Bus contractors: More funding needed

Matt Bittle
Posted 8/23/15

On Friday, school buses at Larkin’s Bus Services in Clayton were lined up and ready for another school season. Many bus contractors are concerned with the rising costs associated with transporting …

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Bus contractors: More funding needed


On Friday, school buses at Larkin’s Bus Services in Clayton were lined up and ready for another school season. Many bus contractors are concerned with the rising costs associated with transporting children to schools. (Delaware State News/Dave Chambers) On Friday, school buses at Larkin’s Bus Services in Clayton were lined up and ready for another school season. Many bus contractors are concerned with the rising costs associated with transporting children to schools. (Delaware State News/Dave Chambers)[/caption]

DOVER — It’s that time of year. As the end of August approaches, summer starts turning to fall, and students return to school.

Most public schools start this week or next week, beginning the annual cycle. From Talleyville to Delmar, school buses are nearly omnipresent at certain times of day. Contractors dispatch their fleets to transport students, and big yellow buses, an integral part of the education system, rumble across the roadways.

But some contractors are frustrated over what they believe is a lack of support from the state. Their industry, they say, is struggling.

Bus operations are funded by a complicated formula that takes into account the price of fuel and other factors. It is revisited every year in the statewide budget bill, although the General Assembly may opt not to increase the provided sum.

For this year, contractors will receive a daily rate of $107.53 per bus, plus an additional $21.04 for insurance (divvied up differently depending on the district) and an additional $1.37 for every mile beyond the first 30. The average 30-mile route pays $22,000, said Robert Koppenhaver, who operates RJK Transportation Inc. in Houston.

The money from that total is quickly eaten up by gas, repairs, driver pay and other factors, contractors said. Costs have risen in recent years, while the state allowance has largely stagnated.

Running a bus in Kent and Sussex last year cost about $30,000, approximately $1,000 more than operators received back, according to a working group formulated to study bus costs.

The state is spending $88.4 million this year on school transportation. That covers about 90 percent of the costs, with the districts picking up the remaining bit, a Department of Education spokeswoman said.

The funding formula was created in 1977 and has only received small percentage increases since.

For Neil Moore, president of Milford-based D & N Bus Service, the biggest problem is that the state covers only the mileage from the initial stop to the school and vice versa, not from when the bus leaves the lot to when it returns.

“There’s no transportation provider that hauls any commodity that starts the charge when that vehicle ... gets to the first stop,” he said.

Mr. Moore has been in the business for 50 years. He has 26 buses that serve the Lake Forest and Milford districts.

He feels the state has left the contractors out to dry. Acknowledging he knows Delaware has faced some tough financial times, Mr. Moore believes more support is imperative.

Gov. Jack Markell’s recommended budget has contained no increase for contractors for all seven years of the governor’s tenure, a fact noted by Mr. Koppenhaver. His company operates in Milford and Polytech with 27 school buses.

Several smaller contractors who have only a few routes are in danger of folding in a matter of months, he said.

“I may have to look at that very real possibility, though that’s not something I want to do with 30 years’ investment,” he said.

According to the working group’s March report, there are about 160 contractors operating 1,200 buses, with another 470 or so run by the districts. If the state was to take over student transportation, it would cost more than $100 million.

The average contractor owns just a few buses and runs them as a side business, the report says.

“As operating costs have escalated over the years, the funding for contractors’ services has not kept pace — not even close,” the report reads.

The group’s report recommended both temporary relief for the current fiscal year and changes to the formula for the future. Much to the chagrin of operators, that did not happen.

While there are a number of items contractors would like to see altered, Mr. Moore hopes to see a change in how routes are measured. Calculating the distance driven from when the driver leaves the lot to when he or she returns would be an easy shift that benefits bus owners, he said. He’s also in favor of eliminating the 30-mile minimum.

In the past, contractors who made mid-day runs after their morning pickups would get a stipend. However, that has since been eliminated, Mr. Moore said.

History and impact

Bus contractors saw a 2.5 percent reduction in fiscal year 2010 due to a serious budget crunch. That was restored two years later.

“We kind of were forgotten until one of us said something,” Mr. Koppenhaver said.

A 1 percent increase was enacted in fiscal year 2015.

The gas allowance is down, a result of plummeting fuel prices. According to AAA, as of Friday, diesel had an average cost of $2.56 in Delaware. One year ago, it was $3.68.

Contractors receive or lose a cent for every 5 cents the price goes up or down, respectively. For now, the mileage rate is $1.37. It was $1.52 last year, Mr. Koppenhaver said.

“If fuel spikes this fall, we don’t get an adjustment till January. They say you get your money back in January. I can go freaking broke in three months!” Mr. Moore said with a sarcastic laugh.

Besides, he noted, gas is “the only thing that’s gone down.”

As buses have become more technologically advanced, maintenance has become more complex — and costly. Contractors have also had to make their buses environmentally friendly and keep more spare buses.

When a contractor buys a bus, they are paid back by the district over the course of seven years, Mr. Koppenhaver said. Once the contractor has been fully reimbursed, the annual allowance drops by about $12,000, he noted. In Maryland, many school districts continue paying at the same level, allowing the contractor to either make a greater profit or have more money to use for repairs, he said.

During an interview, Mr. Koppenhaver echoed themes he’d written about in a recent letter to the editor to the Delaware State News.

“I have devoted 32 years of my life to school busing. Despite all the issues and problems that we face, I still enjoy it and believe it’s my calling in life,” he wrote.

“School bus contractors are some of the most dedicated people you will find. We get up at 4 a.m. some mornings to check road conditions, have to jump behind the wheel at a moment’s notice to fill in for a driver, have to be ready to respond to a breakdown or accident and occasionally deal with an irate parent. It’s not for the faint of heart.”

The problems are at least relatively recent.

“The cost of running and operating these buses has grown substantially just in the last eight or so years,” Mr. Koppenhaver said.

Pearl Cole, president of B & P Transit, said she has not had any issues until the past year. She’s been in the business for 22 years, and her 12 buses transport students in the Smyrna and Polytech districts.

Without any raises this year, contractors are becoming hard-pressed to keep going, she said.

Some operators are also facing troubles hiring drivers. While what individual contractors pay drivers may vary, the amount provided by the state for that purpose does not, and so most owners pay about $15 an hour, Mr. Koppenhaver said.

The average driver works 15 to 25 hours per week, depending on the length of the route, he said.

Mr. Moore speculated the districts were looking to take over the routes to avoid the hassle of having to deal with contractors. Such a decision would carry a hefty cost with it and create additional headaches for schools and the state, however.

Another factor, one that may come as a surprise, is that there is generally no allowance for air conditioning. Contractors may pay for it out-of-pocket or transport children around in what can be an overwhelmingly muggy heat, Mr. Moore claimed.

“If you can’t let them ride in a comfortable environment then I see no reason why state employees and police officers have that luxury,” he said.

Contractors also do not get paid until school starts, meaning summer test runs are on their own dime.

Clearly frustrated, Mr. Moore said he could talk about the issues facing his company “all day.”

As for why he hasn’t left, it’s because no one will take on the costs of running the business, he said. Some people have been interested in taking over but cannot afford it, he said. He also acknowledged he has a passion for transportation — fitting, since he used to work for the Delaware Department of Transportation.

He has a meeting with the governor next month, although he acknowledged he had “no idea” what that will bring.

“We’re like the red-headed stepchild,” he said.

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