Utah County public works director warns fuel, materials surge could force midyear cuts; $250,000 shortfall possible

Richard Nelson, Utah County Public Works Director, told the commission at its regular meeting that construction materials and fuel have climbed substantially this year and could require midyear budget adjustments. "If prices hold where they are right now, we're gonna need about another $250,000 to get through the end of the year," Nelson said.

Nelson said asphalt costs were "up about 32%" compared with the prior year and that diesel prices had risen "about 72%" in the period he cited. He gave specific retail and wholesale price examples, saying diesel moved from about $4.25 in April to $4.72 and that the county purchased a load of gasoline at $4.33 after a price of $3.61 earlier in the year. Nelson also reported a roughly 39% increase in gasoline and a roughly 9.4% increase in the cost of patrol vehicles the county purchases annually.

The numbers, Nelson said, extend beyond fuel: road chip oil, road base and building materials such as sheetrock and wiring are running "a little over 21%" higher than last year. Seasonal-hire pay has risen from about $11 an hour to roughly $13.13, he said, which in turn pressures the county’s ability to recruit and retain staff when private-sector wages are higher.

Commissioners responded that the figures mirror wider inflationary trends and flagged two budget implications: first, a potential need for midyear adjustments if price trends continue; and second, a planning assumption that the 2023 budget request could be about "10% higher" than 2022 to maintain current service levels. One commissioner warned that higher pump prices could reduce driving and therefore lower gas-tax receipts because county road funds are funded by a fixed cents-per-gallon tax.

Nelson described options staff would use if costs remain high: scaling back project scope for 2022 to stay within the adopted budget, rolling some projects into future years and working with the budget team to identify alternative funding sources. He said some larger projects would return to the commission for discussion if staff seek additional outside funding.

Next steps: staff will monitor prices and bring midyear budget amendments or scope adjustments to the commission if projections materially change.