District staff recommend negotiating transportation contract with First Student after two bids

A district staff member recommended the Millcreek Township School District begin contract negotiations with First Student for student transportation after the district received two bids and found large differences in how firms price long routes.

The recommendation matters because the district’s transportation costs — including contractor rates, monitor hours and diesel — would increase the district’s budget by roughly $962,000 under First Student, the presenter said. An alternative bidder, STA, priced routes with an excess‑hours tariff for runs longer than five hours that the presenter estimated could add roughly $500,000 a year.

District staff said the district solicited bids after posting specifications tied to the strategic plan and received proposals from two companies: First Student (the incumbent) and STA. Christ Transportation attended the pre-bid meeting but did not submit a proposal. "We had 3 companies attend the pre bid meeting... However, when it came to bid opening, Christ declined to submit a bid at this at this time. So, really, we received 2 bids, First Student and STA," a district staff member said.

Staff explained how bidders reported costs and why the two proposals looked different. The presenter said transportation companies submitted per-route rates based on a baseline number of school days and did not always include summer school, monitor hours or other defined line items in their headline per-route figure. "They basically say a hundred and 80 days times their actual rate for a normal run. They don't account for summer school, monitor hours, etcetera," the staff member said.

Staff estimated the district averages about 6.3 hours per route. STA’s proposal applied an excess‑rate charge for every 15‑minute increment beyond five hours. "STA submitted a proposal that basically said anything any route over 5 hours, they were gonna charge the excess route or excess rate for every 15 minute increment. Well, we average about 6.3 hours per route. So that's significant in terms of where we're at," the staff member said. The presenter later said that excess charges at STA’s rates equated to about a half a million dollars annually.

The presenter placed the cost outcomes in budget context: "Overall, it's about a 20% increase or $962,000 if we go for a student. STA is about, what, 300,000 $338,000 more than that," the staff member said. The presenter also noted increased labor costs for drivers are a major factor: "...$24.50 an hour starting right now for, a bus driver. 24 50 an hour. That's a big part of the increase."

On recommended next steps, staff said they would pursue incentive-based contract negotiations with First Student, with performance incentives and penalties tied to service quality. "Our recommendation at this moment in time is to engage in contract negotiations with First Student that, is incentive based and put some incentive drivers within that contract," the staff member said. The presenter added the recommended contract term would be five years.

Board members asked questions about STA’s local customers and fleet requirements, and staff said existing fleet-age limits and vehicle-replacement language in the district’s current agreement would be carried into a new contract. "They can't be older than 10 years... that already exists in our existing agreement," the presenter said.

The transcript records no formal motion or recorded vote. A board member signaled no objection on the record and staff said negotiations would begin. "So if there's no objection, we'll start negotiations with First Student and, see how they go," the staff member said.

The district will now negotiate contract details, including incentive/penalty language and fleet/driver staffing requirements; final contract terms and any board approval will appear on a future agenda.