Schools'
new fear: Growing fuel bills
Heating, transit costs worry more
districts
Wednesday, August 24, 2005 • BY SARA K. CLARKE •
Star-Ledger Staff
Skyrocketing fuel costs are likely to
take a financial toll on school districts throughout the
state when classes resume next month, as administrators will
be forced to rethink field trips and hope they've budgeted
enough to heat their buildings.
With the price of diesel fuel up nearly
75 cents a gallon from last September, Elizabeth officials
say gas bills for buses will rise more than $50,000 above
the $150,000 the district spent last year.
Private companies provide transportation
for most of the city's 25,000 students, and those
contractors absorb rising gas prices. Still, the prospect of
gassing up the 35 or so buses the district operates each day
has officials worried.
"We are already seeing about a 40 percent
increase of our fuel prices since early spring," said Harold
Kennedy, the district's business administrator. Most of that
money will be scraped from the district's bus maintenance
budget, he said.
"We tried to budget for rising prices,
but it is like when you fill up your own car. You don't
expect the prices to rise so high," he said.
In Toms River, officials expect to pay 20
percent more for gas this year. The school district's
transportation operation buses 14,000 students a day and
logs more than a million miles per year.
"It's really hard to get a handle on it,
because prices are fluctuating so much," Superintendent Mike
Ritacco said.
The financial pinch comes as schools are
working for the first time with reduced rainy day funds,
said Frank Belluscio, a spokesman for the New Jersey School
Boards Association. Under a new state law that takes effect
this year, schools can only maintain a 2 percent budgetary
surplus, down from 3 percent previously.
"If they're faced with spikes in fuel
costs mid-year, it could create cash flow problems,"
Belluscio said.
Higher diesel prices should last well
into the first two months of the school year, said Tom Kloza
of the Oil Price Information Service. The increase in prices
is due to increased global demand for diesel, along with a
robust U.S. economy in which shipping is up, Kloza
said.
"I'm sure when they left their offices
last May or June, they thought the worst of this year was
over," said Kloza, who noted that diesel prices usually peak
in the winter when heating oil demand puts a squeeze on
supplies.
Most school districts get a break on gas
taxes and are not paying at-the-pump prices, but districts
that paid between 85 and 95 cents per gallon of diesel just
two years ago are looking at $2.15 to $2.30 per gallon this
year, said Mike Martin, executive director of the National
Association for Pupil Transportation.
"The school districts have to find ways
to literally do more with less," he said.
The solutions include re-evaluating
services, scaling back extracurricular busing, and finding
ways to combine resources with other districts, Martin
said.
In severe situations, schools are
implementing transportation surcharges for parents who opt
for busing -- especially in California, where retail diesel
prices have topped $3 per gallon.
Some schools, however, have avoided the
tank-filling anxiety, at least for this year.
Bill Muzzio, assistant business
administrator for the Edison Board of Education, said the
district locked in rates for transportation contracts with
several busing companies in April for the 2005-06 school
year.
"Whatever costs they incur, they pay it,"
he said.
But the arrangements that keep schools
afloat are having a devastating effect on private industry,
said Mary Mazzocchi, executive director of the New Jersey
School Bus Owners Association.
Fuel price increases of 30 percent, and
busing contract increases capped by law at the Consumer
Price Index of about 3 percent, create a situation that
"unfortunately is killing the private contractor," Mazzocchi
said.
About 60 percent of busing services in
New Jersey are contracted to private companies, Belluscio
said.
As school begins, high gasoline prices is
just one of the obstacles facing administrators. Nationwide,
heating oil prices could increase as much as 17 percent this
winter.
The Caldwell/West Caldwell school
district is part of a buying cooperative for natural gas
with six other districts. The district's budget includes a
15 percent increase for heating costs this year.
"Given what I see in oil and what I've
heard, I think we're going to be well short," said Ron
Skopak, business administrator and board of education
secretary. "We were hoping things would die down for the
coming year, but it doesn't look like it has."
Energy costs in Newark public schools are
projected to hit $11 million this year, a lump sum that
includes costs for electricity, natural gas and fuel oil,
said Steve Morlino, executive director of facilities for the
school district.
The budget includes a cushion for
increases in cost and consumption.
Staff writers Chandra M. Hayslett and Joseph Ryan
contributed to this report.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
|