School districts face high fuel prices, as do other motorists in the Valley.
While some districts have locked in costs, some officials anticipate higher fuel expenses in the future.
In Midd-West, they spent $2.15 million on bus services in 2020-21 for regular and special education.
“Fuel costs are locked in, but honestly it’s having a huge impact on our contractors,” said Midd-West Superintendent Joe Stroup, whose district is contracted to Weikel and Spade, of Selinsgrove. “They base their quotes on reasonable fuel cost estimates. When prices exceed these reasonable estimates such as the climate we currently find ourselves in, it has huge negative results for bus companies.
One would expect bus companies to need to raise their prices in future contracts to keep pace with those prices, Stroup said.
“Additionally, there are severe shortages of bus drivers, so ultimately the cost of providing transport services to school children will increase,” he said. “We will have to meet these increased costs in the future in our own school district budget.”
The Shikellamy School District is under contract with Amity Leasing for its bus services. They spent $1,779,901.12 in 2020-21, which includes all extracurricular and athletic runs.
“The district does not have a fuel escalation clause as part of its contract,” Superintendent Dr. Jason Bendle said. “Fuel increases only impact the district for activity runs.”
The district is planning various increases in the budget based on long-term planning of all kinds of items, he said. These include, but are not limited to: facilities, special education, transportation, labor costs, and public school employee retirement system costs, to name a few. some.
Derrek Fink, business manager for the Milton Area School District, said the district contracts with Hackenberg Buses Inc., of Danville. In 2020-21, the district paid $1,309,283. To date, for ’21-’22, they have paid $1,189,333 and projected $1.4 million for the year. They expect to end the year below that figure for transportation costs, he said.
“We have a fuel escalation clause in our contract: excess fuel costs must be paid by the district,” Fink said. “To determine the excess cost of fuel to be paid by the school district, the current average cost of fuel paid by the contractor shall be compared to the base cost per gallon (baseline) established for the current service year. school will be responsible for the difference between the actual costs per gallon paid by the contractor and the base cost.”
Fink said: “We determine the benchmark by obtaining the average cost of fuel over a three-year period using data secured from the Energy Information System for the Mid-Atlantic Area. An average cost of a gallon of fuel less appropriate taxes (for diesel and gasoline) will be determined using 36 months of data going back three years from July of the new school term plus 15%.
Fink said they continue to assess the district’s transportation costs each year by reviewing projected costs and historical expenses. They do not provide for additional transportation subsidy payments from the state, he said.
The Mifflinburg Area School District is under contract with Rohrer Bus, of Duncannon.
“The cost we pay for bus services is based on the Commonwealth of PA, Department of Education approved transportation formula for contracted bus services,” Superintendent Dan Lichtel said. “The formula provides the basis for payment to the contractor as well as the reimbursement we receive. Based on the current formula, the district is projecting a net cost of $500,000 for the 2021-22 school year. »
The district’s transportation contract has a fuel escalation clause that is compared to averages published by the US Energy Information Administration for the Mid-Atlantic region of the United States, Lichtel said.
“The established benchmark is 10 basis points above the monthly average for the Central Atlantic region,” he said. “When the cost per gallon exceeds the benchmark, the district bears the fuel cost.”
The district has an advantage in its contractual arrangement because it only pays its contractor based on the Department of Education’s formula, Lichtel said.
“The formula has a built-in freight cost index that adjusts for cost increases,” Lichtel said. “So while our costs may increase, future transportation indices will provide relief to the district in the form of a larger reimbursement based on actual costs.”
The Lewisburg-area school district is under contract with Rohrer, according to John Fairchild, director of administrative services.
“We spend about $1.2 million a year on bus service,” Fairchild said. “In our contract with Rohrer, they supply the fuel as part of the contract. However, there is an escalation clause that if fuel costs exceed the average cost of the last three years plus 15%, we pay them for that excess. So, in times of rising fuel prices, we reimburse them for that fuel cost overrun. »
The district’s payments to Rohrer are based on the state’s transportation formula, which is increasing year over year, he said.
“So we’re still budgeting for estimated incremental transportation costs for future years,” Fairchild said. “Hopefully, as the average fuel price catches up, there won’t be as many overruns in the future.”
Selinsgrove Superintendent Frank Jankowski said the district has contracts with Weikel Busing and HE Rohrer Inc for $1.7 million.
“The contractor pays for the fuel,” Jankowski said. “However, when costs exceed a predetermined price per gallon, the district shares in the cost increase. Fuel charges are capped at a percentage of the total contract price.
The district’s annual contract increases are based on increases in student transportation costs from the Pennsylvania Department of Education, he said.
“This cost index increases by 7% next year,” Jankowski said. “This increase is incorporated into the district’s 2022-23 operating budget with an estimated reserve for fuel costs.”