Jun 3 - McClatchy-Tribune Regional News - Vanessa Fultz Suwannee Democrat, Live Oak, Fla.

Rising fuel costs could drive utility prices higher in Live Oak, city officials said Tuesday. City Administrator Bob Farley said cuts to some city services were also possible. The assessment came during preliminary discussions of next year's city budget.

Farley and Finance Director Jan Parkhurst presented a list of possible cuts Tuesday for the city council to consider while preparing for fiscal year 2008-09. Among them were suggestions to raise rates for water, sewer, gas, garbage and storm water fees. Other proposed cuts include eliminating merit raises for staff, raising the deductible on employees' health plan and disallowing the use of take home vehicles for public works employees who are on call.

"I think we ought to take and not allow anyone to drive city vehicles home," said Councilman Don Boyette. "When we allowed this we were spending less than $2 per gallon for fuel and right now it's over $4."

Farley noted the cost of living has risen 4.2 percent over the last 12 months and energy costs have risen 16.8 percent.

Though the city budgeted $4 per gallon for gas for city vehicles last year in anticipation of price hikes, more cuts are needed.

"Our rates are not going to cover the expense of trucks driving around town five days a week," Parkhurst said. "It's just not going to happen."

Parkhurst said Wednesday that enterprise funds -- water, sewer, gas, garbage and storm water fees -- are self-funded and also contribute to the city's general fund. Enterprise fund contributions -- which made up $2.1 million of this year's $5 million budget -- pay for police and fire/rescue services, the finance department and city administration.

To compensate for the rise in fuel costs the city has already put various projects and purchases on hold.

Councilman Mark Stewart was concerned about keeping certain projects on the back burner, such as the purchase for the sewer department of a pumping unit, which is used to clean out small sewer lines.

Public Works Director Todd Hunt said the unit currently used to clean out such lines needs to be replaced due to age.

"We can't keep putting everything off," Stewart said.

"A lot of people are on a fixed income," said Councilman Bennie Thomas. "You have to be careful with spending."

"If we don't keep water and sewer up it's a great disservice to the people," Stewart said.

Farley said his staff would prioritize the importance of such expenditures.

The city council will begin further discussion of the budget in July and will hold two public hearings in August and September before they set the fiscal year 2008-09 budget. The budget will go into effect Oct. 1.