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Sunday, July 28, 2013

Not so fast, buster

The cost of busing kids to school is driving school districts to distraction. I have previously reported on the problems experienced in Canada.

In New York State, according to School bus costs called the first in line,
School districts in the state spend $1,141 per student on transportation, which is 149 percent more than the national average of $459. The amount has more than doubled in the last decade alone, the report found. In 2010, New York schools spent $3 billion to transport students, compared to $1.5 billion in 2001.

The commission report found that New Jersey spent $908, the second highest amount of money transporting students. By contrast, Massachusetts spent just $592, the 13th highest, and California was last on the list with $238 in annual expenditures.
The Honolulu Civil Beat has done a an extensive study of Hawaii school bus costs, with a timeline analysis and comparison going back several years. The study is set out in a series of reports reported here: Taken For a Ride — Series on Hawaii's School Bus Costs.

One of the reports, Taken for a Ride: Hawaii's Runaway School Bus Costs, written in 2011, brings it all together.
Hawaii is spending $1,850 per student on school bus transportation this year — more than twice the national average of $900 in 2008, the most recent year reported. In 2008, Hawaii averaged about $1,200 per student.

Civil Beat analyzed hundreds of bid documents spanning 11 years and found that competition among school bus contractors came to an abrupt halt in 2008. In fact, while educators and lawmakers have been bemoaning the cost increases and questioning whether lack of competition was the cause, in the last four years, not a single regular school bus route in Hawaii has drawn competitive bids. Over that same period, the department hasn't rejected a single bid, as is its right, to try to get a better price for taxpayers. [See my prior post, "The dilemma of "only one bid received".]

In 2007, the last year there were competitive bids, more than half of the 116 routes up for grabs had more than one company vying for them. The competitive bids averaged $49,000 per year, while the average non-competitive bids were slightly higher, at $53,000. In 2008, when all 12 bus contractors mysteriously stopped bidding against each other, the average price of the more than 136 routes up for bid skyrocketed to $86,000 per year — an overnight increase of nearly 70 percent.

By the department's own figures, the state's school bus costs have been on a runaway path since 2005. This year they are more than double that year's $34 million price tag, at about $72 million, while the number of riders has remained flat, around 44,000. Routes haven't changed much either.

"The lack of any competition doesn't pass the smell test," Rep. Marcus Oshiro said. "We've known for a while that something's not right here, but you can't quite put your finger on it."
Civil Beat put a finger on it: "Simple Equation: Less Competition = More Costs"

Meanwhile, back in New York, the are Breaking up big busing.
Atlantic Express controls the majority of the kindergarten through 12th grade busing in the city and is the third largest provider of student transportation in the U.S., with contracts with about 100 school districts all over the country. In New York City, Atlantic Express’ Amboy Bus Company unit is the beneficiary of the city’s largest single busing contract, with $213.9 million spent on the company for special education and $317 million for general education busing in the first nine months of fiscal 2013.

At the company’s founding in Staten Island in 1972, it had just 16 school buses. Today, it operates between 4,000 and 5,000 vehicles in five states and employs nearly 10,000 drivers, escorts, mechanics and support staff, according to its website.

Under the city’s new competitive bidding process, much smaller bus companies with cheaper labor costs severely underbid the behemoth operator. In the first round of competitive bidding, Amboy was outdone by every other competitor. For one 185-bus contract, the median bid was 36 percent below Amboy’s, while the lowest bid was 63 percent lower. If the next two rounds of bidding look similar to the first, New York City taxpayers could potentially save more than $300 million a year, out of the $1.1 billion the city currently spends, as a result of the new bus contracts.

That would reduce the average cost of transporting a student down to about $5,300, down from more than $7,000 per child.

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