ND higher fuel costs affect everyone

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Sunday, April 2, 2000

Higher fuel costs affect everyone JOE GARDYASZ, Bismarck Tribune

The gas pump isn't the only place you'll feel the effects of higher fuel prices.

A number of services, from your kids' school bus rides, the specials you pay for street repairs and your garbage pickup, are all affected to some degree by fuel prices.

Moving this summer? You'll pay a fuel surcharge of 5 percent. Taking a cab to the airport? A fuel surcharge on taxis is being considered. Flying? Your round-trip ticket has a $20 fuel surcharge tacked on.

Higher fuel prices are having "a huge impact" on the bottom line of his business, said Gary Schumacher, owner of Taxi 9000. The company operates a taxi service and Bis-Man Transit for Bismarck and Mandan.

Like many businesses and government entities, Taxi 9000 set its budget when gas prices were low. Until recently, the company enjoyed somewhat of a windfall from lower prices. This year, prices are much higher than budgeted for the company, which uses about 100,000 gallons of fuel a year.

If high prices continue, it may have to begin passing on a fuel cost surcharge, probably 25 cents per taxi trip and 50 cents per transit ride, he said. The city would have to approve the transit surcharge.

"We're waiting to see what the term is on this before we go to a surcharge," he said. "If it's going to turn back, we're not going to go to a surcharge. If the prognosis is that it's indefinite, we'll go to a surcharge."

Harlow's Bus Service in Bismarck is having to swallow cost increases on charter trips booked six months ago.

"It hurts," owner Dale Lein said. "It's about 50 cents a gallon higher than we negotiated the contracts, and we go all over the country."

The company plans to change its contracts to put a fuel escalation clause on charter trips, similar to a clause it already has with the Bismarck School District, for which it operates 16 rural school buses.

Jerry Gusaas, the school district's director of buildings, grounds and transportation, says higher fuel prices are costing the district about $1,800 a month, figuring the fuel escalation clause it pays Harlow's and for fueling the buses it operates in the city.

So far, the district hasn't canceled any out-of-town activity buses because of higher diesel prices, he said. With just a couple of months left in the school year, this year may not be a problem, but if prices stay high through a full school year next year, some budget adjustments may be necessary, he said.

Passing on the costs The price of moving has gotten more expensive, whether it's across the country or just across town. About a month ago, all national moving companies added a 5 percent fuel surcharge onto its bids, said Gary Gabriel, general manager of Access Relocation and Aaction Movers in Bismarck. That surcharge is evaluated daily and could go up or down, he said.

"I'm not certain what's going to happen this summer," he said. "Obviously, fuel prices have come down a little in Bismarck."

Because everyone sees the increases at the pump, customers seem to be accepting the surcharge pretty well, Gabriel said.

"Those that I deal with realize that fuel has gone up," he said.

Shipping companies such as Cross Country Courier of Bismarck also charge a fuel surcharge on deliveries. Since October, the company has adjusted its surcharge monthly based on Department of Energy regional fuel cost averages posted on the department's Web site. Right now the surcharge stands at 5.5 percent, said Bob Ehli, a Cross Country accountant.

Fuel expenses are among the company's top three expenses, he said.

"Luckily we've had a pretty mild winter so we haven't had to have our trucks idle as much," he said. "Otherwise, there's not much you can do to cut costs."

Major airlines have been passing on higher fuel costs to travelers since January, said Joe Hopkins, a United Airlines spokesman in Chicago. It began when Continental Airlines added a $10 fuel surcharge each way, and everyone else followed suit, he said.

"Ultimately, the price of higher fuel is borne by the consumer," he said. "It sends the clear message to the traveling public that fuel charges have gone up sharply, and this is a means of compensating against that."

Closer to home, rural residents may pay a fuel surcharge for trash collection next month.

Waste Management Inc., which serves 120 North Dakota rural areas, has instituted a companywide fuel surcharge that will be adjusted based on its operational fuel costs, said spokeswoman Mary Robinson. Initially based on a fuel cost of $1.50 a gallon, a percentage will be calculated for all customers at the end of the billing cycle, beginning this month. She estimated the surcharge will add from 2 to 4 percent to a customer's total bill.

"Hopefully it's only temporary, and we all hope the cost will go down," she said. "We are not making a permanent increase to our charges. The surcharge is simply to cover for unforeseen expenses."

Higher specials possible Bismarck residents won't see higher fees for trash collection, at least not yet, said Keith Hunke, the city's public works director for service operations. Fuel for the city's trash collection and landfill operations is only running about 9 cents per gallon higher than budgeted, so the extra cost is not a big factor when considering the $4.2 million solid waste budget, he said. His department doesn't anticipate any rate increases.

"Where we have seen a direct effect of increased oil prices is in our street operations," Hunke said. Contracts for oil-based street patching materials such as asphalt came in $10,000 higher than last year, about an 8 percent increase. Of course, the cost of hauling that material has gone up as well.

"There's a certain amount of work that needs to be done," Hunke said. "We're not going to say, 'We're not going to do that because of higher costs.' But we may need to prioritize more."

However, if bids come in too high on residential street rehabilitation projects, some of those projects could be pushed back a year, he added.

Higher costs on the residential street projects that are done could translate into higher special assessments this fall for repairs done over the summer, he said.

"We're just hoping this is a short-term bump and that we can absorb the rise in fuel costs," he said.

http://www.bismarcktribune.com/tribwebpage/news/apr2000/43200064321.html



-- Martin Thompson (mthom1927@aol.com), April 08, 2000


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