Rutherford County School Board votes to terminate contracts after contractor’s insurance lapsed

The Rutherford County School Board voted Feb. 24 to terminate contracts tied to Ursa Major Logistics after district staff said the company’s liability policy was canceled effective Feb. 19, leaving 39 buses listed on that policy uninsured that day.

In public comment, transportation contractor Christie(Christy) Crosland asked bluntly whether “children were transported on these buses without insurance,” and called for clear, factual answers and limits on how many routes a single contractor may hold. Gary Carter, the contractor whose policy lapsed, told the board, “I take full responsibility for the laps in the insurance for the buses that I operate,” and apologized to families and drivers.

Why it matters: The board concluded the lapse put students and taxpayers at legal and financial risk. Superintendent Dr. Sullivan and transportation staff described a multi-day operational effort to reassign routes after the district received a notice from the insurer and used VIN numbers to identify affected buses. Staff said some leased buses may have been covered as additional insureds under the policy, but the district could confirm only that the 39 VINs listed had no effective coverage on Feb. 19, 2026.

District account of the incident: Dr. Sullivan told the board the district was alerted Friday that “Ursa Major Logistics, their insurance being terminated.” Staff said they identified 39 buses on a bus schedule attached to the policy and immediately stopped impacted buses from transporting students. The district worked through the weekend to reassign routes, set up phone lines, and coordinate with contractors and schools to limit disruption. Dr. Sullivan recommended terminating all contracts tied to the policy on principle because allowing the lapse to stand would set a precedent, even though the terminations would cause short-term operational hardship.

Student impact and coverage: Staff reported elevated absences tied in part to transportation disruption — district attendance figures cited 4,151 absences on Monday (compared with 3,795 the prior Friday) and higher absence counts over the previous days — and identified three special-education routes that were not immediately filled. Transportation staff said they covered most routes through contractor cooperation, route adjustments and by splitting route payments among contractors who filled in.

Board action and next steps: The board approved a motion to terminate “all contracts associated with Ursa Major Logistics and any and all contractors with impacted contracts by the loss in insurance coverage of this policy,” and required that impacted VIN numbers come to the board for approval before servicing Rutherford County Schools. A roll call recorded board members (as read aloud at the meeting) voting yes: Katie Darby, Stan Vaught, (board member) Rosales, Butch Vaughn, Mister Tidwell, Claire Sharp and Claire Maxwell; the chair announced the motion passed.

After the termination vote, the board directed the transportation department to compile a list of subcontractors and leaseholders affected by the policy lapse who could be reinstated if they can present valid VIN-linked proof of insurance. The board reinstated two specific routes immediately (staff identified the two routes as ones whose drivers had separate, valid insurance) and set a timeline for transportation to notify drivers that anyone wanting to be added to the district’s contractor list must contact transportation by the end of business Friday to be considered for reassignment next week.

Contract and policy questions: Board members and legal staff discussed contract language that requires carriers to give 30 days’ advance written notice of cancellation. Transportation staff said they received the insurer’s notice the same day the cancellation was effective, not 30 days earlier. The board directed staff and legal counsel to bring recommendations to address verification gaps (for example, options such as a centralized transportation email, requiring proof at payroll, or limiting how many routes a single entity may control) at the next board meeting.

What contractors told the board: Carter said some notice had gone to an old address and that he thought he had until a later date to cure the payment; he said he had paid to reinstate coverage and was working with his agent. Contractors and board members described common business practices — leasing buses, listing lease drivers as additional insureds, and informal swaps of routes — that created uncertainty about who was responsible for coverage and how stipend funds were handled.

Financial and operational details: The board has been providing a $4,000 per-bus stipend intended to help contractors buy insurance; staff said that stipend had been paid. Carter said average insurance per bus ran about $4,965 (he also cited a total monthly figure for the policy), and the district said it will need to sort how stipend funds were used when buses were leased. Transportation staff warned the reassignments and payroll adjustments would be administratively complex but feasible in the short term.

What’s next: Transportation staff will return to the board with a vetted list of affected contractors and VINs and recommendations on reinstatement procedures at the board’s next regular meeting (scheduled for next Thursday). The board also asked legal and transportation staff to propose policy fixes to improve insurance verification and to report back for additional action.

The board adjourned after the discussion and actions.

(Reporting note: Quotes and numbers above are taken from the Feb. 24 special-called Rutherford County School Board meeting transcript.)