Friday, August 15, 2008

School district absorbs higher fuel costs

Board awards fuel bid to United Oil

Express Staff Writer

Express graphic by Coly McCauley- Rising diesel and gasoline costs have caused the Blaine County School District to exceed its fuel budget three years in a row. The district budgeted $300,000 for fuel this year, but whether that will be enough remains to be seen.

Fuel costs have risen dramatically during the past few years for the Blaine County School District's vehicle fleet, but the district has been able to take the higher costs in stride.

"It's just an added expense," said district Business Manager Mike Chatterton. "In the scheme of things, it's not a major part of our budget."

Price hikes for gasoline and diesel have caused the district to exceed its fuel budget three years in a row. The district budgeted $300,000 for fuel for Fiscal Year 2009, which started on July 1. Chatterton thinks it will be enough, but he can't be certain.

"When we were setting our budgets in April, we thought it was going to go even higher, but now that its coming down, who knows where it's going to end up?" he said.

It's sort of a guessing game, but a few hundred grand doesn't make much of a dent in the district's budget, which is about $70 million for 2009.

It's a cost the district keeps an eye on nonetheless.

On Tuesday the board of trustees awarded a 2009 fuel contract to United Oil in Hailey, the company that has provided fuel to the district's fleet of 39 buses and 24 service vehicles for the past several years.

United Oil was the only bidder. Under terms of the agreement, United Oil sells the fuel at its cost and is allowed to make an 8-cent profit on each gallon sold. The profit margin is only a penny higher per gallon than United Oil received from the school district in 2008.

The bid provided by United Oil shows that the district paid $3.69 per gallon for gasoline on July 1, $3.74 on July 15 and $3.67 on July 29.

Diesel costs show the same trend. The district paid $4.16 per gallon on July 1, $4.29 on July 15 and $4.22 on July 29.

The United Oil contract also has a provision for the purchase of B-5 biodiesel, a blend of diesel fuel and 5 percent vegetable oil. Biodiesel, however, is currently more expensive than regular diesel.

United Oil's bid listed a biodiesel price to the district of $4.29 on July 31, which was 7 cents higher than the price for diesel on the same date.

District Transportation Director Rex Squires told the school board that he may experiment with biodiesel this year to see how well the buses perform with it.

The bus fleet typically fills with fuel at the United Oil terminal in southeast Hailey. Chatterton said the district is considering installing fuel tanks at the bus parking area, not so much to save money but to cut down on traffic congestion in southeast Hailey.

So will $300,000 be enough to meet the district's fuel costs this year?

Past history says no.

In 2006 the district budgeted $138,000 for fuel and ended up spending $204,242. The deficit was smaller in 2007, when the district budgeted $188,000 and spent $198,441.

Last year the fuel budget was set at $203,000 and the district spent $269,433.

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