Biennium Budget Decision Package

Transcription

1 Biennium Budget Decision Package Agency: 405 Department of Transportation Decision Package Code/Title: 8F Fuel Rate Adjustments Budget Period: Regular Session Budget Level: ML Maintenance Level Program: E Transportation Equipment Fund Agency Recommendation Summary Text: Various WSDOT programs use gas and diesel fuel for motor vehicles and equipment to maintain and operate the state transportation system. The March 2017 price forecast projects higher fuel costs in the biennium. The department requests an increase of $1.9 million to appropriations for programs that use gas and diesel fuel. The department also requests a $5 million increase in non-appropriated Transportation Equipment Fund (TEF) spending authority for TEF purchases of fuel for the department and for fuel sold to other agencies. Fiscal Summary: Operating Expenditures FY 2018 FY Total FY 2020 FY 2021 Washington State Department of Transportation (WSDOT) Total Fund State 2,000 2,000 4,000 2,000 2,000 Fund 09F-1 HOT-State -7,000-6,000-13,000-6,000-7,000 Fund MVA-State 924, ,000 1,846, , ,000 Fund State 6,000 6,000 12,000 6,000 6,000 Fund MMA-State 9,000 9,000 18,000 8,000 10,000 Fund nap 2,486,000 2,487,000 4,973,000 2,487,000 2,486,000 Total Cost 3,420,000 3,420,000 6,840,000 3,420,000 3,420,000 Program B - Operating Fund 09F-1 HOT-State -7,000-6,000-13,000-6,000-7,000 Total by Fund -7,000-6,000-13,000-6,000-7,000 Program C - Operating Fund MVA-State Total by Fund Program D - Operating Fund MVA-State 38,000 39,000 77,000 39,000 38,000 Total by Fund 38,000 39,000 77,000 39,000 38,000 Program E - Operating Fund nap 2,486,000 2,487,000 4,973,000 2,487,000 2,486,000 Total by Fund 2,486,000 2,487,000 4,973,000 2,487,000 2,486,000 Program F - Operating Fund State 2,000 2,000 4,000 2,000 2,000 Total by Fund 2,000 2,000 4,000 2,000 2,000 Page 1 of 7

2 Operating Expenditures FY 2018 FY Total FY 2020 FY 2021 Program H - Operating Fund MVA-State 23,000 23,000 46,000 23,000 23,000 Total by Fund 23,000 23,000 46,000 23,000 23,000 Program K - Operating Fund MVA-State 5,000 5,000 10,000 5,000 5,000 Total by Fund 5,000 5,000 10,000 5,000 5,000 Program M - Operating Fund MVA-State 843, ,000 1,685, , ,000 Total by Fund 843, ,000 1,685, , ,000 Program Q - Operating Fund MVA-State -8,000-8,000-16,000-8,000-8,000 Total by Fund -8,000-8,000-16,000-8,000-8,000 Program S - Operating Fund MVA-State 8,000 7,000 15,000 7,000 8,000 Total by Fund 8,000 7,000 15,000 7,000 8,000 Program T - Operating Fund MVA-State 6,000 5,000 11,000 5,000 6,000 Total by Fund 6,000 5,000 11,000 5,000 6,000 Program V - Operating Fund MMA-State 1,000 2,000 3,000 1,000 2,000 Total by Fund 1,000 2,000 3,000 1,000 2,000 Program X - Operating Fund State 6,000 6,000 12,000 6,000 6,000 Total by Fund 6,000 6,000 12,000 6,000 6,000 Program Y - Operating Fund MMA-State 8,000 7,000 15,000 7,000 8,000 Total by Fund 8,000 7,000 15,000 7,000 8,000 Program Z - Operating Fund MVA-State 9,000 9,000 18,000 9,000 9,000 Total by Fund 9,000 9,000 18,000 9,000 9,000 Revenue FY 2018 FY Total FY 2020 FY 2021 Fund nappr 2,486,000 2,487,000 4,973,000 2,486,000 2,487,000 Page 2 of 7

