Published: November 12, 2008 10:17 am      

School still at high gas rate

It looks like the recent drop in fuel prices is coming back to bite the Goshen school board.

School board members learned at their meeting Monday they will be locked into a purchase of approximately 90,000 gallons of fuel at a fixed rate of $4.193 per gallon.

The report, presented by Executive Director of Secondary Education and Transportation Barry C. Younghans, indicated that Goshen Community Schools originally awarded its fuel bid to North Central Co-op at the agreed-upon price when prices were elevated.

Younghans indicated that while the school corporation will still be able to purchase fuel from local gas stations at lower cost, the obligation to purchase the approximately 90,000 gallons of fuel from the co-op still stands.

The reason the school system must still purchase the advertised amount is because the bid process caused the co-op to procure the 90,000 gallons on the open market at the time of the agreement, Younghans said.

In connection with this predicament, Younghans indicated that discussions have been initiated between the co-op and GCS regarding the timing of fuel bids.

Younghans said recent data indicates that the months with the lowest prices for fuel tend to be October, November and December, while the school system has purchased its fuel during the summer months.

Due to this fact, Younghans said he will be meeting with school Superintendent Bruce Stahly to determine if GCS should buy fuel in the future sometime from July through December.

Such a move would help to mitigate the severity of the higher cost agreed to in the summer, Younghans said.

Also discussed during the presentation was purchasing insurance offered by the co-op. The insurance would allow GCS to purchase fuel at market rate but with a maximum cost per gallon. In addition, the school corporation would purchase an insurance policy based on the maximum bid cost.

Younghans indicated he is still in support of the use of a fixed rate purchase or a maximum cost per gallon purchase.

Younghans added that in his opinion, the only way GCS can have accuracy in budgeting is by using a fixed cost-per-gallon system.