A corporate buyout complicates transportation company selection
One thing was made absolutely clear Monday night: The Oregon Trail School Board doesn't want to do business with its current bus services provider, First Student Inc., after that company's contract expires July 1.
Based on bids from various transportation companies and extensive analysis by a selection committee, district staff recommended dropping the Scotland-based company in favor of the nation's largest school bus provider, Laidlaw Education Services of Illinois.
The board quickly learned, however, that the district could find itself back in a relationship with First Student as early as this summer if the U.S. Securities Exchange Commission approves that company's pending buyout of Laidlaw.
'We thought we were choosing between three companies,' said School Board member Dan Thompson, 'but we're really only choosing between two.'
After seven years with First Student, the district decided to put its bus services contract out for bid. Many board members and Superintendent Clementina Salinas said it was time for a change, after a relationship that they say was riddled with problems and broken promises.
'(They) promised us radios, cameras, these things,' Thompson said, 'and when we demand them, they tell us, 'Hey, we're the only company in town, and it just ain't happening.''
'It's somewhat of a surprise,' said Cal Hull, senior regional vice president of First Student's western United States region. Hull said First Student's relationship with the district has been good overall. 'We've had some issues, but when you're dealing with routes, times, students, student behavior and that type of thing, there are always a bit of issues, naturally. And over the last few years we've done a very good job working through any of the issues the district and the community might have.'
After the selection committee received bids and rated its top three companies - First Student, Laidlaw and Pendleton-based Mid-Columbia Bus Services - Laidlaw came out on top, based on its overall customer satisfaction, level of service, price and several other factors.
Committee members - who included Boring Middle Principal Scott Maltman, District Business Manager Tim Belanger, board member Thompson, a citizen from Boring, Sandy High Activities Director Courtney Murphy and Student Services Director Paula Epp - all agreed that Laidlaw would be the best company for the district, given the overall picture.
But the concern some committee members, including Thompson, had was that they wouldn't be giving the contract to Laidlaw at all; rather, they'd be paying 3 percent above current costs for the same service.
Belanger told the board he believes that despite the near-certainty that Laidlaw will become First Student, the new contract would ensure a level of service not experienced in the past seven years. That contract would, among other things, require all mountain-area buses to have automatic tire chains - saving the district time and money - and for all buses to have communication equipment such as radios and digital video cameras.
'This contract we put together … has significant management features in there to allow us to manage the contract much more effectively,' he said. 'Even if we gave the award to First Student, we still would have had more control over it.'
Belanger noted that when First Student purchased the district's original transportation provider, School Bus Services Inc., the company honored the agreement that had been inked with the district. 'To this day First Student follows the contract of School Bus Services,' he said. He expects the same to be true if and when First Student purchases Laidlaw.
Thompson was not convinced and advocated that the board vote to award the contract to Mid-Columbia.
'Standing alone … Mid-Columbia was rated excellent and was the company of choice,' he said, noting that in every area but price, the 50-year-old, family-owned company rated above the other two.
Mid-Columbia's bid came in at $2.36 million, followed by Laidlaw's bid of $2.14 million and First Student's $2.01 million (a bid below what the district currently pays, $2.08 million). Thompson said the district should approve Mid-Columbia's bid and 'figure out a way to pay for it.'
Patrick Bonin, general manager for Laidlaw's Cascade Range service area, addressed the board members, urging them to make their decision based on Laidlaw, not First Student.
'We're a great company,' Bonin said. 'We have more contracts, our school districts are much happier at how we perform, we're responsible, and we retain our work.'
Bonin admitted that the details of the buyout were still fuzzy but vowed that Laidlaw's expertise and energy would be present no matter what.
'My problem isn't with Laidlaw,' Thompson told the company's two representatives present at the Monday meeting. 'My fear is who will buy you.'
Salinas agreed, noting that voting for Laidlaw would equate to purchasing 'the same thing for 3 percent and get the same kind of dissatisfaction we've had for seven years.'
She made an appeal to the board, urging members to hire Mid-Columbia.
'Do we want to shortchange the safety of our children, or do we want the very best for our children (for an extra $90,000)?' Salinas asked. 'I'm not against Laidlaw. I'm against poor performance. We have the money; the money is going to be spent, anyway. Let's keep our children safe and keep the community happy.'
Board members appeared to be torn as to whether they should give Laidlaw a chance or spend more on Mid-Columbia. After nearly an hour of discussion, the board decided to delay a vote on the contract until members could learn more about the implications of either decision.
Time is of the essence, Belanger said, since a new bus company would need adequate time to plan a transition in advance of July 1, when the new five-year contract would take effect.
To that end, the board scheduled a special meeting for 7 p.m. Tuesday, April 17, at the district office to make a final decision. In the meantime, board members will bring themselves up to speed on the problems the district has had with First Student, consider the possibility of paying $90,000 more a year for bus services and learn more about the pending merger.