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March 12, 2010  |   Comments (0)   |   Post a comment

Contractor Roundtable: The Current Business Climate

School bus contractors offer insights on the advantages of contracting in the current economic climate as well as the impact of state and national regulatory issues.

by Claire Atkinson - Also by this author


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Are there any regional issues in states where you provide service that are affecting your business positively or negatively these days?
Gallagher: Not really — most states are under such pressure that there in fact have been some adjustments made. However, our standards in this industry are strict and should be. I think more districts and states need to come down on violators of contract terms when they seem to be turning their backs for lower costs; that’s a dangerous way to go.

Fowler: Just last week, Gov. Nixon had to cut several million dollars out of the state of Missouri’s budget, and although we’ve been working with him very hard to keep him from cutting transportation, he cut almost $16 million out of the transportation fund for Missouri schools. We had a seat belt bill that’s been introduced this year again; I can’t see how a non-funded mandate would pass right now. We even have one of our representatives who has introduced a bill that you can’t idle a bus at the schools, not knowing that many of us already have idling policies.

Terry Thomas, president, Community Bus Services, Youngstown, Ohio

Thomas: In Ohio, the public employer labor union got legislation enacted that pretty much precludes about 80 percent of the school districts in the state from contracting out. We’re actually in active testimony at the Statehouse right now trying to convince the state legislatures to reverse that, because private contractors present a much more cost-effective alternative to in-house operations. The other big one is school districts are cutting school bus service, and they’re asking for leniency on regulations to allow vans and other types of vehicles to be used. Thank God for the federal requirements, because I think the state would be more flexible in allowing the use of these other vehicles other than school buses if the federal requirements weren’t so restrictive.

Gatto: In the New York City region, it has been difficult to get fuel index adjustments to mitigate fuel risks which, in effect, will stabilize operations. Similar to other big cities, NYC has skyrocketing costs due to runaway labor wages, health and welfare insurance, pension and vehicle insurance premiums and cost-cutting initiatives larger than most municipalities due to significantly lower funding.

Are there any regulatory or other types of issues on the national level right now that you’re concerned about?
Fowler: Right now, there are three or four pending rulemakings at the Federal Motor Carrier Safety Administration that could actually put many of us out of business. One is for entry-level training — they have a ridiculous number of hours of training you have to do before you can take a CDL test. Another one is medical requirements. They want a specialized doctor to do a Department of Transportation physical, and for me out in a rural area, that’s going to be a very big expense.

Benish: The only real national regulatory issue, I think, is the seat belt legislation coming down in the future. I personally think seat belts in school buses are inevitable. We need to get out and talk to the people shaping the laws regarding seat belts and let them know our concerns.

Gatto: The Card Check bill (Employee Free Choice Act): This administration’s pledge to unions will make recruitment easier for the unions by simply signing cards rather than through secret-ballot elections wherein workers are protected. This will intimidate workers and will also strip our ability to campaign against unionization. Like the U.S. Chamber of Commerce and other business organizations, we are against this legislation.

We need a “school bus only” CDL because the trucking industry has been recruiting our drivers after we have trained and invested in them.

Lastly, the EPA has become too powerful and discretionary.

Anything else to add?
Thomas: I think that contracting represents the American Dream because it allows us to be in our own business. I think that if more people would look to this as an enterprise, school districts would have more options and, of course, there’s the business opportunity for the entrepreneur who wants to engage in it. I don’t think we do a good job in reaching out to school bus drivers out there who are thinking, “I wonder what it would be like to own a bus or two.”                   

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