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Fuel prices might bust Maine school budgets

Districts expect to face new costs

BANGOR -- School systems in Maine are facing a heating oil price shock even though many have locked into purchasing contracts and consolidated purchases with other districts.

''We have locked-in contracts but those can change when there is an economic emergency," said Joe Cyr, owner of Cyr Bus Lines of Old Town, which provides bus service for 10 Maine school districts.

''We have already made the decision to go back to the schools for an adjustment; we just haven't done it yet," Cyr said.

Even though many Maine school systems locked in for gasoline, heating oil, and diesel prices when they prepared their annual budgets in the spring, most fuel suppliers have an out clause in the event prices spiral out of control.

Big refiners that sell to fuel suppliers also have an option to increase the price to compensate for market changes.

With gas and diesel now hovering around $3 per gallon, some adjustments will be needed if prices continue to rise.

Superintendent Bob Young said on Thursday that the Belfast-area district locked in its transportation and heating fuel at an average of $1.88 per gallon. But now, Young expects oil suppliers to approach the district for a price adjustment.

''They have an opening in our contracts to protect themselves. And with the prices in the Middle East and the catastrophe in New Orleans, we're all anticipating running over these accounts," said Young.

Because many districts anticipated fuel costs could continue to rise this year and next, they formed regional compacts to purchase supplies in greater bulk, said Dale Douglas, director of Maine School Management Association.

That allowed them to get better prices, but it still appears unlikely that schools will make it through the year without some adjustments, he said.

Dave Brabender, regional manager for First Student, the Great Britain-based firm that transports millions of students in Europe, Canada, and the United States, said most of the company's Maine contracts require the school districts to purchase their own fuel.

Where First Student provides the fuel, contract provisions were in place to protect the company.

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