Soaring fuel costs threaten school budgets
By Robert Brumfield, Assistant Editor, eSchool News
September 12, 2005
The fuel panic that ensued after Hurricane Katrina interrupted oil production and transportation in the Gulf Coast region has heightened concerns over rising fuel costs that already had existed before the storm. These soaring costs have put a serious strain on school budgets, prompting school leaders to examine ways they can save.
On Friday, average gas prices in the U.S. were $3.03 per gallon, according to the American Automobile Association. Fuel prices that already were hitting record highs this time last year have increased by as much as 50 percent in some areas.
Many districts have taken steps aimed at addressing the habits of school bus drivers, such as setting policies that forbid the idling of buses while warming up or waiting for students. Schools also are canceling or reducing the number of routes they run, decentralizing district garages, combining pick-up points for students, canceling transportation to extra-curricular events such as football games--and canceling most field trips altogether.
Technology also is playing a part in these efforts, with some schools using geographic information system (GIS) software to better plan bus routes, as well as programs that help with inventories and preventive maintenance for the buses themselves. Some districts also are supplementing petroleum-based fuel products with those refined from biological materials. Although these biodiesel fuels are intended primarily to reduce toxic gases released into the atmosphere, many users are reporting cost savings on biodiesel fuel when compared with traditional fuel costs in the present economic climate.
Lucas Conrad, treasurer of Cabell County Schools in West Virginia, said the long-term effects of the fuel crisis are uncertain.
"Of course, we are concerned about the initial cost of the fuel for the purposes of transporting students," Conrad said. "But we just do not know yet what the far-reaching effects of pricing [increases] will be."
He noted: "Heating costs will increase. The prices for textbook and food deliveries, the cost of running our own maintenance vehicles, those will increase, too. The vendors we work with, we know their costs are going to go up for the same reasons." In short, rising fuel costs impact nearly every facet of school district budgets.
Conrad said that, for the current year, his district will use contingency monies to cover the increased costs. But he said in future years "something will have to give."
"Some programs we are now supporting will have to shrink," he said. "In simple terms, there's only so much money available."
Dan Roberts, director of transportation for the Round Rock Independent School District in Texas, revealed just how much his district's diesel fuel bills have increased in the past three years. According to Roberts, his district was paying 97 cents a gallon on average for diesel fuel in the 2003-04 school year. He saw that increase to $1.58 a gallon for the 2004-05 school year.
"My most recent [purchase] was for $2.47 a gallon," Roberts said. "[Last spring,] I budgeted $2 a gallon for this school year. Yet it's $2.47 right now, and the school year has just begun."
Software and behavioral solutions
Schools have begun to cut back on fuel costs in a number of different ways.
Terry Simpson, transportation director for Georgia's Floyd County School District, said the total annual fuel budget in his small district is $250,000. That budget has increased by one-quarter since the last academic year.
Floyd County already has been forced to give up all unnecessary field trips, and also has forbidden drivers from allowing their buses to idle. But Simpson said he does not yet know how much money his district has saved by implementing those changes.
Round Rock's Roberts said his department has used a combination of software programs to help cut costs: GIS software from Transfinder Inc. to redesign bus routes for greater route efficiency, and fleet maintenance software from Versatrans Solutions for inventory, preventive maintenance, and better fuel efficiency.
"The Transfinder GIS routing software gives us a graphical interface to analyze route structures," Roberts said. "It allows us to create a system that requires students to walk farther to more remote bus stops. It permits us to rewrite the routes daily, based on ridership, moving the stops to minimize the route and maximize the vehicle's capacity."
Roberts said his district uses the software to change 10 percent of its bus routes per week, depending on ridership. Though this might sound like a logistical nightmare, student demographics in Round Rock are in constant flux owing to an annual growth rate of about 1,000 students, and Roberts says the cost savings that ensue make it more than worthwhile.
The Transfinder software creates a visual representation of where students live and allows Roberts to constantly adjust routes to pick up the maximum number of passengers within any given half-mile area, which is the farthest distance his district is legally allowed to ask its students to walk.
"We make kids walk as far as we can to eliminate bus miles," he said. "We keep rerouting, restacking, making the routes tighter and tighter."
Hard copies of the new bus routes are handed out to students daily, and the information is posted on the district's web site for students and parents to see.
Roberts said his district uses routing software in tandem with the Versatrans software, which allows the district to schedule preventive maintenance, track component warranties, track fuel and part inventories, monitor fuel usage, complete work orders, and perform the administrative tasks involved in managing its bus fleet.
This innovative approach to student transportation management--the just-in-time routing element is still an especially rare practice that Roberts teaches to colleagues at seminars nationwide--reportedly has saved his district more than $5 million in five years.
According to Roberts, a typical district adding students at a rate of 1,000 per year would have to have added 80 new buses in five years. Round Rock has purchased only 20. With new buses costing upwards of $75,000 apiece, that's an estimated savings of $4.5 million right there.
In addition, every bus route has a maintenance cost of $40,000 per year, which adds up to a further savings of $240,000 on the buses it didn't have to buy. The cost of additional staff members and other logistical expenses also are avoided.
"The bottom line is, we send money back to the state, rather than [the state] giving us dollars," Roberts said.
Biodiesel fuel
Floyd County's Simpson says his district has found savings by combining behavioral modifications and the use of alternative fuel.
Simpson's small district has saved money by using biodiesel fuel, which is made through a refining process that takes animal fat or vegetable oil and turns it into fuel that can be used in diesel engines, usually with no modifications.
