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CATA Prepares for Budget Squeeze From Rising Natural Gas Prices

Posted on: Monday, 24 October 2005, 21:00 CDT

By Jennifer Thomas, The Centre Daily Times, State College, Pa.

Oct. 23--The Centre Area Transportation Authority could face more than $300,000 in unbudgeted costs if compressed natural gas prices remain at their current levels, the authority director said.

The news comes just months after CATA completed a 12-year program that transitioned its fleet to the alternative fuel source.

"It's more disheartening than anything," said Executive Director Hugh Mose, who remained optimistic that costs will go back down in the spring as homeowners' demand for natural gas decreases.

Those unbudgeted costs would put CATA 4 percent over its $7.6 million budget for the year.

"This is the first time it's been this dramatic," Mose said. "A year ago, it was cheaper to use natural gas. Now, it's more expensive."

Mose doesn't anticipate fare increases or further service cuts, but he said those possibilities and the increased fuel costs may come up during next year's budget talks. CATA's budget year ends June 30.

"Taking the long view, the price of fuel is going to very likely make our next fare increase occur sooner than later," he said.

The cost of a thousand cubic feet (mcf) of natural gas is $13.91 for October, up more than $3 from September and $6 from August. Gas for November was purchased for slightly less than $12.88 per mcf.

"That's still unbelievably high in historical terms," Mose said. "We don't believe we're ever going to see $3 per mcf natural gas again."

The authority purchases about 5,500 mcfs monthly during the school year.

The cost is $8.76 more per thousand cubic foot than it was in October 2004. That's more than double the figure used to calculate this year's fuel budget.

CATA's overall budget was passed after hesitation from participating municipalities that had pushed for a change in the way their contributions are calculated. It also contained cutbacks to the X Route in Bellefonte.

The potential to miss budget by $300,000 is a concern, but it's not completely unexpected, according to College Township Manager Adam Brumbaugh. He said he's seen the increased costs for fuel and oil for the township and would expect a similar situation for CATA.

"Obviously you're talking about another entire year's worth of funding for CATA (from the Centre Region Council of Government municipalities)," he said. "The word 'ouch' comes to mind, but again, that's pretty obvious."

Increased ridership should help offset costs, Mose said. But he doubted whether that will come close to covering the higher fuel costs.

The federal transportation authorization bill provided extra funds that will be used to offset the fuel costs, Mose said. However, the costs will put a damper on CATA's hopes of expanding coverage areas and restoring routes, he said.

"It's just something we will have to absorb somehow," he said. "It's discouraging, but we'll deal with it like we dealt with everything else."

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Copyright (c) 2005, The Centre Daily Times, State College, Pa.

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Source: Centre Daily Times (State College, Pa.)

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