3 Object of Expenditure FY 2018 FY Total FY 2020 FY 2021 E. Goods and Services 2,373,000 2,372,000 4,745,000 2,372,000 2,373,000 F. Net Cost of Goods Sold/Fuel 1,047,000 1,048,000 2,095,000 1,048,000 1,047,000 Total Cost 3,420,000 3,420,000 6,840,000 3,420,000 3,420,000 Program B - Operating E. Goods and Services -7,000-6,000-13,000-6,000-7,000 Total by Program -7,000-6,000-13,000-6,000-7,000 Program C - Operating Program D - Operating E. Goods and Services 38,000 39,000 77,000 39,000 38,000 Total by Program 38,000 39,000 77,000 39,000 38,000 Program E - Operating E. Goods and Services 1,439,000 1,439,000 2,878,000 1,439,000 1,439,000 F. Net Cost of Goods Sold/Fuel 1,047,000 1,048,000 2,095,000 1,048,000 1,047,000 Total by Program 2,486,000 2,487,000 4,973,000 2,487,000 2,486,000 Program F - Operating E. Goods and Services 2,000 2,000 4,000 2,000 2,000 Total by Program 2,000 2,000 4,000 2,000 2,000 Program H - Operating E. Goods and Services 23,000 23,000 46,000 23,000 23,000 Total by Program 23,000 23,000 46,000 23,000 23,000 Program K - Operating E. Goods and Services 5,000 5,000 10,000 5,000 5,000 Total by Program 5,000 5,000 10,000 5,000 5,000 Program M - Operating E. Goods and Services 843, ,000 1,685, , ,000 Total by Program 843, ,000 1,685, , ,000 Program Q - Operating E. Goods and Services -8,000-8,000-16,000-8,000-8,000 Total by Program -8,000-8,000-16,000-8,000-8,000 Program S - Operating E. Goods and Services 8,000 7,000 15,000 7,000 8,000 Total by Program 8,000 7,000 15,000 7,000 8,000 Program T - Operating E. Goods and Services 6,000 5,000 11,000 5,000 6,000 Total by Program 6,000 5,000 11,000 5,000 6,000 Program V - Operating E. Goods and Services 1,000 2,000 3,000 1,000 2,000 Total by Program 1,000 2,000 3,000 1,000 2,000 Program X - Operating E. Goods and Services 6,000 6,000 12,000 6,000 6,000 Total by Program 6,000 6,000 12,000 6,000 6,000 Program Y - Operating E. Goods and Services 8,000 7,000 15,000 7,000 8,000 Total by Program 8,000 7,000 15,000 7,000 8,000 Program Z - Operating E. Goods and Services 9,000 9,000 18,000 9,000 9,000 Total by Program 9,000 9,000 18,000 9,000 9,000 Page 3 of 7

4 Package Description TEF is responsible for the acquisition and operating costs of about 6,500 vehicles and equipment of all types. Department programs use this equipment to operate and maintain the highway system and to support department activities. In the biennium, programs will use approximately 7.5 million gallons of fuel. As a nonappropriated, proprietary, internal service fund, TEF charges rent for the use of equipment. The rental rates paid by department programs include fuel costs; these rental rates will increase in the biennium because of higher fuel costs. The impact of increased TEF rental rates for capital programs is absorbed in the cost of capital projects. This package also requests an increase in TEF nonappropriated spending authority of $5 million for the increased purchase cost of fuel for the department and for fuel sold to other agencies. Narrative Justification and Impact What specific performance outcomes does the agency expect? N/A Performance Measure Detail N/A Identify important connections or impacts related to this proposal. This decision package is a technical adjustment to reflect expected fuel prices and consumption and does not change planned activities or services. What alternatives were explored, and why was this alternative chosen? The department has instituted the following fuel conservation measures: 1) A "no idle" policy that requires vehicle operators to turn off engines prior to leaving vehicles; 2) Using energy-efficient LED lighting on equipment when possible; 3) Teaching driving techniques that conserve fuel; 4) Keeping equipment operating at peak efficiency; and 5) purchasing new equipment and updating existing equipment with fuel-saving technology when possible. TEF s vehicles and equipment are essential to accomplishing the department s mission of operating and maintaining the state s highways. Other than ongoing efforts to reduce consumption, the alternative would be to defer replacement of worn-out equipment, using those resources to pay higher fuel costs instead. The alternative of requesting additional appropriation authority was chosen in order to avoid further exacerbating the backlog of equipment replacement needs and to maintain current levels of service. What are the consequences of not funding this request? TEF would have to reduce expenditures to replace worn-out equipment (increasing the current $92 million equipment replacement backlog), which would affect the capability of the department to perform its mission. Department programs would have to reduce their services, which also would affect accomplishment of the agency s mission. Page 4 of 7

