone drove nearly a half-million less miles.
"Which makes it one of the biggest single state declines in the country," said FHA spokesman Doug Hecox during a telephone interview on Wednesday. "It looks like that Tennessee was in the top three (declines)."$2.12 per gallon
Stephanie Milani, public affairs specialist with AAA East Tennessee, said that gas prices are currently "looking wonderful." On Wednesday, the average price for a gallon of regular gasoline in Maryville was $2.12.
"That is down 18.5 cents from last week's average," Milani said. "We are doing very well there. The national average is at $2.20 while the Tennessee state average is $2.05."
Will gas prices stay low?
"It's really hard to say with oil prices being so volatile this year, but right now prices are kind of following suit with oil prices," Milani said. "As long as oil stays low, we anticipate the price of gasoline will stay low as well."
AAA is still seeing people cutting back on driving, even at current prices.
"Compared to about a year ago, we are still seeing that people have cut back in their driving whether that's doing several stops at once or if they are simply not going places that aren't necessities," Milani said. "We still see that trend and people being concerned. Some experts says that once the averages get around $2 per gallon, they may swing back the other way, but honestly with the slow economy people could continue to stay at home. We're not sure which way the consumers are going to go with that."Asphalt plants hurt
The high asphalt prices and the economic slowdown has hurt business for asphalt producers like the Harrison Division of APAC-Atlantic, which has offices in Alcoa. The company is shutting down some of its plants down for the year about a month early because of lack of work, said Vice President Gary Loflin.
The falling cost of oil will not be quickly reflected in asphalt prices.
"If the cost of the asphalt cement, the ingredient that goes in our asphalt, goes down, it will obviously have an impact," Loflin said. "The price of oil is the number everybody looks at, but the asphalt cement is an end-product of the oil refining business. It's not necessarily the price of oil today that is reflected in the price of asphalt cement today."
According to the Associated Press, asphalt is becoming scarce throughout the country as oil refiners have shifted their output to maximize output of gasoline and diesel.