ANNAPOLIS – With temperatures dropping and energy costs soaring, Maryland school officials are worried that money will have to be transferred from academic areas to compensate for increased spending on oil and gas.
“It’s not a very rosy picture — heading into the fall and the high-cost heating season,” said Allan Gorsuch, Eastern Shore of Maryland Education Consortium executive director.
“Schools may have to transfer funds from instruction to meet rising energy costs.”
The Eastern Shore consortium consists of nine school districts that forecasted increased energy costs and secured lower-priced contracts with suppliers before the school year began.
While these private contractors have escalation clauses in contracts to compensate them for rising prices, this year presents a price-soaring anomaly that makes compensation difficult.
“The 10 percent increase our districts put into the budget for energy this year is not enough,” said Gorsuch. “By the year’s end, we will be 30 percent above the budget in some areas.”
Consortium members and other Maryland school systems are trying to plan for price increases in a variety of ways.
Officials from Talbot County have only limited confidence in their contract. The district is paying $1.47 per gallon for heating oil and $1.57 per gallon for gasoline, said Charles Connolly, finance director.
“Compare that to pump prices and we are doing fairly well,” he said.
But he said school officials have to be particularly financially savvy in the current situation.
“In Talbot County we are always thinking where we could cut costs and remain at the position we are at now,” he said. “We want our money in the classrooms.”
For example, Caroline County, in the 1970’s, started its school days later in the day to save money on heating costs, he said.
In St. Mary’s County, less-severe adjustments are already being made.
“Maintenance van drivers are paired up to save money on gas,” said Jeff Sheckels, St. Mary’s County maintenance supervisor. “We are trying to limit usage without causing hardship within the schools.”
School officials are keeping their fingers crossed that more extreme measures won’t have to be taken and suppliers can continue to shoulder some of the financial burden.
Most counties, including Anne Arundel, Garrett, Howard, Somerset, Carroll and Montgomery, depend on contracts that last one year or longer, making price hikes less burdensome. But officials still worry that this year’s surge won’t be fully met by existing agreements.
“We are looking at rising fuel costs with increasing concern,” said Marshall C. Spatz, Montgomery County Public Schools budget and planning director.
While some of Montgomery County’s fuel and gas prices are locked in each year through a contract provider, prices still fluctuate daily. The $1.35 per gallon for diesel fuel the district currently pays is at stake.
And the $1.42 per gallon Anne Arundel spends on regular gas is subject to fluctuation, said Greg Nourse, Anne Arundel’s assistant superintendent.
If rates keep escalating, Montgomery County may “experience a several hundred thousand dollar increase in fuel costs during the current fiscal year,” said Spatz.
Washington County and Harford County could not secure long-standing contracts.
Each Monday, Harford officials hold their breath, waiting to see if they will again be hit by rising costs. And Washington’s administrators monitor costs month-to-month.
Each penny increase costs the schools $12,000 per year in transportation costs, said Jim Jewell, Harford County’s budget director.
At the end of the December, officials will readjust the budget and defer spending in other areas in order to compensate, said Jewell.
But Jewell, like others, can offer no explicit solutions.
“Chances are that with the predicted costs we will have to re-transfer the budget to meet that increase,” said Allen C. Brown, Wicomico County’s assistant superintendent.
The only way for districts to balance unexpected fluctuations is to go to the county for additional support or cut programs from other areas in the budget, said Gorsuch.
“The price of fuel oil is astronomical,” said Bernard Sadusky, Queen Anne’s County superintendent. “Hope we have a mild winter . . . got a crystal ball?”