Should taxpayers provide fiscal support to a local business which employs nearly 250 people when it makes a poor business decision?

That's one of the options being explored by the consortium which purchases heating oil for St. Mary's, Charles, and Calvert County governments and school systems.

The consortium has a contract with Burch Oil to supply heating oil at $.97 a gallon, but Burch Oil says it must receive $1.85 a gallon or take a loss. According to the St. Mary's school system's Chief Financial Officer Dan Carney, if Burch Oil doesn't honor its agreement the school system will have to incur $700,000 more in costs for heating oil just this year than it has in the budget. And since the contract has two years to run, that totals additional costs of $1.4 million someone has to pay.

Burch Oil is said to have notified the County last fall that it would only honor the agreement through the June 30, 2005. Burch Oil's supplier is “Out of Business” and cannot honor its agreement with Burch Oil, so Burch Oil says it cannot honor its agreement.

According to Sonny Burch, well known businessman and former candidate for County Commissioner President, it's all being worked out and he doesn't think he will have a problem.

What does all this have to do with education? The answer to that question is simple. Where will the $700,000 a year for two years come from? If the negotiations result in Burch Oil's being relieved of the obligations to fulfill its contract, will the County add $700,000 to the school budget to cover the increased costs? Will the school system take the money out of its education programs and let the children and/or the teachers do without? Or will the school system use the '05 budget surplus to pay the bill. What will happen in FY '07, when additional costs for oil could add even more to the school budget?

$700,000 a year for two years = $1.4 million. That's a lot of money for the taxpayers to pay to save Burch Oil from its problems.

How are we to view this situation? Whose fault is it that the school system's favorable oil purchase agreement has been unilaterally cancelled?

Should we blame Burch Oil for not negotiating some sort of adjustment to the price of oil in the contract which would have allowed the cost to change and provided a safety net for the company? They have been dealing with their supplier for years without problems. Why should they have anticipated problems this year?

Should we blame the school system for trying to take advantage of Burch Oil's inability to foresee a wildly advancing oil market and price the oil accordingly? Who could have foreseen today's oil prices 15 months or so ago when the contract was let? And the school system really doesn't have that extra $700,000 in its budget.

Should we blame the purchasing consortium for not writing a safer contract when it went for bids, a contract with an adjustment such as is used by Montgomery County? They were simply trying to get the most favorable price for a much needed commodity.

Should we blame the President and the Congress of the United States for not having previously instituted an energy policy that would have prevented such wild swings in prices at the oil burner and at the gas pump?