Gas prices bust budgets

March 29, 2000

BY DAVE NEWBART SUBURBAN REPORTER

Across the Chicago area, public officials are adjusting budgets to cope with the highest gasoline prices on record.

Local government leaders report costs to run school buses, police cars and other vehicles have driven budgets up by as much as 20 percent.

Even though most government bodies pay fewer taxes and receive steep discounts by buying in bulk, most contracts still contain fuel "escalator" clauses.

Even some smaller governments that locked in lower fuel prices last year are preparing for price hikes when contracts are renegotiated this summer.

Among the hardest hit have been school districts, with fleets of diesel-powered buses lucky to get seven or eight miles a gallon.

The Chicago Public Schools will dole out an additional $1.3 million to more than 40 bus contractors Saturday to cover a 30-cents-a-gallon rise in fuel costs since the contract began last August, said Woody Fitzmaurice, head of the district's Bureau of Student Transportation. That's on top of the $82 million the district pays for 2,000 buses to run 2,600 routes.

"It's costing more money . . . like virtually every other school district in the country," Fitzmaurice said.

Gary Marx, transportation director for Palatine High School District 211, which covers 54 square miles, said his district already has had to deal with an 8 percent to 10 percent increase in the $295,000 it budgeted for fuel--about $25,000.

Bob Rutkoski, a district manager for Laidlaw Transit in Naperville, the largest school bus company in the United States, said even districts without fuel escalator clauses will feel the pinch in next year's contracts.

Already, some county and city governments are readjusting their budgets and dipping into contingency funds to meet the added costs.

Don Widick is director of purchasing for McHenry County and buys gasoline for the sheriff's, highway and other county departments. He expects to see a 10 percent increase in his $400,000 fuel budget.

Joliet's 2000 budget of $590,000 for vehicle supplies, including gas and oil, will likely run out by September, said Al Patterson, the city's purchasing contracts administrator.

"It's knocking the bottom out of it," he said.

The cost of street repairs has taken some by surprise. The Illinois Department of Transportation reports that bids coming in for roadwork show prices for asphalt have jumped from $120 a ton to as much as $190 a ton.

Higher prices for fuel and for asphalt, which is made from a byproduct of crude oil, along with a greater demand for contractors this season, prompted Hoffman Estates officials to scale back a street reconstruction project approved by the village board only last week.

Village staffers had estimated the cost of work on 12.3 miles of streets at $6.2 million. The lowest bid to do the work, though, was $6.8 million.

"We think higher gas prices played a big part," said Engineering Director Gary Salavitch.

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-- Martin Thompson (mthom1927@aol.com), March 29, 2000