State lawmakers say they’re “cautiously optimistic” that the Hawaii Department of Education is moving in the right direction to rein in school bus costs and overhaul management of the branch so that it’s more efficient and accountable to the public.

Two bills that would give the DOE more control and flexibility over school bus contracts — Senate Bills 1082 and 1083 — are sailing through the Legislature. Meantime, the department is currently testing out a new school bus contracting system on the Big Island, a pilot that lawmakers say seems to be working well.

But Senate Education Chair Jill Tokuda says time will tell whether the department can successfully roll that pilot out to all islands.

“The real work lies ahead in terms of how you really take it to scale,” she said. “It’s that multi-million dollar question of how do you make the changes system-wide.”

Civil Beat has been tracking Hawaii’s runaway bus costs in its investigative series Taken for a Ride. Civil beat was the first to report that a lack of competition among bidders forced school bus costs to skyrocket, nearly tripling expenses between 2006 and 2012.

It cost taxpayers some $75 million to transport roughly 35,000 kids to school last year.

Both the pilot project and the bills come in response to a 69-page report published last November that contained recommendations to improve the transportation program’s efficiency and cost effectiveness. A scathing 54-page audit — conducted by the state two months earlier — attributed spiraling costs to ineffective and inefficient department management.

Raymond L’Heureux, assistant superintendent for school facilities and support services, is expected to update the Board of Education at its next meeting on how the department is responding to the recommendations outlined in the two reports, according to DOE spokeswoman Donalyn Dela Cruz. Until then, DOE officials won’t say much about the department’s progress other than that pilot is being implemented and that various measures to systematically change contracting procedures are being considered.

But Tokuda emphasized that the department can’t completely roll the pilot out until existing contracts are phased out.

“Obviously everyone would want it sooner than later,” she said. “But from a legal perspective … those dictate how quickly you can really start to bring everyone on board.”

Tokuda said she anticipates holding an informational briefing during the interim at which the department would be asked to update lawmakers on the pilot and updated contracting methods.

Hawaii lawmakers last year blasted the district for not keeping the bus costs in check. The Legislature in the end chopped off $17 million from the student transportation budget in an effort to pressure the department to rein in costs.

But it didn’t, and the Legislature this past year appropriated about $25 million to the department for student transportation, forcing it to leave 2,000 students without rides to school. The district had to dip into its Impact Aid money — funding to cover the costs of educating federally connected students — to fill that $17 million hole.

And lawmakers this session are expected to again hold off on appropriating more money for student transportation, according to former House Finance Chair Marcus Oshiro, who last year accused the department of “irresponsible fear-mongering.”

The department in its budget proposal for the 2013-14 fiscal year requested an additional $8 million for student transportation. But both the state Budget and Finance Department and the House Finance Committee denied the request.

“You’re continuing to see the Legislature keeping a close eye on bus transportation costs from a budgetary perspective,” Tokuda said. “The pressures are not going to be let up.”

Still, Oshiro said he’s “been very pleased” with the department’s response to the issues raised in the auditor’s report.

“They’re seeking to live within their means and appropriations,” he said, adding that the proposals currently moving through the Legislature reflect “key legal changes that I think will go a long way to assist the department” in formulating new, more cost-effective contract methods. Current provisions in state law handicap the department from getting the best deal, he said.

Tokuda said the austere budgeting reflects just how serious lawmakers are in urging the department to rein in school bus costs and revamp management of the student transportation branch.

The November 2012 report — the product of a two-month investigation led by the Maryland-based consultant Management Partnership Services — concluded that the department would need to overhaul the transportation branch at all levels in order to stop costs from “escalating at an unsustainable pace.” The report attributed the skyrocketing costs to spikes in rates paid to contractors but also highlighted problems in procurement, organizational structure and technology.

“And, as we said before, increased dollars that go toward rampant increases in cost do come out of the classroom,” Tokuda said.

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