The report, which has not been presented to the Board of Education since it was received by the district in January, notes that the apparent discrepancy relates to the contractors’ classification, and the conditions under which that classification can legally be used by an employer for tax filing purposes.

The report was provided to The Bee in response to a Freedom of Information request. The newspaper learned about the existence of the report after the district announced it was soliciting interested parties to tender sealed bids for student transportation services for the 2012 school year.

That report, from New York-based Transportation Advisory Services (TAS) flagged the way Newtown’s current contract identifies the owner/operators as “independent contractors,” because the “district establishes strict work and performance rules” and the contracts provide for some defined benefits.

“The owner/operators are currently considered to be independent contractors, and therefore the district does not incur typical employee liabilities,” the consultant states in the report. “Although this certainly requires legal advice, based on our knowledge of other decisions in the school bus industry, and our reading of the IRS requirements, we are concerned about the independent contractor designation.”

The consultant then outlines a series of questions that help determine if the designation is legal:

*Does the company (district) control or have the right to control what the worker does and how the worker does his or her job?

*Are the business aspects of the worker’s job controlled by the payer? (these include things like how the worker is paid, whether expenses are reimbursed, who provides tolls/supplies, etc)

*Are there written contracts or employee-type benefits (i.e., pension plan, insurance, vacation pay, etc) Will the relationship continue and is the work performed a key aspect of the business (district)?

The consultant then confirms that the district establishes specific routes, tells the operators when to leave, when to work, and determines the schedule. The owner/operator’s contract establishes strict work and performance rules.

The contract, according to the consultant, establishes the terms and conditions of the work to be performed. The report identifies that the district provides liability insurance, offers the owner/operators buy-ins to the district’s employee health plan, pays for drug tests and CPR training, as well as some equipment required on the privately owned buses.

The concern about possible IRS conflicts is cited as one of the two stated factors for TAS to recommend against continuing with the owner/operator system once the current contract expires in June 2012. The other is owner/operator pricing compared to several school districts that provided transportation cost information to the consultant.

The consultant concluded that based on a comparison of several other districts with similar demographics and owner/operator contractors, “the Newtown contract cost significantly exceeds all other districts,” and “the owner/operator contract is higher than what can reasonably be expected in an open market bid/RFP.”

The report compares Newtown’s contractor services and costs with Region 9 (Easton/Redding), Granby, Farmington, Greenwich, Amity (Bethany, Orange and Woodbridge) and South Windsor.

Messages Of Support

Since coming to light May 25, a number of parents and residents have posted messages of support on a social networking site established by the local owner/operators. Several others have reacted to the original story after it was published in The Bee that day.

Dawne Killing-Kornhaas said, “This system has been working beautifully for Newtown for decades. My parents had o-o when they went to school here, I had o-o when I went to school here and now my children have o-o for their bus drivers. I wouldn’t let my kids get in a car with a stranger, why would I let them get on a bus with one?”

Sarah Burns Beedle commented, “I like the owner-operator system. I have also had these same bus drivers plus a bunch more (Phil Carroll and Charlie Rudolph to name some more). They all treated us like we were their own kids which makes a difference.”

According to one of Newtown’s owner/operator bus drivers, Carrie Schierloh, she learned about the district’s move to invite commercial bus companies to bid on transportation services when she arrived home from her student bus runs on the afternoon of May 25, several hours after the bid notice was placed.

A provision in the bid stipulating bidders provide a bond in the amount of ten percent of the first year’s contract price may be a difficult hurdle for some individual owner/operators to clear. Ms Schierloh said, however, that she is hopeful that the district will consider a competitive offer from the independent local drivers.

She told The Bee June 1 that “we’re not giving up. The owner/operators are planning to make a proposal [to continue services].”

Other Bid Specifics

A majority of local bus runs are currently made by Newtown’s owner/operators, who in effect, operate as independent standalone small businesses. The “o-os” as they are sometimes called, had negotiated a contractual agreement with the district that expires at the end of the 2011–12 school year.

The issue of whether the district could save money by contracting a single transportation service versus the independent operators has been questioned in the past.

The five-year contract with owner/operators that expires June 30, 2012, contains a number of stipulations, including the town carrying liability insurance, while drivers pay their own workers comp and collision coverage.

By contract, the town also pays for the fuel, drivers take care of all the maintenance.

According to the notice, the district “invites the submission of sealed bids from reputable and qualified bus transportation companies for furnishing student transportation services in Newtown public schools beginning July 1, 2012.”

Forms for bid, certification, conditions, and specifications were made available at the district offices on May 31. Bids will be received until 2 pm on June 23, at which time and place all bids will be publicly opened.

The district is requesting bids for the provision of home-to-school transportation for a contract period of five years. Bidders are required to furnish, at their own expense, a bid bond or certified check in the amount of ten percent of the proposed total annual first year price of the total contract.

A bidder’s meeting has also been scheduled for June 7 at 2 pm at the Newtown Municipal Center.