On June 12, the District 65 School Board approved contracts with two bus transportation providers: first, a one-year extension to its contract with Positive Connections, and second, a one-year contract with Compass Transportation.
The school board did not discuss the contracts on June 12, but the finance committee discussed them on June 7.
Raphael Obafemi, the district’s chief financial officer, said at the finance committee meeting that the contract extension with Positive Connections provided the bus company with a 10% overall increase from this past school year’s rate. Obafemi said that considering the cost of transportation, and the associated cost of diesel, the increase “is actually very reasonable. We negotiated the increase down to 10% from last year.”
Compass, he said, has been providing bus transportation services for students in the district’s early childhood program at the Joseph E. Hill Early Childhood Center. Due to a shortage of buses this past school year, Obafemi said he asked Compass to add six buses and to provide bus transportation to some of the district’s other schools. This will reduce the need to use BrightLift taxis to transport students, which is a much more expensive way to transport students, he said.
The contract with Compass provides that Compass will provide bus transportation to and from King Arts, Kingsley and Willard schools.
Transportation cost skyrocket last year
Last week, the board’s Finance Committee was advised that expenses for student transportation would be about $4 million over budget for the district’s fiscal year ending June 30, 2013 (FY”13). In September 2012, the school board approved a budget for a total of $6.3 million in transportation expenses. Adding the $4 million to that amount will bring the total to more than $10 million for the year.
Due to jump in transportation expenses, the district is now projected to end FY’13 with an operating deficit of about $3.4 million, rather than a surplus of $574,886.
Kathy Zalewski, District 65’s business manager, said transportation expenses went up “because of the shortage of [bus] drivers, so we have to put our students on BrightLift cabs, which costs a lot more than the buses.”
Obafemi said the shortage of bus drivers made it difficult to provide bus transportation to students.
“So instead of using yellow school buses, which is a preferred mode of transporting the kids, we were using BrightLift and more one-passenger transportation, which costs more,” he said, adding that it was not feasible to add new buses in the middle of the 2022-23 school year because the bus company serving the district would need to purchase and retrofit the new buses and hire more drivers in a short time. He said in preparing for next year, he reached an agreement that Compass would provide an additional six buses next year.
The District has not yet provided a budget for bus transportation costs for FY’24. And, it has not provided estimates of how much will be paid to Positive Connections, to Compass, or to BrightLift in the next school year.
Lack of competition
In 2019, Obafemi said, the district sought bids from transportation providers and received only one bid. The district then sought bids again and sent bid packages to more than 30 transportation providers. In the second round, he said, the district received only one bid, and it was from the same company that submitted a bid in the first round. The second bid, though, was higher than the first.
“What we found out is the marketplace for school bus transportation is not competitive at all,” Obafemi said. “So, what we’ve been doing is to try to promote competition and to enter into one-year contracts, so the district is not locked in for a long term.
“We’re hopeful, maybe next year, the marketplace may look better,” Obafemi said. On a cautionary note, he said, “We know inflation is pretty high.”
Requests for an analysis of what busing will look like
Joey Hailpern, a member of the school board and chair of the finance committee, asked if administrators could give a preview of what bus service will look like after the 5th Ward school is built and in operation. He noted that the district has said that the number of students who are bused will be reduced once the new school opens, and that the savings on bus transportation costs will be sufficient to pay the lease certificates which have been issued to fund the new school. The annual cost to pay the lease certificates is about $3.2 million per year.
Obafemi said administrators were anticipating that the new school will be opened by the fall of 2025, so they could probably estimate the impact on busing at the school board’s meeting in June 2025.
Hailpern asked if it could be done sooner. He suggested that the district could estimate how many students will be going to the new school and how many will no longer need to take the bus because they will be attending the new school.
Obafemi said he thought the spring of 2025 would be a reasonable time to do that “because we have a better idea of what the construction looks like.”
Hailpern pressed for an earlier date. He said the district has made “the claim that we can pay for the lease certificates with the savings from bus transportation,” saying that he’d “like to map out, even in a hypothetical, if 700 students are going to go to the 5th Ward school, and we decrease our demand for busing by 80% of that, how many buses does that take off the roll? And how might that change the contracts that we’re signing and the expense of transportation? And does that match the amount that we’re talking about?”
Hailpern said he did not want to miss having an opportunity to have a public discussion and to be transparent about how building the 5th Ward school will reduce transportation costs because fewer students will need to be bused.
Obafemi said he thought they could do a projection like that in about June 2024, because they will have broken ground next February or March, depending on weather conditions. He said once they break ground, administrators will be in a better position to start doing a projection that is reasonable.
Obafemi added that he thought the savings due to a reduction in the number of students being bused once the new school is operational will be even greater than previously estimated because transportation costs have been rising so much.
Donna Wang Su, a member of the school board and the finance committee, asked that the analysis take into account the savings or added costs that would be incurred due to shifting students from Bessie Rhodes to the new 5th Ward school. Obafemi agreed.