Rutherford County work session outlines new four‑year school bus contract; insurance, penalties and pay are main disputes

Rutherford County School System officials on March 18 presented a proposed four‑year contract for school bus operators that would require contractors to carry their own liability insurance, add a $4,000 annual insurance fee per regular bus, institute fines for repeatedly uncovered routes and permit smaller buses on some routes.

The proposal was described by the presenter, identified in the meeting as Mr. Reed, as a redline of the current agreement meant to reconcile transport‑department requests and suggestions from the Bus Contractors Association. “They've been good partners with the school system for many years,” Reed said, summarizing the system’s relationship with contractors, and added that the draft attempts to “accommodate the concerns being raised by both sides.”

Why it matters: The changes would shift both operational and fiscal responsibilities and could raise the school system’s operating costs. School staff estimated the new insurance arrangement would cost the district substantially more than the previous arrangement in which the county carried contractors on its liability policy; school staff said the new per‑bus fee could total roughly $1.3 million at the proposed rate and route counts.

Insurance and fees

Under the draft contract, bus contractors would be required to carry their own coverage: auto liability of no less than $1,000,000, business liability of no less than $1,000,000 and a $2,000,000 umbrella policy for a combined $3,000,000 in limits. The draft also proposes naming the school system as an additional insured.

Reed said the change follows a state statutory change that now requires contractors to obtain their own liability insurance, and he presented the three‑part limits above as a reasonable market level. Reed said the $4,000 figure in the draft is intended to cover the first year’s premiums per regular bus and that the board would re‑examine the fee if premiums rose more than 30% by the start of year three.

Tom Russell, representing the Bus Contractors Association, said the association’s members are prepared to carry minimum liability but object to being made the primary…