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inancial pressures created by the Great Recession and the growing demands of pen- sion and health care obligations have fueled an upturn in school districts weighing the
benefits of contracting for transportation services. We spoke with several long-time industry professionals to get their opinions. Tom O’Sullivan, vice president of contracts and
bids for the Cook-Illinois Corp., a Chicago-area bus contractor, said the most recent economic downturn and state funding cuts have placed a heavier burden squarely on local taxpayers’ shoulders. O’Sullivan recalled when he started in the industry in 1992, roughly 30 to 35 percent of the nation’s dis- tricts contracted services, which today remains about the same amount of school bus business nationwide. “In Illinois, it was closer to 50-50. Tose numbers
haven’t changed much, but with a reduction in trans- portation funding over the last couple years in our state, we have noticed more districts are interested in talking to us or other contractors about the feasibility,” he said. “Districts with 80, 90, 100 buses are even looking at contracting. Tat hasn’t been typical.” Scott Allen, senior general manager for the
TransPar Group, a student transportation manage- ment and consulting firm, and Roger Moore, senior vice president of commercial development at First Student, agreed. “Tere’s been a little bit of an uptick. I wouldn’t say
there’s been an explosion, but the recession and the financial position that a lot of districts are in have had an impact,” noted Allen. “Everyone is trying to find a way to keep that dollar in the classroom and, quite honestly, that’s where it should be.” All three men said financial pressures come in var-
ious forms. In states like Pennsylvania, state pension obligations are creating a real squeeze. In many places, districts have neglected to keep a replacement or rotation cycle going. “When I started in the business, a 65-passenger bus was under $30,000. It’s easily over $70,000 today and sometimes $100,000,” said Allen, who has been in the transportation sector 29 years. “You miss your cycle for a year or two in a row and find yourself backed against the wall — that can be a pretty hefty mountain to overcome.” O’Sullivan and Moore cited the end of a leasing
cycle as another good time for school districts to consider contracting out services.
ACA WORKFORCE SHUFFLE While the Affordable Care Act is “the law of the
land,” said Denis Gallagher, founder, president and CEO of Student Transportation Inc., many of the impacts on business – from contractors to school districts and everything in between – have yet to be identified much less realized. For example: Should driver hours be kept at a minimum? How does that affect the minimum number of hours required under a union contract? What is the potential effect on the student riders? Te bottom line is that confusion reigns. “A lot of districts we’ve talked to are very con-
cerned with the impact of (the employer mandate),” O’Sullivan said. “Is there a better way to shuffle the workforce to keep employees below 30 hours a week? Do we try to recruit drivers for the morning and drivers in the afternoon? I wouldn’t say that’s the best remedy.” Even as the House passed legislation this spring to set the workweek at a minimum of 40 hours, Allen said uncertainty about the ACA is “definitely some- thing that’s got people’s attention. “You’ve got that on top of escalating pension costs that
have gotten out of control. Districts are beginning to think outside the box about their workforce,” he added. Tat uncertainty has prompted contractors to
include a mutually agreeable proviso in contracts to address unforeseen costs, Moore said. O’Sullivan, Moore and Allen also agreed there’s a
perception that contracting means a district will lose control of its transportation program. “Tat’s the biggest argument you hear: ‘Tey’re
going to bring in their own people and it’s not going to be the driver you’ve had for 30 years.’ Te reality is that’s not true. Te company needs that driver … Tey’re not bringing drivers from Mars,” Allen said.
“It’s the fear of the unknown, and even for school districts and board members the perceived loss of control. Really, you have more control because if you don’t like the way it’s going, you call the contractor and say, ‘Change it.’” O’Sullivan explained that Cook-Illinois works for the district and the goal is to build a lasting partnership.Ø
"We allow schools to focus on their core competency while we focus on doing ours professionally and safely."
— Roger Moore, First Student
www.stnonline.com 47
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