Board approves one-year amendment to transportation contract after provider's sales-tax shortfall discovery

The Casa Grande Union High School District board approved a one-year amendment to its transportation contract with Durham following the company’s disclosure of unpaid sales-tax liability found during a buyout.

Administration told the board Durham, which the district contracts for student transportation, is being acquired and, during the acquiring company's accounting review, uncovered about $1 million in unpaid sales tax over the past five years. Durham asked the district to share part of that cost by raising the normal contract increase from 2.5% to 4.5% for the final year; administration recommended approving a smaller, district-shared increase (2% over the planned rate) as a compromise while preparing to re-bid the service next year.

Board members expressed mixed reactions. One member, speaking from experience as a business owner, said companies should generally absorb their own mistakes and not ask customers to pay for them. Administration said counsel provided differing legal interpretations and that the district’s legal review has been ongoing since February.

The board voted to approve the proposed pricing amendment for the coming year. Administration said the district had budgeted for a larger transportation increase this year and will put the service out to bid next year; it also cautioned that management of the company remains the same despite an ownership change.

The board did not take further contractual action at the meeting beyond approving the pricing amendment; it noted staff will return to the board during the bidding process next winter.