Thursday School Bus Contract Vote

Cancelled Hours Before Meeting

By John Voket

A special meeting set for Thursday, August 25, at which Board of Education members were expected to vote on a future town school bus contract was cancelled by Superintendent Janet Robinson just hours before its scheduled start. When asked why The Bee was told the superintendent gave no reason for the sudden change of plan.

The cancellation, however, may have had something to do with a closed special session of the Board of Selectmen the night before that was attended by members of the Legislative Council and the Boards of Finance and Education. Since it was a closed session with no vote or action taken, there was no further information coming out of that session.

The brief agenda was going to allow for public participation before the board took up final deliberations that could have spelled the end to an 80-year tradition of Newtown residents operating their own buses providing the bulk of the town’s student transportation. The lowest qualified bidder, at just over $10.2 million for the five-year contract, is All-Star Transportation.

The collective owner-operators tendered the fourth lowest bid at $11.7 million, with the First Student Transportation bidding just over $11 million and DATTCO presenting an $11.4 million bid. It also appears that while All-Star has fulfilled all the bid qualifications, the owner-operators have not — requesting a waiver of both a bid bond and performance bond that were required in the pre-bid specifications.

According to Town Finance Director Robert Tait, the failure of the owner-operators to fulfill all the bid specifications means their bid is not qualified, a point that was confirmed by school district Business Manager Ron Bienkowski last Friday.

Prior to the anticipated meeting, current and former elected officials as well as an aspiring school board candidate outlined a number of outstanding concerns about the pending school board decision and process.

First, the owner-operators are still supporting a State Board of Labor Relations complaint alleging the district has violated the Municipal Employees Labor Relations Act (MELRA).

The complaint, issued by attorney Henry F. Murray, alleges a violation of Section 7-470 (4) of MELRA in that the board has failed to bargain with the owner-operators through their elected contract committee with respect to its decision to subcontract school bus driving responsibilities.

That labor complaint hinges on three points: whether the owner-operators are employees and not contracted individuals; whether a committee representing the local drivers that has met with the Board of Education over the years to negotiate contracts is a labor union; and whether it was unfair for the board to seek outside services before bargaining with the owner-operators.

An attorney representing the district said the complaint has raised a number of questions, including whether individual owner-operators can contract with the school board without having the situation be considered “price fixing.”

Gaston Flags Risks

The outstanding labor complaint is the focus of recent letter to the school board from attorney and local Board of Finance Vice Chairman James Gaston. Mr Gaston, a current Democratic candidate for the Board of Selectmen, asserts that the imminent action by the Board of Education on the bus contract combined with the outstanding and unresolved labor complaint exposes the town to significant financial risks if that complaint is not resolved prior to, or at the time of, any acceptance of bids.

“If the O-Os are determined [to be] employees through the Department of Labor, and/or by way of class action for which they qualify, the Town/BOE would be liable for back $$ of health insurance, unemployment, workers’ compensation, FICA, Social Security, State taxes, etc,” Mr Gaston wrote. “If we are looking at some very simple numbers of $20,000 x 30 bus drivers the cost would be an annual $600,000.”

Mr Gaston noted that there is a six-year statute of limitations for written contracts. So applied to the local situation, six years x $600,000 = $3.6 million.

“Of course, this doesn’t include the attorneys fees and trial costs that would likely run at least $500,000,” he added. “This expenditure far exceeds any bus company savings, and no doubt this money won’t be added to the education budget but will actually result in additional education programs being cut to pay for it.”

(A copy of Mr Gaston’s letter in its entirety can be found in the Source Files on NewtownBee.com in the Board of Education folder.)

Mr Gaston also said that legal case law analysis members of the school board are quoting regarding the board’s option to dismiss all bus bids and start the process over “is inaccurate and in some instances plain erroneous.”

“A BOE member has put out a statement that treating one bidder as a favorite would make the Town/BOE ‘liable.’ This is inaccurate,” Mr Gaston stated. “No unsuccessful bidder has standing to sue except for injunctive relief, and only if corruption, fraud, or undue favoritism is found.”

Mr Gaston said, “Either the bids should all be pulled and a one-year contract awarded to O-O and the business status of the O-Os be resolved, or further open negotiations with the O-Os be ensued, which include affidavits and stipulations from all O-Os’ drivers that they are independent contractors, and the award go to the O-Os.

