TRAVERSE CITY -- The news was bleak several months ago: Energy costs almost certainly would top $1 million for the region's largest school district.
Since then, diesel fuel and other energy prices have plunged and Traverse City Area Public Schools administrators now say the trend could result in a positive budget adjustment early next year.
The district could cut around $650,000 from its roughly $4 million general fund deficit if the fiscal 2009 budget, effective July 1, was amended today. Alterations typically occur in January.
But if prices continue to hold, the projections could translate into a "substantial decrease" in expenses, said Paul Soma, TCAPS' chief financial officer.
"Natural gas and diesel fuel are really helping us right now," he said.
Regardless of savings, the district still will have to grapple with a more than $3 million deficit.
School board members in June adopted the budget, which projected a $3.95 million shortfall. More than $90 million in expenses were expected.
Roughly $6.9 million was earmarked for transportation, with about $1 million of that going toward fuel.
That was when diesel prices neared their peak. The highest average price AAA recorded in Traverse City was $4.91 on July 14.
Since then, AAA reports, diesel hit an average of $2.87 this week that's down from $3.82 a month ago.
And a drop in natural gas prices allowed administrators to purchase all of what the district will need this winter, and to start buying reserves for next year, Soma said.
At the time the budget was ratified, heating costs were estimated to total roughly $1 million.
Yet uncertainties remain, namely interest revenue that's already lower than expected and the possibility of a midyear state funding cut -- all of which will affect the size of TCAPS' deficit.
"That's really the dilemma we have to solve," he said.
The recent dips in energy prices have provided momentary relief to at least one other area school district.
Suttons Bay Public Schools administrators locked in their natural gas price for this year and next, which shields the district from fluctuations, Superintendent Mike Murray said. But a cold winter and heavy snowfall could draw additional resources from the general fund.
"We're optimistic this year that our energy costs would come up better," Murray said. "But until it actually happens, we're going to hold with what we put in the budget."
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