Feeling pain at the pump, agencies downsize, scale back

By Steve Kanigher

Thursday, May 29, 2008 | 2 a.m.

The gas pump is not the only place the public is paying for higher fuel prices.

Trips to the supermarket, the mall and other locales provide plenty of unpleasant proof of how rising gas prices have translated into bigger bills for food and many other products.

And the effect is not confined to the pocketbook. The Clark County School District, for example, has reduced bus routes and stops, forcing many students to walk longer distances.

Like motorists who are getting squeezed every time they fill their gas tanks, local government agencies are feeling the pain of higher fuel prices, even with cost advantages not available to the average driver.

Although local government agencies can lock in below-retail prices through long-term contracts and receive discounts on the 18.4 cents-per-gallon federal gasoline tax, they’re still getting walloped in the pocketbook by double-digit percentage increases.

As a result many are rethinking how they use their fleets and are purchasing more fuel-efficient replacement vehicles, such as hybrids that run on gas and electricity.

None has been harder hit financially than the Clark County School District, which operates Southern Nevada’s largest local government diesel engine fleet, and the Regional Transportation Commission, which runs the valley’s commuter buses.

Although it’s paying at least 80 cents per gallon less for diesel fuel than the $4.50 price charged the general public, the School District saw its monthly fuel bill soar from $750,000 to roughly $1.3 million over the past year, Transportation Director Doug Geller said.

“Our cost was up 62 percent over just the past four months,” said Geller, who oversees a fleet of 1,470 school buses and 1,270 other vehicles. “We’ve had to cut back in a lot of areas.”

If fuel prices continue their ascent, the district may be forced to reevaluate the use of buses for after-school activities, including travel by sports teams, Geller said.

“Everything has to be on the table,” he said. “The reality is that if our budget gets tighter and tighter, something has to give.”

Something has. The reduced number of stops means more children are having to walk the maximum distance to bus stops allowed by district regulations — a half-mile for elementary school students, three-fourths of a mile for middle school pupils and one mile for high schoolers.

“If you look at the changes in routing and scheduling, complaints from parents have been trickling in because the students have farther to walk,” Geller said.

The district could trim its fuel costs by opening a bus yard in the northwest valley, but that plan is meeting stiff resistance from nearby residents concerned that it would bring pollution.

With some buses now traveling 20 to 30 miles to reach other district bus depots, Geller estimates the yard could save the district up to $3 million a year in fuel costs.

At the Regional Transportation Commission, the higher fuel costs have prompted officials to replace older buses with newer, more fuel-efficient versions.

Even so, the commission’s fuel costs continue to rise. For the fiscal year that ends June 30, the commission budgeted $15 million for fuel but expects to end up spending $20 million. And its fuel budget for the next fiscal year, beginning July 1, will be $32 million.

The commission negotiates contracts for roughly 75 percent of its diesel fuel needs, but the prices on those contracts rose sharply from $2.17 a gallon this fiscal year to $3.65 starting July 1.

“We haven’t made any determination yet about any cutbacks,” commission spokeswoman Tracy Bower said. “That’s what we’re looking at now.”

The story is the same throughout the valley. Clark County, with 2,939 vehicles, has seen its fuel costs rise 34 percent over the past year. At the Las Vegas Valley Water District, diesel costs rose 61 percent and unleaded fuel costs increased 22 percent.

Metro Police and the city of Las Vegas both took a 22 percent hit. Henderson is looking at a projected 33 percent increase. North Las Vegas had a relatively modest 14 percent hike from a year ago, but its fuel costs have nearly doubled over a two-year period because its fleet was expanded to keep up with growth.

The county is trying to combat higher fuel prices by replacing its heavy Ford Crown Victoria and Mercury Grand Marquis models with more fuel-thrifty cars such as the Honda Accord and the Toyota Camry and Prius. It also is phasing out gas-guzzling sport utility vehicles such as Ford Expeditions and Chevrolet Blazers for hybrid Ford Escapes.

The goal of David Johnson, the county’s automotive services manager, is to have county vehicles that are shared by multiple agencies make up at least 20 percent of the fleet, double what it is now.

Likewise, Metro began switching its plainclothes officer cars from gas guzzlers to lighter, more economical Chevrolet Malibus, Metro Officer Jose Montoya said.

As with other public agencies, the Water District is finding the higher fuel costs a powerful incentive to search for operational efficiencies — in its case, by using satellite-tracking technology to dispatch the closest service vehicle available to customers to spare fuel costs. It also is using more fuel-efficient vehicles to deliver barriers to work sites.

“No one could have foreseen the spike we had in prices this year,” said James Morwood, the district’s fleet services manager. “My crystal ball is broken.”

The Water District, the School District, the county and the city of Las Vegas also are looking to rebid a biodiesel fuel contract to use a less expensive blend containing more “yellow grease,” or used cooking oil, than the soy product now mixed with diesel.

Metro and other local agencies increasingly have turned to cars that run on E85, which contains 85 percent clean-burning ethanol — produced from crops such as corn — and only 15 percent gasoline.

Ethanol-based products, though, also are getting increasingly expensive. “That’s because feedstock prices are higher,” Morwood said. “Look at the price of milk and eggs. When oil goes up, everything goes up with it.”

E85 remains less expensive than regular unleaded gas, but several independent tests have concluded it also delivers fewer miles per gallon. Still, local agencies — bound by a state regulation requiring at least 90 percent of their new vehicles to run on alternative fuels — are relying more on cleaner-burning fuels considered environmentally friendly.

Las Vegas city officials try to save on fuel costs by using vehicles that run on compressed natural gas, which costs the equivalent of $1.56 a gallon, much less than half the price of gasoline.

“The prices for natural gas are a lot more stable than they are for commodity fuels,” said Dan Hyde, the city’s fleet and transportation services manager and executive director of the nonprofit Las Vegas Regional Clean Cities Coalition, a public-private partnership that promotes alternative fuels.

To address high fuel prices, North Las Vegas is evaluating its fleet and could make radical changes. Eric Dabney, the city’s general services director, said they could include forcing employees who take city vehicles home to use their own autos instead and get reimbursed for mileage and using rental cars for short-term needs.