North Penn Vetting RFP Responses for School Bus Firm

Could the North Penn School District switch to a different provider for some of their school bus runs starting next school year?

School board members heard an update last week about an RFP for district transportation services that could lead to a school board vote soon.

"During this process, we had about six companies submit inquiries, asking questions about the RFP, and we wound up getting three responses back,” said district Assistant Director of Business Administration Ron Linke.

Each year, district transportation staff report on the 100-plus buses and other transportation vehicles owned by the district, ongoing projects like an initiative to convert their diesel fleet to propane, and technology upgrades such as the "Here Comes the Bus” tracking app and "Bus Patrol” camera system meant to capture traffic violations. In 2019 the board also approved a five-year contract with First Student Transportation, a nationwide firm that handles some public and non-public bus runs for the district, after that company opted out of a prior agreement in early 2018.

That five-year deal is now nearing its end, Linke told the school board’s finance committee on Tuesday night, as he, Coordinator of Transportation Dennis Ryan and CFO Steve Skrocki outlined the responses to an RFP for firms interested in a new contract. Responding firms were asked to give costs and specifics for a five-year term with possible option years afterward, with propane buses preferred but not required to maintain flexibility, and with specifications that the company must have a facility in the area to store and maintain their buses, Linke told the board.

Three firms replied to the RFP: current carrier First Student, western Pennsylvania-based Easton Coach, and Canada-based Class One, and staff are currently vetting the details of their responses. Proposed prices for the first year per bus run included in those RFPS were $400 per run from Class One, $457 from First Student and $493 from Easton, but cost is far from the only factor being considered.

"In June of 2022, First Student was able to inherit a fleet of propane buses, which significantly turned over the number amount of propane buses that are transporting students every day. Right now, 83 percent of their bus routes are currently operating on propane,” Ryan said.

While First Student does maintain a local facility, Class One’s nearest facility is in Philadelphia, roughly 30 miles from North Penn High School: "about 60 miles per bus, per day, would greatly affect the subsidy and fuel consumption” costs the district typically covers, Ryan said.

Easton Coach also does not have a facility available within the district, and did submit a list of sites they were investigating, but some of those properties were sites the district has already investigated, as they look for a site to move the district’s in-house bus garage, maintenance and dispatch center away from the North Penn High School campus ahead of renovations there.

"Everybody knows that we are currently looking for a facility for our own transportation, and the addresses (of potential sites) that were provided were addresses that we were not able to acquire either,” Ryan said.

Staff are continuing to vet the responses, and aim to make a formal recommendation to the board in February so a contract can be finalized in time for the 2024-25 schoolyear, the head of transportation told the board, and Skrocki said add-ons including "Bus Patrol” and "Here Comes the Bus” would be included in the contract terms. Linke added that based on the RFP responses, recent driver shortages and the corresponding higher wages meant to attract new ones, have meant a private firm may no longer automatically have lower costs than the district.

"The spread, if you will, between the costs for contracted service and in-house operations, is shrinking to almost eliminated now. For example, the current cost of in-house transportation is $397 a day. We currently pay $367 for First Student, but based on First Student’s first-year response, they’re at $457” per bus run, he said.

"So it may behoove us to start looking into maybe bringing back some of those runs over the years, to maybe bringing them back in-house over the years,” he said.

Skrocki added that the district historically maintained about 30 bus runs operated by a private firm, "but because there was a big delta over the years” between private and district costs, more runs were shifted to First Student over time when their costs were lower thanks to pension and medical benefits the district provides and private firms do not. As of the current schoolyear, 35 private and 23 public school runs are now operated by the private company, and the RFP responders may be asked to slowly shift some of those bus runs back to the district over time.

"You have to balance that against certain things: to land 58 buses in a matter of six or seven months, at a cost of $125,000 a bus, is not very likely. It would have to be done through attrition, but those are some of the things we’re analyzing that’ll be part of the recommendation in February,” Skrocki said.

Finance committee chairman Christian Fusco asked about the last round of negotiations with First Student, and if that situation could occur again. Skrocki explained that the 2019 contract was negotiated after an RFP due to First Student opting out of the prior year contract, but during COVID-19 the company asked the district to pay employees who weren’t driving buses while schools were closed.

"There was some back-and forth-regarding that, and we basically said ‘We’ll comply with the terms of the contract, we’re not going to be extending any other financial considerations beyond what’s in the contract,” Skrocki said. The district did agree to an added payment of $15 per day per bus when First Student acquired the propane buses in 2022, and that cost "paid for itself” in lower fuel charges by shifting from diesel to propane, he added.

Board member Jonathan Kassa asked what due diligence staff would do on the two new firms, and Skrocki said vetting their backgrounds and financials would be part of staff’s considerations before making a recommendation. Board member Elisha Gee asked if the RFP assumed the same number of bus runs or decreases, and Skrocki said the total of 58 bus runs — which Ryan said are just below half of the district’s 126 total bus runs — would likely decrease over time. Gee answered that, as a parent, she’d prefer the district and its drivers handle as many runs as possible.

"They’re carrying our very precious cargo, our students. It’s not like just moving a box around. The drivers in-house get to know the students, and they’re part of the district, and part of the school community. There’s just a layer of comfort, I think, for families there,” she said.

Prior to Covid, Skrocki answered, wages paid by private firms "were much lower than our wages,” but the pandemic-era shortages of drivers led those firms to "dramatically increase” their pay to attract drivers. Gee said she’s seen that trend in other service fields too, and Skrocki said the flexibility in the RFP process instead of a formal bid would allow staff to negotiate those details before a final contract is presented to the board.

"It is not a bid, where we are required to take the lowest-cost proposal. It’s a professional service, so we want to make sure we have the best overall package,” he said.

School board member Kunbi Rudnick asked if staff had considered any hybrid option using two of the companies, and Ryan said staff would prefer not to, due to the flexibility and ease of communication between one firm and their counterparts in the district; Linke added that he’s worked in a prior district that had eight such contractors.

"That causes a lot of logistical issues. When the schools are calling to say ‘Where is a kid?’, the contractor says ‘You’re calling the wrong contractor, call this contractor.’ It causes a lot of issues,” Linke said.

Superintendent Todd Bauer added that administration is easier for disciplinary issues, weather delays, or other emergencies when staff only have to work with one firm.

Fusco said he’s heard of other districts where private firms have been so short on drivers that students end up waiting nearly an hour after school for a bus, and Skrocki and Ryan said they’ve seen minimal such problems with First Student, and district staff and drivers can fill in if needed and deduct those costs from the firm’s payments.

"If we get a day where there’s five call-outs, I don’t mind going out on a bus and picking up students myself. It comes down to how we have our current transportation modeled, basically half and half, if First Student can’t help out, for whatever reason, then we can step in,” Ryan said.

No formal action was taken by the finance committee, and Skrocki said he and staff would make a recommendation at the next finance committee meeting on Feb. 6, while the transportation department will present their 2024-25 budget to that committee on March 19.

For more on the North Penn transportation department search for "NPSD Transportation” on Facebook or follow @NPSD_Bus on Twitter. North Penn’s full board next meets at 7 p.m. on Jan. 18 at the district Educational Service Center, 401 E. Hancock Street; for more information visit www.NPenn.org.

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