Soaring fuel costs overshoot regional budget by $9M

Region pays for gas for public transit buses, police cruisers, ambulances, garbage trucks

The rising cost of gas prices is putting significant pressure on the regional budget — an estimated extra $9 million by the end of this year.

Regional councillors were told at a meeting Wednesday that the soaring cost of fuel, along with the climbing inflation rate, will mean plenty more dollars added to the costs side of the regional budget.

“If current prices persist for the remainder of the year, 2022 fuel costs could exceed the budget by approximately $7.5 million to 9 million,” a report to council says.

That represents a 66 per cent increase over the region’s 2022 budget for fuel, which is about $13.7 million. The fuel budget is based on gas prices of $1.06 a litre for diesel and $1.08 a litre for gas. But fuel prices in 2022 have averaged $1.56 a litre for diesel and $1.45 a litre for gasoline, the report said.

Fuel is used for public transit buses, police cruisers, ambulances and garbage trucks. Regional Coun. Tom Galloway said the region uses a lot of fuel, with buses using the biggest portion of the fuel.

“That is huge,” Galloway said referring to the additional $9 million. “It’s a big number.”

A one-per cent property tax increase amounts to about $6 million, Galloway said.

“It doesn’t mean we are going to raise taxes,” he said. “We will have to reconcile that somehow.”

With the consumer price index rising by 6.9 per cent in April, soaring inflation is also affecting service contracts with the region.

Regional contracts for janitor services and waste management have exceeded budget by $1 million, the report said.

It is also pushing up the cost of tenders for capital construction projects, including road reconstruction and the resurfacing of the Region of Waterloo International Airport parking lot. Regional staff are expected to return to councillors next month with recommendations on how to address rising fuel costs. A preliminary 2023 budget review will also be presented at a committee meeting.

Regional contracts for janitor services and waste management have exceeded budget by $1 million, a report said