Even bulk fuel buyers feel the pinch of rising fuel costs.

Some school districts, like Bismarck and Mandan public schools, are among the bulk fuel buyers. They buy fuel by the tanker truckload instead of filling up at the local gas station. It keeps the cost below retail, but over the last four years, the price has steadily risen.

"We've had to increase our budget and hope each year we're in the ball game," Mandan schools transportation director Gordon Berge said.

He estimates the district has spent $80,000 more in fuel this year alone because diesel fuel has increased about $1 per gallon. For diesel, the district paid $3.56 per gallon in March compared to $1.55 per gallon in September 2004.

To compensate for the rising costs, some districts have budgeted more money, or tried to buy low.

"The budget has been the same, although prices are on the rise," said Darin Scherr, Bismarck Public Schools facilities and transportation director. "We buy in the valleys."

Bismarck schools anticipate the average price of diesel to be about $1 more and unleaded to be about 78 cents more next year. This school year, the average price of diesel was $3.01 and the average price of unleaded was $2.62. Unlike the pump price, school districts do not pay federal highway tax. This is 24.4 cents on diesel and 18.4 cents on unleaded. They do pay state sales tax of 23 cents.

Next year's increase could be more than what the average price per gallon has increased for the district in the last four years. Compared to 2005-06, the average price per gallon paid by the district for unleaded has increased 40 cents per gallon and the price for diesel has increased 61 cents.

During the same time frame, the district's budget has remained the same. To compensate for the increased costs, the Bismarck district has reduced fuel consumption.

The reduction comes from a no idling policy on school buses and sharing buses for activities. The no idling policy is to turn off the bus when the temperature is above freezing and not moving. If more than one activity or sport is going to the same location or town, they try to get them on one bus to save on fuel. Mandan has similar plans in place to cut fuel consumption, like the idling policy, Berge said.

Part of what helps reduce costs, is activity scheduling, Scherr said. More home games than away games help as well as tournaments closer to home, he said.

With less than two months remaining in the school fiscal year, the Bismarck district has used 25,000 gallons of unleaded and 24,000 gallons of diesel. This fuel is used for buses, maintenance vehicles and power equipment, like lawn mowers. Most of the usage is during the spring because of field trips, with summer months using less fuel.

School districts receive some state aid to help offset some of the transportation costs. It is based on how many route miles are driven transporting children to and from school. In Mandan, the buses drive 420,000 miles, with about 340,000 miles dedicated to route buses, which take students to and from school. The district has 27 buses.

Bismarck has 23 buses that it uses for school routes. It contracts with Harlow's Bus Service, Inc. for rural bus service. The Bismarck district averages 7,000 gallons per month of diesel and unleaded fuel.

To meet this demand, Bismarck has a 15,000-gallon storage tank for each fuel type. Mandan has two 12,000 gallon tanks and an 8,000 gallon tank and keeps diesel and unleaded fuel. About three times a year in Bismarck and four times a year Mandan, bids are solicited from vendors. With the rising fuel costs, bids are only good for about a day.

"It's a very quick turn around," Scherr said. "They need a bid response the next day by noon and they deliver the same day."

Bismarck employees fill up at the facilities building on Seventh Street. Scherr's office knows who's filling up through a computerized card system. A swipe of the card tells him who's filling up and how much fuel they consumed.

The district is in the budgeting process for 2008-09. Scherr would like the fuel line item increased. Otherwise, it will start affecting operations. Fuel conservation has saved as much as it can, he said. No budget increase could mean fewer field trips or activity trips, he said.

Rising fuel costs also will affect the district's contract with Harlow's. The district uses the charter bus company for its rural routes, and some field trips and activities.

The district budgets about $650,000 for its contract with Harlow's. A clause in the contract gives Harlow's an extra penny to the contract multiplier for every five cents the price of fuel increases.

Scherr's department has studied what it would cost for the district to provide all the busing and what it would cost to contract it all out. The combination of district busing and contract busing has been the most cost effective, he said. Mandan provides all its own busing.

At Harlow's, the company is restructuring its service. Rates are increasing for motorcoach service, and quotes have a short life span with the volatile fuel prices.

"The quotes Igave out six months ago are obsolete at this point,"Harlow's manager Neal Pritchard said.

Signed contracts are still good, but If anything unexpected happens, it cuts into the company's profit, he said.

A trip to Minneapolis that he quoted in February, for example, increased $400, because the price of fuel increased a $1 since that time, he said.

The company is abandoning its on-site fuel tanks because the cost of transporting fuel has risen. Instead, they fill up at a local gas station.

In Bismarck, he estimates, the company uses 10,000 gallons of fuel. This would cover 27 school bus routes, and filling the tanks on seven motorcoaches, which have 300-gallon tanks, before and after trips.

The company must run its motorcoaches to turn a profit, meaning returning customers can't expect last year's rate on trips.

"It's a scary future," he said.

(Reach reporter Sara Kincaid at 250-8251 or sara.kincaid@bismarcktribune.com.)