Several Fulton city departments may face budget cuts after a spike in natural gas prices put a dent in reserve funds.
Though natural gas prices are now down to their pre-polar vortex levels of around $2.60 a dekatherm, the four days Fulton spent paying $224.56 (Feb. 13-16), and one day at $129.39, cost the city around $3.2 million.
"The immediate crisis is over, but we're going to feel it for years to come," Fulton Mayor Lowe Cannell said. "The $3 million that we spent over the weekend was money that you could've just put in a burn barrel outside City Hall and lit it on fire. That's the way it made feel - it just made me sick."
The city spent an additional $170,000 on electricity during the crisis, which was caused by frigid temperatures freezing infrastructure and driving up demand.
Before the crisis, Fulton's natural gas reserves stood at $5 million. Now, they're down to $1.8 million.
Fulton administrators have found $1.55 million in potential budget cuts targeted at replenishing the natural gas fund and $200,000 for the electric fund. Administrators presented the potential solutions and gave an update on the situation during Tuesday's City Council meeting.
City Council members took no action Tuesday. Fulton Director of Administration Bill Johnson made it clear the plan is still in its early stages.
"I'd rather see things settle out a little bit," Ward 3 council member John Braun said. "I think it's too soon to have a knee-jerk reaction to adjusting anything at this point."
The proposed cuts come from multiple funds and largely involve cancellation of planned capital expenditures. For example, the electric department may have to give up on receiving its $250,000 60-foot bucket truck, and multiple streets around Fulton might not see planned overlays.
Johnson also filled City Council members in on the outcome of Monday's Fulton Utility Board meeting. Utility Board members unanimously approved a motion encouraging the City Council to be prepared to rebuild financial reserves in preparation for a similar event within the next three years.
Braun reacted with incredulity.
"It took us 10 years or better to get there, and we're going to restore it in three years?" he said.
Johnson pointed out the city lost those reserves in just four days - and a similar crisis could come at any time, as the Utility Board discussed.
Utility Board members also discussed a potential hike to consumer natural gas rates. Johnson estimated raising consumer prices by 10 cents per 100 cubic feet of natural gas - and putting that extra money directly into reserves - would raise approximately $2.1 million across three years. The average residential customer would pay an extra $26 a month, he said.
Discussion on the matter will continue at the next Fulton City Council meeting, scheduled at 6:30 p.m. March 9.
Federal officials are investigating the gas spike as potential price-gouging, Fulton Utilities Superintendent Darrell Dunlap said.
"Its Office of Enforcement is examining wholesale natural gas and electricity market activity during last week's extreme cold weather to determine if any market participants engaged in market manipulation or other violations," a Federal Energy Regulatory Commission news release announced Monday. "If the Office of Enforcement finds any potential wrongdoing that can be addressed under FERC's statutory authority, it will pursue those matters as non-public investigations."