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St. Mary’s County finance staff recommends $1.086 million fuel baseline; commissioners agree
Summary
County finance staff told commissioners rising market fuel costs and contract clauses require an increase to the FY2023 fuel baseline. Commissioners agreed to keep $1,086,000 in the budget and directed vehicle purchases be funded from fund balance rather than exempt financing.
County finance staff told St. Mary’s County commissioners on March 8 that recent market moves and supplier contract clauses justify increasing next year’s fuel budget by $1,086,000.
The increase, presented by Jeanette Cudmore, the county’s finance director, reflects rapid jumps in retail and contract fuel prices since departments prepared their budget requests in January. “We started off with a fund balance of $25,000,000 that you can use,” Cudmore said while summarizing available resources and the proposed baseline changes. She told the board she updated fuel accounts to reflect March 1 contract pricing and Maryland averages included in the reference materials.
Cudmore and Deputy Finance Director Jody Quasney described the technical drivers: supplier delivered-heating fuel rose from about $1.90 last year to $3.17 in January, retail gasoline reached $4.19–$4.49 per gallon in local stations, and contract language can allow vendors to issue notices and renegotiate within 60 days. Cudmore said she increased the county’s auto fuel baseline to $838,000 and heating fuel to $248,000 and recommended keeping a combined $1,086,000 in the FY2023 baseline for fuel.
Commissioners discussed alternatives including using ARPA funds and fund balance. Some commissioners cautioned that ARPA is largely already allocated and preferred preserving it for one-time uses. Commissioner Morgan (surname used as in transcript) suggested rounding the figure to $1,000,000 as a simple contingency; commissioners ultimately reached consensus to keep the $1,086,000 baseline Cudmore proposed. Cudmore noted if prices moderate the board could later sweep unused amounts back to the commissioners’ emergency reserve.
On vehicle financing, staff recommended removing vehicles from exempt (financing) schedules and paying outright from fund balance to avoid increasing operating costs with annual lease payments. Commissioners instructed finance staff to amend the package so vehicle purchases (about 40 vehicles totaling roughly $3.6 million in the package) would be funded from fund balance rather than included in exempt financing. Quasney confirmed the 5-year annual payment shown in the draft (about $828,000) would be reduced if vehicles are purchased outright.
Why it matters: fuel-cost increases and vehicle financing choices affect recurring operating costs and the county’s ability to use one-time ARPA or fund-balance dollars for capital needs. Commissioners said they want to preserve ARPA for nonrecurring priorities and use operating/fund-balance tools to absorb volatile commodity costs.
Looking ahead, finance staff will bring updated payroll and department-level fuel breakout figures back to the commissioners in the next work session and will restore any unused contingency to reserves if market conditions permit.
