LI districts feel pinch at pump, wary of fuel prices in fall
The Middle Country district’s annual fuel costs to transport students had soared 75%, to nearly $780,000, by the end of this past school year. In Southampton, district administrators had to transfer about $50,000 within budgets to cover higher fuel costs for their buses. And in Lawrence, school leaders have been trying to assist contract bus companies with their fuel costs.
Long Island districts and bus providers have been feeling the pinch of skyrocketing diesel prices, due in part to Russia's invasion of Ukraine, supply-chain backups and a lack of refinery capacity. School officials are hoping prices will ease up before the start of the 2022-23 school year.
"It's something we have never seen before," said Corey Muirhead, executive vice president of Oceanside-based Guardian Bus Co. "Companies just got out of COVID, and then you had the [bus] driver shortage. A lot of the contractors are saying, 'When are the punches going to stop?' "
Diesel was as low as $2.21 a gallon to start the 2021-22 school year, before spiking to a high of $6.13 during the week of May 14, a 177% increase, said Muirhead, past president of the New York School Bus Contractors Association. Some large school buses can hold 100 gallons.
WHAT TO KNOW
- As districts prepare routes for the coming school year, Long Island school systems and bus companies have been feeling the pinch at the gas pump.
- Districts set their budgets in the spring, which makes it difficult to accurately estimate how much fuel prices will rise in this market.
- Some of Long Island's 124 school districts run their own bus fleet, some contract out with private companies, and some operate a mix of the two.
Corey Muirhead, past president of the New York School Bus Contractors Association, said the high fuel prices are "something we have never seen before." Credit: Newsday / Alejandra Villa Loarca
Districts set their budgets in the spring, which makes it difficult to accurately estimate how much fuel prices will rise. School administrators and bus companies already had dealt with driver shortages to start last school year, and consolidated some bus routes while looking for efficiencies and ways to save money.
Some of the Island's 124 school districts run their own fleet, some contract out with private companies, and some operate a mix of the two. Districts are required to bus not only public but also private school students. Some contracts with private operators include an adjustment for fuel costs; others do not.
The Lawrence district, in Nassau County, contracts with several bus providers to transport about 6,000 children.The district does not have a fuel adjustment built into its contracts, and has heard from the bus operators that they are struggling. Transportation costs have risen $30,000 to $50,000 a month, Lawrence officials said.
"The real significant hit has been to bus companies themselves, and so we acknowledged that. … We want to support them," Superintendent Ann Pedersen said. "We have consulted with the state, and our board of education is behind doing an amendment that would help them cover the increased costs.
"But the challenge becomes: As a school district, this is an unexpected expense for us."
Lawrence schools Superintendent Ann Pedersen stands outside Lawrence High School, which runs a summer program where buses arrive to pick up children in Cedarhurst. Credit: Debbie Egan-Chin
Muirhead's company serves 15 districts on the South Shore in Nassau.
"In September, you have a driver shortage, so your business is already depleted," he said. "Come into the new year, there is an unprecedented oil price hike like you have never seen — and the combination is nearly almost as challenging as it was figuring out how to get through COVID."
Oil prices have "increased so drastically, so quickly [that] contractors haven’t even had time to react with an informed business decision," Muirhead said.
Robert Lowry, deputy director of the New York State Council of School Superintendents Association, said transportation costs for 2021-22 were locked in by contracts before inflation really hit, so there likely will be a bigger and wider impact in the fiscal year that started July 1.
Muirhead said diesel prices ended the school year at about $5.50 a gallon, $3 more a gallon than when school began. "As far as returning in the fall, if oil is at about $80 or $90 a barrel — we can expect $4 a gallon," he said.
Gas prices have eased a bit recently, falling for four straight weeks nationally, according to GasBuddy, a Boston-based technology company that provides fuel price data.
As part of its regional transportation system, Eastern Suffolk BOCES transported 3,900 students daily from home to school and back in 2021-22 to more than 100 schools, covering about 5,000 miles per day, according to Ryan Ruf, chief operating officer for Eastern BOCES.
Eastern BOCES recently learned that two of the three companies it contracts with cannot provide that service going forward. Eastern BOCES, which serves more than 50 districts, budgets a year ahead due to the complex nature of its transportation routes.
"Two companies said: 'I can't keep the business at this price,' " Ruf said, adding that Eastern BOCES will be seeking requests for proposals for those routes and expects them to be "considerably higher because of what has happened with the fuel and labor costs."
In Suffolk County's Middle Country district, annual fuel costs jumped from $445,000 in 2020-21 to close to $780,000 for 2021-22, said Beth Rella, assistant superintendent for business. The district, which enrolls about 9,600 students, contracts with a private company and uses some of its own fleet. A small portion of the costs also cover fuel used in district operations such as landscaping.
The biggest increases came in the last quarter of the school year, which ended June 30.
"There's only so much you can plan. You can plan for an increase or a projected increase, but you can't plan with astronomical increases," Rella said. "Once we started seeing the fast rise in prices, we began looking at next year to see what the potential impact would be."
In Southampton, gas for the bus fleet rose 40% in one year, and for the diesel buses, that price went up 50% in a year's time.
$50,000 Additional amount the Southampton school district had to budget to cover transportation for the school year that just ended, from $100,000 to $150,000 for fuel costs alone
The district, which runs its own fleet of buses and enrolls 1,389 students, had to budget $50,000 more for transportation for the school year that just ended, from $100,000 to $150,000 for fuel costs alone.
"We depleted the budget allocated for fueling our buses by early spring of the past school year," said Jean Mingot, the district's assistant superintendent for business. "I am always concerned any time we have price increases that weren’t projected in the appropriated budget, and … this past year, fuel prices were not the only area where there was stress on the budget.
"With inflation hovering around 8 percent to 9 percent, this inflationary pressure has an impact on everything that we procure for the district."
Patrick De Haan, head of petroleum analysis at GasBuddy, said pricing is hard to predict for 2022-23.
"It's hard to think of an environment where they would pay more down the road, but again anything is possible," he said, adding he's concerned a hurricane in the Gulf of Mexico could send prices soaring again. An economic slowdown could help prices fall, he said.
There's "a very high amount of uncertainty," De Haan added.
Joie Tyrrell is a Long Island native and covers education for Newsday, where she has worked since 1998.