5 Expenditure Calculations and Assumptions This request is based on the March 2017 fuel price forecast of the Transportation Revenue Forecast Council. The calculations also take into account actual consumption and prices through February 2017, the forecast of fuel consumption for March 2017 forward based on the prior two-year average for each forecasted month, including the changes in equipment rented by the programs which explains why some programs are showing increased rent, even while the price of fuel is going down. Department fuel costs are included in TEF rental rates. The forecasted change by program is shown in the following table. Capital programs I, P, and W are assumed to absorb the decrease in fuel costs into the cost of capital projects Change in TEF Equipment Rental Due to Fuel Based on the March 2017 Forecast Forecast Change in Equipment Rental Adjustment for Capital Programs Absorbing Change in Fuel Cost Change in Funding Needed Pgm. Description B Toll Oper.& Maint. ($13,000) $0 ($13,000) C Info. Tech. $0 $0 $0 D Facilities $77,000 $0 $77,000 F Aviation $4,000 $0 $4,000 H Pgm Delivery $46,000 $0 $46,000 I Improvements $35,000 ($35,000) $0 K Public/Private Partnership $10,000 $0 $10,000 M Highway Maint & Oper. $1,685,000 $0 $1,685,000 P Preservation $957,000 ($957,000) $0 Q Traffic Operations ($16,000) $0 ($16,000) S Trans. Mgmnt. $15,000 $0 $15,000 T Planning, Data, Rsrch. $11,000 $0 $11,000 V Public Transportation $3,000 $0 $3,000 W Ferries Construction $19,000 ($19,000) $0 X Ferries Operations $12,000 $0 $12,000 Y Rail Programs $15,000 $0 $15,000 Z Local Programs $18,000 $0 $18,000 Subtotal WSDOT $2,878,000 ($1,011,000) $1,867,000 Other Agencies $2,095,000 Total Program E $4,973,000 Page 5 of 7

6 The following table shows the assumptions for average prices, consumption by gallons and type of fuel, and the current budget for which represents the baseline budget compared to the March 2017 fuel cost forecast for Change in Estimated TEF Expenditures for Fuel from February 2016 to vember 2016 Forecast Current Budget Based on February 2016 Forecast WSDOT Other Agencies Total Program E FY 16 FY 17 Biennium FY 16 FY 17 Biennium FY 16 FY 17 Biennium Gasoline Gallons 1,216,184 1,237,319 2,453,503 3,085,118 3,124,411 6,209,529 4,301,302 4,361,730 8,663,032 Price Per Gallon $ $ $ $ $ $ $ $ $ Total Unleaded $2,861,000 $2,939,000 $5,800,000 $7,062,000 $7,420,000 $14,482,000 $9,923,000 $10,359,000 $20,282,000 Diesel Gallons 2,381,133 2,278,309 4,659, , , ,531 2,670,966 2,567,007 5,237,973 Price Per Gallon $ $ $ $ $ $ $ $ $ Total Straight Diesel $5,842,000 $6,181,000 $12,023,000 $712,000 $783,000 $1,495,000 $6,554,000 $6,964,000 $13,518,000 Total Gas & Diesel Gallons 3,597,317 3,515,628 7,112,945 3,374,951 3,413,109 6,788,060 6,972,268 6,928,737 13,901,005 Dollars $8,703,000 $9,120,000 $17,823,000 $7,774,000 $8,203,000 $15,977,000 $16,477,000 $17,323,000 $33,800,000 Forecast for Based on March 2017 Fuel Forecast WSDOT Other Agencies Total Program E FY 18 FY 19 Biennium FY 18 FY 19 Biennium FY 18 FY 19 Biennium Gasoline Gallons 1,241,198 1,243,238 2,484,436 2,998,914 2,981,387 5,980,301 4,240,112 4,224,625 8,464,737 Price Per Gallon $ $ $ $ $ $ $ $ $ Total Unleaded $3,391,000 $3,500,000 $6,891,000 $8,194,000 $8,392,000 $16,586,000 $11,585,000 $11,892,000 $23,477,000 Diesel Gallons 2,477,046 2,536,878 5,013, , , ,345 2,749,236 2,804,033 5,553,269 Price Per Gallon $ $ $ $ $ $ $ $ $ Total Diesel $6,851,000 $6,959,000 $13,810,000 $753,000 $733,000 $1,486,000 $7,604,000 $7,692,000 $15,296,000 Total Gas & Diesel Gallons 3,718,244 3,780,116 7,498,360 3,271,104 3,248,542 6,519,646 6,989,348 7,028,658 14,018,006 Dollars $10,242,000 $10,459,000 $20,701,000 $8,947,000 $9,125,000 $18,072,000 $19,189,000 $19,584,000 $38,773,000 Change From February 2016 Forecast for to March 2017 Forecast for WSDOT Other Agencies Total Program E FY 18 FY 19 Biennium FY 18 FY 19 Biennium FY 18 FY 19 Biennium Gasoline Gallons 25,014 5,919 30,933 (86,204) (143,024) (229,228) (61,190) (137,105) (198,295) Price Per Gallon $ $ $ $ $ $ $ $ $ Total Unleaded $530,000 $561,000 $1,091,000 $1,132,000 $972,000 $2,104,000 $1,662,000 $1,533,000 $3,195,000 Diesel Gallons 95, , ,482 (17,643) (21,543) (39,186) 78, , ,296 Price Per Gallon $ $ $ $ $ $ $ $ $ Total Diesel $1,009,000 $778,000 $1,787,000 $41,000 ($50,000) ($9,000) $1,050,000 $728,000 $1,778,000 Total Gas & Diesel Gallons 120, , ,415 (103,847) (164,567) (268,414) 17,080 99, ,001 Dollars $1,539,000 $1,339,000 $2,878,000 $1,173,000 $922,000 $2,095,000 $2,712,000 $2,261,000 $4,973,000 Page 6 of 7

