Jul 30, 2014
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Board of Ed Chooses All-Star

The Board of Education awards five-year school bus contract to All-Star, cites deficiency in owner-operators' bid submission.

Board of Ed Chooses All-Star

Ending a generations-old tradition of having townspeople own and operate Newtown's school buses, the Board of Education voted Tuesday to award a five-year contract to Torrington-based All-Star Transportation.

The decision capped a months-long and emotion-ridden process that pitted the last known owner-operator system in Connecticut against several large school bus companies bidding for a transportation contract worth more than $10 million. The contract would take effect starting next year.

"This is the most difficult decision in my 20 years of serving on various boards and commission," education board member Andy Buzzi said. "The decision has placed me in an impossibly difficult situation and will affect me for a long time."

In the end, while the cost differential of $1.5 million between All-Star and the owner-operators was mentioned as a reason, the more pressing issue appeared to be what one board member described as a "fatal deficiency" in the owner-operators' bid submission.

"The owner operators failure to follow the roadmap the board provided in the Request for Bid has resulted in a fatal deficiency in their submitted bid," Buzzi said.

The issue, according to board members, stems from advice given by district lawyer Floyd Dugas, who said that maintaining multiple school bus contracts might be construed as violating anti-trust laws and price fixing. He recommended the town maintain a single contract.

"Attorney Dugas addressed this board at a public meeting and cited the significant exposure this district will incur if we were to continue under separate contracts," Buzzi said.

At the time, Dugas was evaluating a state Board of Labor Relations complaint the owner-operators filed against the school board. Through his analysis, he  determined that the owner-operator system "may place the town in significant liability risk," according to education board Chairman Bill Hart.

"The legal complexities have been highlighted by the complaint the owner operator filed with the state labor board," Hart said.

The complaint alleges that the owner-operators were in fact employees of the district, and as such, have had their collective bargaining rights violated.

While the district argues the owner-operators are independent contractors, the arrangement of maintaining separate contracts with several vendors who set a price among themselves may be construed as "price fixing," .

Buzzi said that the owner-operators could have avoided the "fatal deficiency" by forming a company as in the case of MTM and McCutchan Transportation, which have separate school bus contracts respectively for special education and athletic and other special events. A handful of owner-operators got together to form those business entities.

Hart also said the difference in the safety record on paper of the owner-operators and bus companies bidding on the contract was a factor.

"It's pretty clear that individually they are struggling to stay on top of the technical and legal issues of running a bus these days," Hart said of the owner-operators. "For the last three years, they have...one of the worst records as a group of any bus operation in the state in terms of passing safety inspections. Over the past five years we have had to terminate three of them for gross violations – safety violations. They aren't immune to the problems any organization struggles with."

At the same time, while All-Star, which also operates buses in Brookfield and New Milford, has one of the best mechanical safety records on file with the Department of Motor Vehicles, the company also .

Board member David Nanavaty was one of the few to bring up the cost differences in the bid as an issue.

"If the owner operators bid was just a little bit more, it might be worth staying with the owner-operators," he said. "But the percentage by which All-Star competes with the owner-operators does not make...a taxpayer in Newtown comfortable that we are going to pay more than our neighbors for transportation."

Board member Debbie Leidlein cast the sole dissenting opinion, calling on the board to postpone awarding the contract because too many legal uncertainties exist regarding the labor complaint. She said the legal opinion and ramifications of the complaint were not explored until much later in the process.

"That information was not shared with this board in its entirety until after the bid was given out," she said. "I'm not comfortable making this decision going forward."

But fellow board member Keith Alexander said officials need to be prepared in case the labor board rules in favor of the owner-operators and determines they are in fact employees, in which case the district would need a company such as All-Star to come in and provide the buses and infrastructure. In that scenario, the owner-operators would be district employees and drive the All-Star buses.

"Given the existing conditions of the possibility that the owner operator will become an employee required to report to the town, I feel we have to support that possibility," Alexander said. "So I think we have to choose something and move on here."

Board member Richard Gaines said officials need to make good on their policy of putting high-ticket-price services out to bid.

"The long of the short of it is we are following the bid process," he said. "Instead of sitting by the sideline and waiting for something to happen, I believe we need to move forward and selecting a transportation provider for the next five years."

The vote was 5 to 1 with Leidlein voting against the contract award and board member Lillian Bittman not present and traveling due to a death in the family.

Owner-operator Beth Koschel said she was disappointed in the decision, though not surprised.

"I don't know what the next move is," she said, adding if her time as an owner-operator was to come to a close, she at least had another year to consider her options.

Koschel said the owner-operators did not have enough time this year from when the request for bid was published in the newspaper and the submission deadline to form a company, and even if they had time, it was unclear whether they would.

"I never considered it that way," she said.

This year's bid process was a departure from the past and the requirement for a single business entity also was a break from tradition, Koschel said.

"It's always understood that's what worked here, that's what was wanted," she said of the owner-operator system.

Editor's note: Watch snippets of some of the discussion in this article:

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