SPECIAL REPORT
Major School Bus Contractors Report on Student Transportation Trends
By Michelle Fisher A
s another school year draws to a close, questions about the future of school-bus service are weighing on every- one involved in student transportation. Some officials
are waiting on a legislative vote or budget, while others are making tough decisions such as whether to contract out trans- portation operations. John Gillie, First Student’s senior vice president of commercial
development, said the reasons used to outsoure and the ben- efits obtained from making those decisions are as unique as each community. Common reasons to select a school-bus contractor include operating efficiencies, expertise, cost savings and im- proved safety and technology. “An experienced transportation contractor has the expertise,
best practices and capacity to enhance efficiencies, productiv- ity, safety and reliability,” said Gillie. “In fact, a contractor’s safety training and technological investments normally exceed district investments.” Patrick Vaughan, chief operating officer of Student Transpor-
tation of America (STA), noted that outsourcing also enables cash-strapped school districts to upgrade aging fleets. “As the district’s budgets come under fire on the capital side,
it’s very difficult for them to fund both operating expenses that are going up, as well as replace their fleets,” Vaughan said. “Tere is a huge interest with school districts and communities to run the most efficient and clean-air vehicles available, and oftentimes they don’t have the funding for that.” Another key reason, he continued, is the sheer difficulty of
running student transportation operations and dealing with the regulations, mandated requirements, safety concerns, driver ab- senteeism and other “transportation headaches.” Rick Klaus, vice president of sales for National Express, which op-
erates Durham School Services and Stock Transportation, agreed that school districts have different reasons for deciding to privatize. “Districts choose to go outside for their transportation
services for cost savings, technology, employee training and de- velopment and, finally, to allow them to focus on their primary job of educating students,” Klaus said. “Each year they are asked to do more with less.” John Benish, president and COO of Cook-Illinois Corp., opined
that cost-savings is the main reason outsourcing may be on the rise. “Districts are outsourcing because it is less expensive than running your own transportation,” he said. “Districts are just plain out of money and cannot afford not to look at contracting.”
34 School Transportation News Magazine June 2012
IS IT ALL ABOUT THE MONEY? Te National Education Agency’s stance is that outsourcing
school services is usually a “bad bargain.” But the association noted that many school officials still see privatization as a means of cutting costs for one simple reason: instant cash. Meanwhile, the Keystone Research Center published a study
that claims outsourcing in Pennsylvania costs about $223,900 more in taxpayer dollars, and taxpayers would save an estimated $78 million if every school district statewide kept student trans- portation in-house. “School districts contract out school bus transportation to
gain a short-term infusion of cash from selling bus fleets—an especially alluring option with districts now facing deep cuts to funding for classrooms,” stated the Keystone report, released in March, finding that 72 percent of Pennsylvania school districts were outsourcing in 2008, up from 62 percent in 1986. Robin Leeds, a consultant to the National School Transpor-
tation Association and chair of the Pupil Transportation Safety Institute’s board of directors, disputed the credibility of the Key- stone study. She said the authors ignore the values of outsourcing, such as newer buses, greater expertise, better-trained drivers and fewer headaches, reported by school officials they interviewed. “From the highly selective ‘literature review,’ which cited only
studies published by public employee organizations, to the ex- clusion of many expenses in figuring in-house costs and the misrepresentation of contract cost increases, the report reflects the anti-privatization bias of the Keystone Research Center, whose Board of Directors and funding largely come from labor unions,” Leeds said. Research published last August by the Mackinac Center for
Public Policy showed that outsourcing is also spreading in Michi- gan — 12.2 percent of school districts compared to 3.8 percent in 2005. Tis study found the main reason that districts go with privatized services is to reduce labor expenditures, particularly retirement benefits. “Outsourcing will continue to grow in Michigan because of the
increasing retirement costs of public school employees, which is approaching 30 percent,” said Kellie Dean, president/CEO of Dean Transportation in Lansing, Mich. “Another reason is dis- tricts lack the resources to replace old school buses and refurbish aging fleets because of the state’s school funding formula.” In Michigan, the Flint, Rochester and West Bloomfield school districts recently voted to outsource transportation services to save
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