“Any other outcome is likely to cost the Town/BOE millions of dollars that will result in further reductions of educational programs, sports, etc,” he concluded. “The exposed financial risks to the Town/BOE are valid cost considerations in the bidding process and decision of which bus system is best for Newtown.”

‘Conversation Starter’

At the same time, Republican Legislative Councilman George Ferguson has contacted the school board with what he described as a “conversation starter” he hoped “will pique some discussion around the potential economic impacts of the decision” to eliminate the owner-operators system in favor of bringing in a school bus company.

(A copy of Mr Gaston’s letter in its entirety can be found in the Source Files on NewtownBee.com in the Board of Education folder.)

Mr Ferguson noted that 31 of the 33 owner-operators own a home in Newtown, and all of the drivers who work for the owner-operators as substitutes are Newtown residents, except for one who lives just over the Bethel-Dodgingtown line.

He said several of the owner-operators own a second business in town, further contributing toward the Newtown tax rolls, along with taxes paid on their homes, personal vehicles, buses and personal property connected to their bus business.

“Assuming the 31 homes pay [an average of] $7,000 a year in property taxes to the town, they will yield a total of $217,000 per annum; more than 70 percent or $151,900 per annum goes towards the schools system,” Mr Ferguson stated. “Over five years that would be $1,085,000 and $759,5000 respectively.”

In addition, he pointed out that the O-Os pay income tax to the state, some of which eventually comes back to district through the educational cost sharing (ECS) grants.

“In addition to property and income taxes, the O-Os spend much of their disposable income in town for goods and services and this in turn helps other businesses in town generate sales tax revenue,” the councilman added. “Expenditures in town are subject to a multiplier effect as these other businesses repeat the same process. In economic analyses that I’ve seen, seven has been often been used as the multiplier. This means each dollar paid to a local owner-operator moves around the local economy about seven times expanding its economic impact on the community by a similar factor.”

Mr Ferguson said the actual numbers of taxes paid by the owner-operator families is a matter of public record and available through the town’s assessor and tax collector.

Strike Threat Cited

Dan Shea, Sr, a Democratic candidate for the Board of Education also contacted The Bee this week with concerns over the potential of a driver strike if the school bus contract is taken from the owner-operators.

“All-Star transportation already (2007) has battled a strike in New Milford, primarily over wages and benefits,” Mr Shea wrote in a letter to the editor. “Strikes not involving All-Star have also occurred in Greenwich and Shelton within the past eight years. Those also dealt with wages and benefits.”

Flagging the disruption strikes have on the educational process, Mr Shea suggested “the vast majority of Newtowners would shiver at the thought of a strike shutting down our schools, which most definitely could occur if the selection of All-Star were accepted by our board.

“We can swallow hard, cross our fingers, and say we will take that risk, or we can weigh the pros and cons, evaluate the problems such a pact could spawn, and consider another road to take: the tried and true approach with the owner-operators, who would continue to bring stability and peace of mind to parents, students, and educators, alike,” Mr Shea concluded. “Owner-operators will never go on strike. Never! They own the buses and are the drivers of those buses.”

A final point of concern was registered by former first selectman and school district staff bus driver Joe Borst, who has remained concerned about a technical adjustment made to the All-Star bid after it was opened, that effectively changed All-Star’s offer from $11,723,908 to $10,207,896.

Mr Bienkowski previously told The Bee, “The bid wasn’t reduced.” Mr Bienkowski said the “actual number was different,” because the original bid was calculated from a worksheet that did not factor a June 17 addendum, which reduced the number of vehicles required to fulfill the bid specifications.

In a letter to the school board, Mr Borst contends that All-Star was contacted by Mr Bienkowski four days after the bids were opened about its failure to use an updated evaluation sheet that reduced the number of buses required by five, resulting in a new undated and unsigned contract analysis sheet being inserted in the company’s bid package.

This change generated a $1.5 million reduction to All-Star’s original offer.

“Paragraph 8 of the instructions to bidders in the bid specs states ‘The School District reserves the right to reject any late submissions and is not responsible for notifying the bidder of any missing elements of the bid,’” Mr Borst writes. “I would suggest that the aforementioned action might be considered showing ‘favoritism’ to All-Star.”