Simpson said he has begun to save money on the blend of biodiesel fuel he buys locally, which is 20 percent biodiesel and 80 percent regular diesel.
"I was saving five cents a gallon as of three weeks ago. Our shipments are 7,500 gallons, or a tankerload each week," Simpson said. That means Simpson's district has saved a modest $375 per week over the last three weeks when compared with the price of straight diesel fuel.
Floyd County picks the lowest price each week from three different vendors for each tanker delivery.
"Our last shipment cost us $2.22 a gallon," he said. "Last year at this time, I was paying $1.20 to $1.25."
As part of its 2004 energy plan, the federal government made tax provisions for biodiesel use that have been extended into 2008 with the Bush administration's latest plan. The plan offers a $1-per-gallon tax credit for using biodiesel fuel to mix with regular diesel, which Simpson and others have no doubt ridden to savings in the current economic climate--for as long as such a strategy can last.
According to David Shifflet, a representative for Enterprise Products Partners LP, an oil distributor that represents the Georgia-based US Biodiesel Inc., the up-front cost isn't the reason people should gravitate toward biodiesel.
"It is an alternative fuel, not an alternative price," Shifflet said. "A lot of people tend to focus on the immediate cost. Right now, with diesel and crude up like they are, the biodiesel part is attractive. There is an up-front cost savings for the blend right now. [But] we all hope [fuel] comes back down to a normal or bearable price."
If that were to happen, "instead of [biodiesel] being a penny or two cheaper, it would be a penny or two higher," Shifflet said. "That's why you have to look at the cost benefit on the back end."
Shifflet said those savings might include minor miles-per-gallon improvements; back-end savings on vehicle maintenance; environmental savings on pollution, which affects health and energy costs; and relaxed demand on the petroleum-based market, resulting in lower oil prices.
But not everyone agrees that biodiesel fuel is even good for a district's equipment.
Allan Jones, director of pupil transportation for the state of Washington, said his department piloted a biodiesel program in two districts for ecological purposes, as opposed to financial ones. The two-year program took place during the 2003-04 academic year, and then was revisited in 2004-05, resulting in reported reductions of toxic emissions by as much as 30 percent compared with street-diesel levels.
"One district [Central Valley School District] noted a small increase in fuel economy. But this wasn't a controlled test," Jones said. "You can't use our results to evaluate fuel economy."
At the same time, Jones explained, "we were emphasizing to our drivers that they should reduce idling. If you reduce idling, you're going to affect fuel economy. If you're doing that at the same time you're doing this pilot project, there isn't any way you're going to be able to say where the effect came from."
The other district that took part in the two-year pilot, North Shore School District, reported that the biodiesel fuel caused maintenance problems in its fleet.
Jeff Rembold, shop supervisor for the district, said North Shore tried a 20-percent biodiesel mixture on a number of different kinds of buses.
"I had a lot [of problems] with the biodiesel," Rembold said. "Maybe the mix was too heavy, I don't know."
He explained that his district "had a lot of trouble with the electronic diesel engines on the newer [bus] models." Those engines have what is known as a driver module, which includes computerized sensors that regulate the vehicle's functions--for instance, an electronic fuel pump, a map sensor, and so on.
"One of the sensors is an optic eye in the fuel pump. As [fuel] passes through, the sensor reads its color," Rembold said.
He explained that off-road diesel fuel is dyed red. Red diesel is used for construction equipment, and purchasers are not charged a fuel tax for road use. If used in a newer, computerized engine in a street vehicle, the sensor in the fuel tank detects the illegal fuel and causes the engine to turn off. The vehicle must be taken to a mechanic to be reactivated. When the user of the illegal fuel takes the broken vehicle in for repairs, shops that detect the red diesel are mandated by law to turn the vehicle's operator in to authorities for tax evasion.
Rembold said several of his driver modules malfunctioned at the time he was using biodiesel fuel. Speculating, he said he believes the color of the fuel might have caused the problems.
But he said the biggest problem he experienced was clogging of the fuel filters.
"I had other vehicles plugging filters just solid with a thick, black goo that collected in the filter. They wouldn't even start," he said. The biodiesel fuel also acts as a cleaning agent, which Rembold said corroded the linings in some fuel engines, leading to the clogging.
"The buses kept stalling out. My drivers kept asking me to change filters--they couldn't even make it up a hill," he said.
Rembold emphasized that he was speculating and possessed no measurable data to prove his suspicions: "I can't prove that my district had these problems because of the biodiesel. All I can say is, we didn't have them before."
Shifflet of Enterprise Oil said the problem with the color of the fuel might have resulted from the materials used to make the biodiesel mix that Rembold's school district used.
"Down here [in Georgia]," Shifflet said, "we use poultry fat, which seems to be a good feed stock for biodiesel. We make a beautiful product."
Regardless of what steps districts are taking to combat it, it's clear the growing fuel crisis is impacting school district budgets in all areas of operation.
"I'm already getting some bills in that have a delivery surcharge tacked onto them since Hurricane Katrina," Simpson said. "The one I saw was 1 percent on parts orders and other kinds of orders. That varies depending on the price of the items being delivered, but I expect those kinds of surcharges to continue and even increase."
Links:
Cabell County School System
http://boe.cabe.k12.wv.usRound Rock Independent School District
http://www.roundrockisd.org/home/index.aspFloyd County School District
http://www.floydboe.netTransfinder Inc.
http://transfinder.com/products/routing.aspVersatrans Solutions Inc.
http://www.versatrans.comEnterprise Product Partners LP
http://www.epplp.com---
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