Districts see savings with transportation change

HANCOCK – Three years ago, the members of the Hancock Public Schools Board of Education contracted with R&A Transportation to bus students. At their Nov. 18 regular meeting they approved another three-year contract with the company, but the vote wasn’t unanimous.

Monica Healy, school district superintendent, said the decision by board members three years ago to end the district’s busing service and contract it out was made because they saw it as a way to save money and reduce the district’s deficit.

“We were looking at every avenue of saving money,” Healy said.

Other local school districts in the Copper Country Intermediate School District had already switched to R&A Transportation, which is based in Iron Mountain, and Healy said she heard from other superintendents they were saving money by privatizing the bus service.

Discussions by the Hancock Board of Education actually started in 2005 during the tenure of her predecessor John Vaara, Healy said. A Wisconsin-based company was considered but it was determined there would be no savings.

Healy became superintendent in 2009. During the 2010-11 school year, she said, board members began discussing whether privatizing busing would save the district money.

“We started looking at the fact we would have to replace buses,” she said.

There were six Hancock Public Schools bus drivers at the time the first contract with R&A was signed, Healy said. The first year of the contract, some drivers were hired by R&A, and others took other jobs with the school district.

“Nobody lost their job,” she said.

Healy said how much the district spent on busing depended on several varying factors, such as whether new buses needed to be purchased and how much was spent on fuel and maintenance. The known costs were wages and employee retirement costs.

However, Healy said from the first year of privatization on, the cost savings have been $30,000 to $40,000 per year.

Healy said the six buses the district owned at the time of the first contract with R&A were leased toward purchase to the company. Those buses are now owned by R&A.

“We won’t get that (lease) payment anymore, but we aren’t expending anymore,” she said.

During the board discussions about privatizing busing in 2011, some of the drivers and some parents of students in the schools attended board meetings to urge board members to keep the district’s drivers and bus system. The only board member to vote against privatization then was Chuck Paoli, who also voted no Nov. 18 for the renewal of the contract with R&A through the 2016-17 school year.

“I’m just not a person that supports privatization,” he said. “I have concerns about what’s going to happen to the rates.”

Although he trusts the former Hancock bus drivers who are now working for R&A, Paoli said he’s concerned about the reliability of future drivers since they will be part-time.

Jan Quarless, superintendent of the Dollar Bay-Tamarack City Area Schools, said in 2007, it was the first district in the CCISD to contract with R&A.

Much of the impetus for considering privatization had to do with the district’s four buses.

“Our bus fleet was getting old,” he said. “We weren’t in a good financial condition to buy new buses.”

Some of the drivers for the district at the time of initially contracting with R&A were retained in the district on the custodial staff and two retired.

Quarless said from the first year of change to R&A, the district has saved $15,000 to $20,000 each year.

The board of education renewed the contract with R&A two years ago, Quarless said. The current contract runs through the 2017-18 school year.

Tim Keteri, superintendent of the Adams Township School District, said that board of education made the switch to R&A six years ago, and it has been beneficial for the district.

“The savings is significant,” he said. “More money has gone into programing.”

Keteri said the savings the district has experienced include driver wages, new bus purchases and bus maintenance. There were also savings from driver benefits and retirement costs.

“That’s a huge savings,” he said.

The board of education members renewed the contract with R&A two years ago for five years, Keteri said.

“It was a good financial decision (to privatize transportation),” he said.

George Stockero, superintendent of Chassell Township Schools, said the switch to R&A was made in 2010. The board members renewed the contract in 2012 until 2016.

Stockero said using R&A helps stabilize the district’s transportation costs.

“We know what our budget is,” he said.

Stockero said the district is saving $13,000 every year with the switch to R&A.

“We are very happy,” he said.

Doreen Klingbeil, superintendent of the Houghton-Portage Township School District, said that district switched to privatized busing four years ago. They renewed the contract two years ago for five years.

The savings to the district since the change have been about $130,000 per year, Klingbeil said. That includes the cost of possible new buses, wages and benefits, maintenance, and fuel.

When the initial change was made to R&A, Klingbeil said some of the district’s drivers retired and some went to R&A.

“We didn’t have to let anybody go,” she said.

Klingbeil said the bus service will be evaluated each year, but so far she and the board members have been happy with R&A.

“We’ve been pleased with the service,” she said.