U.S. cities cut services, raid reserves on fuel cost

NEW YORK Fri Jun 20, 2008 2:48pm EDT

A New York Metropolitan Transportation Authority bus in a file photo. Surging fuel prices are forcing cities across the United States to cut back on services and dip into cash reserves to keep their fleets on the road, according to a survey released on Friday. REUTERS/Chip East

A New York Metropolitan Transportation Authority bus in a file photo. Surging fuel prices are forcing cities across the United States to cut back on services and dip into cash reserves to keep their fleets on the road, according to a survey released on Friday.

Credit: Reuters/Chip East

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NEW YORK (Reuters) - Surging fuel prices are forcing cities across the United States to cut back on services and dip into cash reserves to keep their fleets on the road, according to a survey released on Friday.

Ninety percent of the 132 mayors surveyed by the U.S. Conference of Mayors reported that climbing fuel prices have had a significant impact on city budgets and operations.

The average retail price of diesel used in city buses and garbage trucks has shot up 65 percent over the past year. Gasoline prices jumped about 35 percent over the same period, as many local governments are feeling the pinch of the wider nationwide economic slowdown.

"It's just a snowball. It all hits at once. So, governments, mayors are having to make tough choices," said Mayor Douglas Palmer of Trenton, New Jersey.

"Everything is on the table except for a reduction in public safety."

Just under a quarter of the mayors surveyed -- 23 percent -- said they have been forced to slash spending for other programs in order to pay mounting fuel costs.

Seattle Mayor Greg Nickels said his city has raised its fuel budget by about 50 percent at the expense of other services including the police department.

"We could have added more police officers to the budget. We're having to look real closely at our parks program," Nickels said, adding Seattle might be forced to cut back on community centers and library hours if prices continue to rise.

Twenty-six percent reported dipping into cash reserves to pay higher fuel costs.

But one area where most cities have not been able to cut back is the number of miles city fleets travel: just 13 percent of mayors reported reduced driving due to high fuel prices.

"It's pretty hard to do that. Police cars are going to have to do what they do. You still have to pick up garbage," Palmer said.

RENEWED SENSE OF URGENCY

With fuel prices so high, cities across the U.S. have also seen a spike in the number of public transit riders.

And although using mass transit may reduce the dent that soaring pump prices are making in city residents' pocketbooks, the jump in public transportation use can also stretch city resources.

"The problem is that the fuel cost for the transit system is going up, just as everyone else's (fuel costs) are," Nickels said. "So, just at the time when more people are coming on, the operating costs are going up so they can't put more service out on the street."

More than half of the mayors surveyed said they are making changes to city transit, with nine in 10 saying they were investigating ways to promote alternatives to driving.

For instance, in Seattle, which already has a large fleet of hybrid Priuses and dispatches its parking officers on Segway scooters, plans are under way to begin using hybrids for police patrol, Nickels said.

"One of the effects of the fuel increase is a renewed sense of urgency -- rather than just talk about the problem, actually start funding and building ... so that people have a long-term alternative," Nickels said.

"Nobody thinks those prices are going down."

(Reporting by Rebekah Kebede; editing by Jim Marshall)

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