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District finalizes new transportation contract

FAIRBANKS - Fairbanks North Star Borough School District issued a Notice of Intent to Award Contract for Pupil Transportation Services on March 25 to sole bidder, First Student. The contract will be before the Fairbanks North Star Borough School District Board of Education for consideration during their April 5 regular meeting. Under the new five-year transportation contract, the cost for providing school bus service for the 2016 – 2017 school year is expected to reach approximately $14 million, $1.88 million more than the anticipated transportation funding from the state.


The district’s existing contract was due to expire in August 2016, but included an optional five-year extension. In response to state statute amended by the legislature in 2012, the Alaska Department of Education and Early Development urged districts to reduce overall costs of pupil transportation. The district cooperated with state requests to solicit bids for a new contract.


“Given the circumstances, we negotiated the most responsible contract possible,” said Lisa Pearce, chief financial officer for the school district. “Considering the concerns regarding state funding, we felt we should follow the direction of the legislature to demonstrate our commitment to containing costs.”


The state efforts to trim costs focused on attracting more competition in the bidding process and reducing risk for contractors. Large districts were asked to coordinate their transportation contract solicitations and to seek a contract term of 10 years to appeal to more competing businesses. Districts were encouraged to subsidize or provide fuel for the buses to reduce risk for potential bidders. The state also facilitated site visits in Alaska for several vendors in 2014 to encourage more interest in bidding on the contracts.


The Fairbanks school district collaborated with the other large districts, but still received only one proposal for the contract. Next school year, the district will pay First Student $73,152.42 per day, about $2,000 more than the current total daily cost. The school district will also pay for the fuel to run the fleet.


The daily service includes 93 regular routes with a daily rate of $465.80 and 44 special education routes with a daily rate of $618.40. Regular route buses will be equipped with automatic chain sets and video cameras. Special education buses will also have automatic chain sets and be staffed with an attendant in addition to the driver.


Minimum wage increase was a significant cost driver in the rates for the new contract. Alaska state law requires the starting wage for school bus drivers to be double the state minimum wage.


The district secured a provision in the contract to maintain a full suite of liquidated damage assessments, allow termination of the contract without cause, and have the option to purchase First Student’s fleet in the event of contract termination. The district anticipates receiving $12.2 million from the state of Alaska for next year’s pupil transportation program. The district will need to draw $1.88 million from the fund balance and operating fund to cover the expected busing expenditures for next school year.

Sharice Walker