The Board of Education's CIP/Facilities/Finance (BOE CFF) Subcommittee discussed plans and strategies for the district's student transportation contract at its Tuesday, October 20 meeting.

Director of Business and Finance Tanja Gouveia said FY 2026-27 marks the final year of the district's five-year contract with All-Star Transportation; the contract runs through June 30, 2027.

Given the size and complexity of the contract, she wanted to bring forward relevant information and facts to help the Board better understand the details of the contract, she said. The Board could then determine whether to proceed with a competitive bidding process or negotiate with All-Star, the district's current vendor.

"Transportation is a significant investment for the district, with many moving parts that ultimately affect our students, families, staff, and taxpayers, so we want to ensure that the board has a clear understanding of the contract and the potential considerations associated with each option before making a decision," Gouveia explained.

She said a lot of work has to be completed before a new contract is in place by July 1, 2027, hence her presentation. The BOE may take action on what direction it should take at its November 4 meeting. Prior to this meeting, Gouveia said John Dufour, the owner of All-Star, is willing to attend an executive session to discuss terms.

Gouveia said if no action is taken on November 4 and the BOE does not have an appetite to negotiate, they would be positioned to put the contract out to bid before the end of November.

Option one, negotiating a contract with All-Star, requires the board to suspend Purchasing Policy 3320 under Bylaw 9510 via a majority vote, according to Gouveia. She said this would allow the BOE to forego the formal bidding process, and could be done at the board's November 4 or November 17 meeting.

For option two, going out to bid, the board would publish a request for proposal (RFP) by the end of November. Gouveia said the bids would have to be received around late-December/January, with vendor selection finalized around February/March of next year.

If there is a new bidder, Gouveia said, they need to give that vendor time to set up all the routes, hire drivers, find a bus that will accept propane, and more.

Weighing The Options

Gouveia then showed a slide featuring a pros and cons list comparing both options. She said the biggest advantage of negotiating a contract with All-Star is a lower percentage increase. This is typical, she said, because there is less risk for the vendor, and they provide an attractive rate. Another pro is continuity, something Gouveia said "pretty much tops [her] list."

She said it is a huge incentive for them, as the district's transportation system is extremely complex.

"All-Star has been here for a while, a total of 15 years now, and we've really fine-tuned the logistics, the operations, and everything for a very smooth, day-to-day service," Gouveia said. "Keeping the same vendor means the same routes, drivers, bus lot, and routing software, so it eliminates a lot of transition-related risk."

Even if discussion with the vendor is not favorable, Gouveia said, they still have time to go out to bid.

The negotiating route comes with cons, however. In addition to some criticism by those who are less familiar with the transportation market, Gouveia said there is some risk another vendor would come along with a lower increase.

If they go directly to bid, Gouveia said, they will be testing the market and following Purchasing Policy 3320. At the same time, Gouveia said she wanted to make one thing clear: competition in the student transportation industry is very thin. This means the district would get "maybe one to two responses," one of those being First Student. Gouveia said First Student's current rates in surrounding towns such as Bethel, New Fairfield, and Ridgefield are 4-18% higher than Newtown's.

A new vendor would have to rebuild the district's current transportation system, meaning new routing software, drivers, buses, and bus lot. That is one of the, if not the biggest, cons to Gouveia, she noted.

A History In Transportation

The director of business and finance then offered an overview of the district's transportation contract history. Before All-Star, Newtown had owner-operators, people who would own and drive their own buses as an occupation. In 2012, the district decided to prepare an RFP and bid the contract out. That decision, Gouveia said, was "definitely the bid that changed Newtown."

Gouveia said Newtown owner-operators were closing on $400 a day, a number higher than many current transportation rates. Going out to bid saved the district almost $900,000 in the first year, according to Gouveia.

Four different vendors bid that year, including Newtown owner-operators and All-Star, Gouveia said. The other bidders were 8-15% higher than All-Star. The contract, which ran 2012-17, was awarded to All-Star.

By the end of that contract, Gouveia said competition in the industry had really thinned out. The BOE at the time decided to negotiate with All-Star, which provided a zero percent increase in year one, and then a three percent increase in each subsequent year. The Board suspended its bid policy and negotiated with All-Star for a contract spanning 2017-22.

Around the end of the 2017-22 contract, the COVID-19 pandemic hit the busing community hard enough that there was a national driver shortage. In Newtown, the shortage caused nine routes to go unfilled. They were then merged into other routes, according to Gouveia.

With the industry in disarray, Gouveia said, there was zero competition. The BOE was urged to negotiate with All-Star for a third contract but the Board did not have an appetite for this, according to Gouveia. The district declined an informal verbal negotiation with All-Star at four percent and went to bid. The district had no bidders and All-Star came back, with the resulting contract carrying an 8.85% first-year increase. The later years had an increase of about four percent.

After Gouveia presented a brief overview of recent transportation contract history for surrounding districts, BOE member Shannon Tomai asked if All-Star verbally gave her any indication of what the increase would be for a new contract. Gouveia said she was hearing around a ten percent increase.

"Of course, I'm going to try to get something lower ... but I don't think it's going to be much lower than eight to nine percent, to be honest," Gouveia said. "Even if we did receive ten percent, I think we will be lucky."

Just this year, Gouveia said, Rocky Hill had its BOE decline a negotiated seven percent increase with its vendor. Rocky Hill received a bid from another vendor at a 25% increase; its current vendor returned with a 12% increase.

If Newtown was to turn down a bid, Gouveia said, the same situation could happen as in 2022: the district could have no bidders and All-Star could increase the rate. BOE Chair Alison Plante asked if they could negotiate the bid, but Gouveia said at that point, it is a sealed bid; whatever is inside the bid stays.

"It's definitely risky on both paths," Gouveia said. "I'm definitely rooting for the district and trying to get as low of a possible rate as I can."

=====

Reporter Jenna Visca can be reached at jenna@thebee.com.