7 Which costs and functions are one-time versus ongoing? What are the budget impacts in future biennia? Fuel cost increases are expected to be ongoing. Page 7 of 7

8 Addendum for WSDOT Decision Package Decision Package Code and Title: Base Budget: The current biennium budget, enacted in the 2016 legislative session, was based on the February 2016 price forecast, and assumed the department s appropriated programs would spend $17,823,000 for gas and diesel fuel (excluding ferry vessel fuel). The February 2016 forecast also projected purchases on the part of other agencies to total $15,977,000. Altogether, the TEF program was budgeted to spend $33,800,000 in nonappropriated Transportation Equipment Funds for fuel. What are other important connections or impacts related to this proposal? Impact(s) To: Identify / Explanation Regional/County impacts? Identify: Other local gov t impacts? Identify: Tribal gov t impacts? Identify: Other state agency impacts? Yes The TEF program, in addition to providing fuel to other WSDOT programs, sells fuel to other state agencies, with the largest external customer being the WSP. Responds to specific task force, report, mandate, or exec order? Does request contain a compensation change? Does request require a change to a collective bargaining agreement? Facility/workplace needs or impacts? Identify: Identify: Identify: Identify: Capital Budget impacts? Identify:

9 Is change required to existing statutes, rules or contracts? Is the request related to or a result of litigation? Identify: Identify lawsuit (please consult with Attorney General s Office): Is the request related to Puget Sound recovery? If yes, see budget instructions Section 14.4 for additional instructions Identify other important connections N/A Please provide a detailed discussion of connections/impacts identified above. Information technology: Does this Decision Package include funding for any IT-related costs, including hardware, software, services (including cloud-based services), contracts or IT staff? Yes Continue to IT Addendum and follow the directions on the bottom of the addendum to meet requirements for OCIO review.)

10 IT Addendum Part 1: Itemized IT Costs Please itemize any IT-related costs, including hardware, software, services (including cloud-based services), contracts (including professional services, quality assurance, and independent verification and validation), or IT staff. Be as specific as you can. (See chapter 12.1 of the operating budget instructions for guidance on what counts as IT-related costs ) Information Technology items in this DP (insert rows as required) FY 2018 FY 2019 FY 2020 FY 2021 Item 1 0,000 0,000 0,000 0,000 Item 2 0,000 0,000 0,000 0,000 Total Cost Enter Sum Enter Sum Enter Sum Enter Sum Part 2: Identifying IT Projects If the investment proposed in the decision package is the development or acquisition of an IT project/system, or is an enhancement to or modification of an existing IT project/system, it will also be reviewed and ranked by the OCIO as required by RCW The answers to the three questions below will help OFM and the OCIO determine whether this decision package is, or enhances/modifies, an IT project: 1. Does this decision package fund the development or acquisition of a Yes new or enhanced software or hardware system or service? 2. Does this decision package fund the acquisition or enhancements Yes of any agency data centers? (See OCIO Policy 184 for definition.) 3. Does this decision package fund the continuation of a project that Yes is, or will be, under OCIO oversight? (See OCIO Policy 121.) If you answered yes to any of these questions, you must complete a concept review with the OCIO before submitting your budget request. Refer to chapter 12.2 of the operating budget instructions for more information.