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High fuel costs hitting hard for businesses, agencies

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buy this photo Steve Price, driving instructor at Normal Community West High School, helps sophomore Coty Tyner of Bloomington fill the tank of the vehicle at the Unit 5 transportation department gas pumps Tuesday afternoon.(The Pantagraph/LORI ANN COOK) (April 1, 2008)

CLINTON - In the fall 2005, Ron Savage, owner of H&M Trucking in Clinton, spent $20,000 every three weeks on diesel fuel that cost $1.95 a gallon. | Multimedia: U.S. Gas Prices

He testified at a state hearing, encouraging lawmakers to provide relief for an industry that had seen diesel costs rise by 40 cents in six months.

Now, when one of his trucks needs a fill-up, the average cost is more than $4 a gallon.

"It's just ridiculous," Savage said. "There's no end in sight. And everyone is searching for answers and wanting to do this and wanting to do that. I remember when people were complaining when the price of fuel went from 38 cents per gallon to 41 cents per gallon. But now, look at it."

The trucking industry is just one business hard hit by the rise in fuel prices, which also has dug into the pocketbooks of school districts, city governments, county governments and families.

"We began seeing the spikes in the costs of fuel prices after Sept. 11 and really, it hasn't been stable since," said DeWitt County Engineer Craig Fink. "When we make our budgets out now, we have a fairly good idea on what to estimate, but since the prices fluctuate so much, it's not easy to get a firm figure that you can rely on."

For instance, this week, the City of Bloomington paid $3.31 for a gallon of diesel, about 30 cents more than a year ago. Governments don't pay taxes for fuel, so the price is 30 to 40 cents less per gallon than at the pump.

Still, it's a load for a city that owns about 315 vehicles, including squad cars and fire trucks.

"The price keeps going up and up and it's not going to be pretty," Bloomington Fleet Management Director Dan Augstin said. "It won't be pretty for the city or the retail customer as well."

Andrew Wise, business and operations manager for rural Stanford-based Olympia School District, budgeted generously for fuel this year, but every bit of that will be used.

He expects to spend $250,000 for fuel. District buses cover 377 square miles, the largest area for any district in the state.

"I expect to use every penny of that to get us through the year," he said. "That's $20,000 more than last year, and the trend will likely continue."

The district uses mostly bio-diesel in its buses, but that price also has gone up to $3.70. "Next year's budget will reflect rising fuel prices," Wise said. "Since revenue doesn't increase (and fuel prices do), something else has to come down."

That's where local residents take a hit.

"You have to shift your priorities," Fink said. "Some projects that need to be done may not get done because the money you had reserved for that is now paying fuel costs even though you may not be driving any more miles then you did previously. And it's not just the fuel we purchase, but you also see it in projects that are bid out. If you had a project that went out for bids in 2000, that same project will now cost 200 percent more as a result of fuel costs."

For fiscal 2008, Bloomington-Normal Public Transit System budgeted $732,300 for fuel, or $17,000 more than in 2007, to keep tanks filled in its 31 full-size buses and six smaller buses.

Transit officials predicted they'd have spent $488,000 by March 1. Instead, costs had reached more than $534,000.

The now-anticipated shortage shouldn't affect service.

"We're not going to stop running the buses," said spokeswoman Melanie Overend. "We'll just have to adjust our other spending areas."

Livingston County Highway Engineer David Winters expects to overspend his $983,000 budget by 20 to 25 percent. The department budgeted $70,000 for fuel, but already has used $31,000 - and the fiscal year doesn't end until Nov. 30.

To make up the difference, Winters probably will take money from building maintenance, equipment repair or materials funds.

In Pontiac Township High School District 90, some school supply purchases may be put on hold. The fiscal year ends June 30, but the district already has spent $33,000 of the $35,000 allocated for fuel, said Superintendent Leo Johnson.

Normal-based Unit 5 School District, which educates almost 12,500 students in Normal, Bloomington, Carlock, Hudson and Towanda, planned ahead for rising gas prices.

Last year, the district spent $789,000 on fuel and budgeted a 20 percent increase for this year, said Jim Gilmeister, the district's chief financial officer and treasurer.

The district will comfortably stay within its budget this year, but may have to increase its fuel allocation by another 20 percent next year if prices continue to rise.

Clinton School District Business Manager Rick Imig likely will wind up on target with a fuel budget of $125,000.

"When it comes to fuel, one of our philosophies is to anticipate higher costs and less revenue," Imig said. "So, we did that. But, in the last five years, we have leased new buses and the fact that they are brand new is helping us with our fuel economy that we didn't have with our older buses."

Pontiac used the same approach, budgeting $160,000 for the fiscal year that ended March 31. Final receipts likely only will be about $145,000.

City Administrator Bob Karls doesn't want to see service cuts if the new budget needs to be altered.

"Sure, we might alter them if it comes to that point, but we monitor (prices) and at this time it has not affected services at all," Karls said.

Reporters Tony Sapochetti, Marlo Guetersloh, Phyllis Coulter and Michele Steinbacher contributed to this story.

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