The following chart shows Hawaii Island’s history of regular education and special education school bus contract cost trends. Each line represents the per-day cost history of a particular contract. Of particular note are instances where the slope of the contract cost line increases dramatically. Those are instances where significantly higher daily rate costs began after contract renewals.
By COLIN M. STEWART
Tribune-Herald staff writer
A comprehensive study of the state’s school bus transportation system released Friday by the Department of Education calls for an extensive overhaul if the system is to be sustained financially.
“The analysis indicates that virtually every aspect of the student transportation program in Hawaii requires some degree of reform,” wrote Thomas W. Platt, president of Management Partnership Services Inc., the company that performed the study, in a letter to the Department of Education.
“Successful implementation will require a long-term commitment of time and resources. It is our contention, however, that successful implementation of the recommended reforms will transform the delivery of student transportation services, reversing the escalation in costs and vastly improving service quality.”
The DOE ordered the study in August to determine what led to wildly escalating costs by school bus contractors, and to investigate ways of improving efficiency, according to a Friday release from the department.
“This thorough review was necessary to clearly identify missteps taken over the years so that they are not repeated,” said Superintendent Kathryn Matayoshi. “The recommendations on the path forward are equally important as we implement both short- and long-term changes.”
The DOE’s school bus transportation system serves more than 35,000 students annually through 700 buses operated by 12 contractors on five islands: Kauai, Oahu, Maui, Molokai and Hawaii Island. Shortly before the beginning of the current school year, the state announced it was cutting more than 100 bus routes in order to save money in the short term, due to budget cuts and funding shortages.
East Hawaii escaped the cuts unscathed, but West Hawaii lost routes contained within a single Waikoloa subdivision, said Board of Education member Brian DeLima, who represents the Big Island. The DOE streamlined services and restored a number of routes across the state, but was unable to restore all of them. In all, more than 2,300 students at 51 different schools were affected.
DeLima said the BOE is set to discuss the transportation report on Tuesday at a special informational meeting. He added that he was largely happy with the strategies identified in the report.
“We all agree that there were systemic problems within the administration of the bus service department, and we’re glad that it’s now been identified,” he said.
Among the points that he found particularly important was the study’s finding that a plan for the state to purchase its own buses is not an economically viable option.
“They also found that buying and then leasing them out to contractors was also not determined to be prudent. Both those options were ruled out,” DeLima said.
He added that much of the report focuses the state’s handling of the way contracts are put out to bid to contractors.
“There have been a lot of criticisms and critiques about that,” he said. “… In my own, independent analysis of contractual provisions, as a lawyer, I was shocked and dismayed by the way it has been done. I’ve been very critical of it. This confirmed my own findings.”
One area the study did not touch upon is a plan DeLima thinks could have a big impact on costs.
“The shortcoming in the study is that I don’t think they analyzed the options to modifying the start and end times of school to provide immediate savings,” he said. “That way, they could utilize the buses for more than one route, consolidating routes, possibly. That’s something I’m going to be asking questions about.”
Some of the study’s recommended changes will require the upcoming 2013 Hawaii Legislature to address potential revisions to the Hawaii Revised Statutes that govern school bus contracting laws.
“We will be briefing the Legislature on this recommendation in changing the law to improve the procurement process,” Matayoshi said via a press release.
The MPS study found the entire student transportation services program is in need of systemic change; specifically in areas that address costs, procurement, organizational structure and technological upgrades for monitoring and support.
Among the findings:
l There is a lack of cost data to do year-over-year studies. However, most glaring is that the costs of school bus transportation in Hawaii are among the highest in the nation at $86,500 per active bus route, and about $1,750 per transported student. Dramatic cost increases between the 2006 and 2010 fiscal years were largely attributed to higher rates paid to bus contractors. The increase in rates in fiscal year 2011-12 did not subside, but leveled as a result of fewer routes.
l Procurement and contracting practices are inefficient with the absence of competitive bidding due to the constraints in the procurement process itself. Furthermore, efficiency of the bus contractors should be better clarified along with service requirements to support improvement recommendations.
l The DOE’s student bus transportation staff needs to be “realigned,” and receive training and improved support to administer vast responsibilities of a $60 million annual budget.
The report also noted Hawaii’s unique geography and relatively closed market as additional constraints to the procurement system. Specifically, MPS is recommending that the DOE pilot a revised business model next school year (2013-14), and execute a revised competitive procurement process for contracts in the 2014-15 school year.
“Our commitment is to our students’ ability to learn,” said Raymond L’Heureux, assistant superintendent for the DOE’s Office of School Facilities and Support Services. “Getting them to school in the most efficient, safe and timely manner is a high priority.”
The MPS Study will be presented at the BOE’s Informational Briefing on Tuesday in Honolulu.
Email Colin M. Stewart at firstname.lastname@example.org.