School Bus Contract Debate Begins

The highly controversial issue of who should provide student transportation in Newtown took center stage Tuesday night during a well-attended meeting at the Municipal Center in which the Board of Education discussed the move to put the school bus contract out to bid

“This is an issue in town that is very sensitive and very unusual,” education board member Andy Buzzi said of Newtown's owner-operator bus system. "I don't believe that there is any other town in Connecticut that does this."

The district has contracts with multiple people who own and operate their own buses in town, which are parked at their homes and from which they start their daily bus runs.

Newtown has a longstanding and beloved tradition of using the owner-operator system to provide student transportation, but the cost, which amounts to about $3 million a year, according to budget figures, has led some officials to question whether it is too high.

Contracts with all of the owner and operators end next year and in preparation, the district issued a request for sealed bids, which has garnered controversy in the community.

Buzzi said the school district had no choice but to put the contract out to bid. 

“Our policy indicates that when we are engaged in contractual services in excess of $30,000, we would have to bid that,” Buzzi said, adding that board members have been reprimanded by other town boards when policy has not been followed. “We could expect the Board of Finance to let us know…we’re bidding this because that is what we need to do because of our policy.”

Officials said the bus contract was estimated to be worth up to about $14 million over five years.

Nearly every seat was taken during the Monday meeting, in which the bus contract discussion was one of many items on the agenda.

Former first selectmen Herb Rosenthal and Joe Borst attended and spoke during public participation, urging the board to preserve the owner-operator system, saying that it has served the town well for about 70 years.

“If you kill the owner-operator system and they dispose of their buses, there will be no going back,” Rosenthal said. “We will be at the mercy of one or more bus companies for as long as we are transporting school children.”

District Business Director Ron Bienkowski said transportation costs was among one of the most expensive items in the school budget.

“Transportation represents the third largest single line item, which is only preceded by salary and benefits,” he said. “This past year, we’ve been hammered with our need to find structural changes...When you look at a contract this large, there are significant potential for cost savings that can be spread over five years.”

The district has moved to using a bus company for some of its routes in recent years, namely MTM to provide special education transportation. When officials reviewed the bids at that time, they saw that the prices for regular size buses were less than the cost of the owner-operator system.

“If you conservatively look at the results from that bid, which asked for prices of regular size buses, we were talking $2.5 million, which is basically half-a-million a year that could be saved by having an operator come in and do the entire transportation system,” Bienkowski said. “I think it is our fidicuary responsibility to look at this as thoroughly as we can.”

The business director said that looking at the bus contract for “structural changes” -- a term used by members of other town boards in calling for the school district to find ways to cut costs -- was similar to switching to a self-funded health insurance program that has netted the town significant savings.

“The only thing that keeps ringing in my head is we have to make structural changes,” Bienkowski said, adding the only other area where the district could make substantial changes was in the teaching staff.

Board member Debbie Leidlein said she disagreed with the approach, particularly the requirement of a performance bond in submitting bids, which is likely to be cost-prohibitive for owner-operators. She questioned the need for such a bond if owner-operators were to submit a bid.

Performance bonds are issued in large bidding situations to guarantee that the company bidding on the service won’t go bankrupt or lack the resources to complete the job.

Bienkowski said the bond was important because the district was seeking one contract rather than the current system of contracts with 31 individuals providing the service.

“This is a different approach to providing the transportation in Newtown,” he said. “The goal is to have a single contract not multiple contracts…It’s encumbered on (owner-operators), particularly if they are going to collaborate…that they will be able to hit that performance bond.”

However, by requiring the performance bond, the district has automatically precluded owner-operators from submitting a bid, Leidlein said in asking whether the district could waive the performance bond for owner-operators.

“We would be in essence possibly eliminating our current transportation system, which is beloved in our town,” she said. “In that respect, I have a problem with not giving them the opportunity to bid on this in a way that they have, as we heard for the last 90 years.”

Bienkowski said he would recommend against it. At the same time, Buzzi said it was common to have bids fail short of some of the requirements, and it would be up to the board to decide whether that was acceptable.

“Let’s look at the bids and then it’s going to be up to this board to evaluate the bids,” he said.

Education board chairman Bill Hart asked whether it would be possible for the district to reissue the request for bids at a later time, but Bienkowski said he would advise against that because based on the time line, the district will open all of the bids on June 23, which would reveal all of the costs to the public and possibly undermine the process.

“If you throw them all out, they are going to know what the lowest bidder is,” Bienkowski said of the submitted bids and interested contractors.

The board is expected to review the matter again at its July 12 meeting.