The Hawaii Department of Education‘s long-awaited report on how to reduce student transportation costs leaves a lot to be desired, says Senate Education Chairwoman Jill Tokuda.

While the report released earlier this week offers some “a la carte” options for reducing costs, and even recommends saving millions by eliminating regular bus service on Oahu, Tokuda told Civil Beat Wednesday, it fails to address how school bus costs got out of control in the first place.

“I think, given all of the public discussion around that issue, it’s a bit of an obvious omission,” she said.

But school officials say they delivered what was asked and they have questions of their own for policy makers.

Civil Beat, in its Taken for a Ride series, has documented how a sudden and mysterious lack of competition among contractors contributed to school bus costs more than doubling over the last six years. The situation has attracted scrutiny by both state policymakers and federal investigators.

Tokuda took the lead last year in communicating the Legislature‘s disapproval of the runaway costs. Lawmakers zeroed out the school district’s transportation budget for next year, promising not to restore it until they’ve received some satisfactory answers. Legislators ordered district officials to submit a report that addressed the reasons for rising costs and how the department planned to get those under control.

But not only was the department’s legislative report late, Tokuda says it lacked substance.

“When I read through a report like this, it tells me the Department of Education has a lot of homework to do,” she said.

No Explanations

While the school bus report mentions that competition among contractors can help reduce costs, it doesn’t explain that it was a lack of competition that has driven costs up. And it doesn’t explore ways to increase competition as a way of keeping costs in check.

That’s the primary topic Tokuda would have liked the department to discuss more in its report. It’s even more relevant now because the increased scrutiny appears to have prompted companies to begin bidding against each other again for the first time in five years. And a mainland company submitted bids for the first time in nearly 30 years.

“A fundamental question to me is, when you suddenly see a difference in behavior, then what caused that shift?” Tokuda asked.

She still has questions for the Department of Education, including these:

  • What is their explanation for the lack of competition?
  • What are the barriers to competition?
  • Some bus contractors had stated at one point that the time frame in which you have to bid is too short, so have we looked at lengthening that process?
  • What was the difference between this year and last year, where you went from a single-bid outcome to having multiple bids? Did you change something?
  • Are people suddenly realizing that everyone — from Legislature to other governmental agencies — are looking very closely at this, and so they suddenly started competing again?

Randy Moore, the district’s Assistant Superintendent of School Facilities and Support Services, says that while the procurement process and lack of competition have been subjects of both internal and external discussion, lawmakers did not request a report on those things.

The Legislature’s budget proviso asked for:

(1) A comprehensive analysis of alternatives for providing student transportation, including mandated student transportation services, including but not limited to the elimination of transportation services not mandated by law, route consolidation and reduction scenarios, methods of reducing contracted costs, implementation of transportation services with state personnel and/or buses, partnerships with county agencies, and the use of tripper service as defined in

(2) A cost benefit analysis of each alternative identified;

(3) A prioritized listing of student transportation routes, the reason the route is a priority, the projected number of students serviced, and the projected cost of providing transportation service for the route;

(4) An examination of fee schedules and evaluation of various pricing strategies;

(5) An evaluation of how student transportation is successfully administered and costs are managed and paid for in at least four other jurisdictions;

(6) Recommendations on the options identified in the report; and

(7) Identification of the actual costs for all student transportation services, including mandated, for the prior two fiscal years and projected costs for the current fiscal year by means of financing, contract, and route and identification of those costs;

“I can appreciate that there are other things that could have been addressed, but we wanted to address the points that were specifically in the proviso,” Moore said.

Cursory Solutions

While the report offered a number of cost-saving measures for evaluation, Tokuda said, most of them were more “cursory,” and almost none of them were actual recommendations. Instead, the department explained in detail why most of them were bad ideas or wouldn’t work.

The department said it was “exploring” many of the options, which Tokuda said is not a satisfactory answer.

She also didn’t expect to be given a menu of possible cost-saving measures without any real guidance on which ones the department preferred.

“Maybe they’re operating under the assumption that everyone loves choice, but I think that what I would have wanted was a recommendation for some short- and long-term options,” she said. “I wonder if they weren’t just overwhelmed with the number of options before them. There were so many options, and so many factors involved in each of them, maybe it was hard for them to drill down deep into one or two possibilities.”

Moore says the menu is there, because “it was the menu that was requested.”

Department Has Philosophical Questions

He says the issue is far bigger than how much the Legislature wants to spend on school bus services. This is an opportunity for lawmakers to determine their entire philosophy about student transportation.

“Should it be promoted for the safety reasons, the fact that it’s more efficient, lowers carbon emissions and is more convenient for parents?” he asked. “Or should the public policy be to let everyone figure out their own transportation to school?”

“Although the dollars triggered these, it raises philosophical issues that are important,” Moore said. “Those are not issues, I think, that ought to be settled by bureaucrats in the Department of Education.”

While district officials believe student transportation is important, he said, the menu of options reveals what they would do if the Legislature decides to put a cap on what it will spend on school bus service.

But Tokuda suspects the district has already made its choice, because it already knows how much money it wants for school bus operations next year: $71 million.

Moore said the district based its projection on what it needs to keep buses running at the current service level.

“How quickly we can take a bite out of the current costs is unknown,” he said. “I believe that we can, and we’ll work to do that. But I can’t promise we’ll have certain results by a certain date.”

Instead of waiting to ask her questions when the Department of Education is scheduled to come before the legislative finance committees on Jan. 19 with its budget requests, Tokuda she’s going to ask them now.

“Time is of the essence, because we’re starting legislative session in two weeks,” she said.

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