Despite rising fuel costs and a decrease in its fuel budget, Magnolia ISD (MISD) is still on track to be under or meet its financial target for the 2010-11 fiscal year (FY).

For FY 2009-10, MISD budgeted $850,000 for fuel costs, according to Chief Financial Officer Erich Morris. The district actually spent $506,998 leaving an excess of $313,002 in the fuel budget.

The average fuel cost for FY 2009-10 was $2.12 per gallon.

In the current FY 2010-11 the district slashed its previous budget and allocated $650,000 for fuel, with the cost of fuel rising 59 cents per gallon on average. Fuel is currently costing the district and average of $2.71 per gallon, Morris reported.

“The fuel budget for 2010-11 was one of many that decreased from the previous year given tightening budgets state-wide resulting from stagnant state revenue streams locked into 2005-06 per pupil levels,” Morris said. “The district felt comfortable decreasing the fuel budget given prior year fuel costs, adjustments in mileage estimates and reasonable fuel pricing expectations.”

Morris said the district has taken steps to ensure that rising fuel costs do not interfere with payroll budgets or school programs.

He added that three years ago MISD implemented a new two-tiered bussing system to assist with significant savings on fuel.

“This was partly as a result of significantly increased fuel costs in the 2007-08 school year,” he explained.

In addition, the district has also practiced other cost-saving measures such as consolidating neighborhood stops. MISD has limited all irregular bussing of students including field trips and employee travel, among others, according to Morris.

“These practices, alongside a conservative budget approach, have resulted in little effect on payroll or other programs,” he said. “Failure to have initiated or properly implemented the recently enacted practices ‘may’ have resulted in negative effects on other budgets especially given the increase in fuel costs this school year (2010-11).”

“In short, a progressive approach to cost cutting measures in today’s economic environment has prepared the district for the times,” he added.

As of July 8, the district has spent $572,612, leaving $77,388 in the fuel budget to last through Aug. 31.

While fuel costs are projected to rise and MISD has cut back on its fuel budget, overall Morris said he anticipates MISD to not exceed its $650,000 fuel budget for the year.

“The district is confident that fiscal year ending numbers will end within the budget, for fuel purposes,” he said.

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