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MISD facing higher diesel fuel prices for school buses

A recent Office of Superintendent of Public Instruction (OSPI) report shows that, due to the dramatic climb in gas and diesel prices, the Washington State Legislature has fallen short by more than $49 million in student transportation funding since 2003.

Over the past five years, the cost of diesel fuel, which the majority of school buses use, has more than doubled from $1.54 per gallon in September 2002 to $4.37 per gallon in May 2008. The state, however, has not adjusted its transportation allocations to match this difference. And school districts across Washington, Mercer Island included, are feeling the pinch.

“The last time I bought diesel, it was $4.75 a gallon. At the beginning of this past school year, it was $3 per gallon, so it’s definitely getting more expensive,” said Todd Kelsay, director of transportation for the Mercer Island School District. “We use 20,000 gallons of diesel a year for the school buses. We did not expected to spend as much fuel as we did.”

True, the entire nation is reeling from the soaring prices of fuel. Yet school districts that depend on state finances for pupil transportation — determined by the number of bus riders calculated per year — have been short-ended over the past two years.

Last month, the OSPI published a 12-page report titled “The Impact of the Rising Cost of Diesel Fuel on School Transportation in Washington State.” The report highlights the disparity between the state’s annual transportation allocations and the accelerating cost of fuel prices. Diesel, in particular, has become increasingly expensive and therefore is “exacerbating the underfunding and placing great stress on school district budgets,” according to the report. “The result is a drain on school districts’ general funds (and reserves) at a time when the K-12 system is suffering from underfunding in all other formula components.”

Mercer Island, in order to make up for insufficient transportation grants, turns to district levy funds, said Associate Superintendent of Business Services Liz Dodd. Looking at last year’s numbers, Dodd said the district recorded $1.5 million in transportation costs. Of this total, $640,000 had to be taken from levy funds.

“Every year, it’s a balancing act,” she said. “The continued costs that are unfunded go up and we have to find ways to cover those costs.”

However, Kelsay pointed out that Mercer Island is in a better situation than other Washington districts, where buses must travel a great distance between each stop.

“[Increasing gas prices] have an impact. It hurts. But we have a fairly dense population. We’re not nearly as bad off as other districts that cover miles between stops,” the director said.

Regardless, the MISD transportation department has brainstormed several ways to maximize fuel costs.

“We’re being ultra efficient on routing,” Kelsay said. “We’re maximizing our loads, trying not to idle our engines, and upping a lot of focus on programs for kids to safely walk or bike to school.” The incentive is not only financial, but environmental, he added.

At the same time, the Legislature has helped districts to switch to ultra-low sulfur diesel — better for the environment, worse for the school budget.

MISD switched to the more eco-friendly diesel three years ago, accepting the fact that its fuel expenditure would jump. There has been recent conversation about switching to biodiesel, which the City of Mercer Island plans to do next year, but the high cost has stymied efforts. A boost in state resources could be the defining factor.

Working toward this aim, the OSPI has proposed two solutions for the state’s enormous shortfall in transportation funding. In addition to asking that the Legislature compensate school districts the owed $49 million and ensure “that higher fuel prices are addressed for the 2008–09 school year,” the department hopes to create a more accurate method to calculate district allocations. The goal is to develop a system by the 2009-10 school year.

According to the OSPI report, the state’s 2007–09 Operating Budget provided $25 million in supplemental funding to school district transportation operations that were identified as underfunded. This amount was divided in half between the two corresponding school years; $12.5 million for 2007-08 and $12.5 for next year. Unfortunately, the rapid rise in the cost of diesel fuel overwhelmed the amount of supplemental funding provided.

“Therefore, the Superintendent of Public Instruction proposes that the Legislature should reimburse school districts the $49.3 million in underfunding due to high fuel costs experienced by school districts since 2002,” the report reads. “This amount should be added to the $12.5 million provided in supplemental funding for distribution in the 2008–09 school year.”

Without going into complex detail, Kelsay summarized the OSPI’s proposed solution to the problem.

“Basically, they’re hoping to isolate each district’s transportation fuel costs from other expenditures and ask for direct reimbursement for those costs,” he said. “They have two proposed methods of doing this, and they’re working with the state to determine what next year’s allocation should look like.”

Meanwhile, the MISD depends on its annual “ride the bus to school week,” held every September, to secure state funding. Since the early 1980s, Washington has used this annual student ridership count to determine how much money each district receives for the school year. The legislative adjustment of this allocation rate provides for increases in wages, benefits and other costs, including fuel.

The bus count is the district’s best chance to offset soaring fuel prices, Kelsay said. The number of students who ride to school that week is crucial to earning money for MISD transportation. “Everybody who has the option of riding the bus can help us. I can’t emphasize this enough,” he said.

For full OSPI report, visit: www.k12.wa.us.

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