Bus contractor fined $480K for service issues
Since August 2021, Hamilton County public school officials have penalized their bus vendor, First Student, nearly $480,000 in fines for failed service routes and other performance violations, according to documents obtained by the Chattanooga Times Free Press.
First Student is contracted to run 143 daily routes, district spokesman Steve Doremus said by email. On average, First Student has failed to run roughly 90 routes each month, forcing some buses to cover more than one at a time.
“By doubling routes, buses are required to make additional runs beyond their regularly scheduled routes,” Doremus told the Times Free Press previously. “These additional runs may result in delays during both the morning and afternoon runs.” And parents are frustrated. “The bus stop that my girls get on, it is way overcrowded,” Lynesha Lake, whose two daughters attend The Howard School, said in a phone call. “Most days, they either have to send another bus or the kids are three to a seat instead of two.”
Outlined in First Student’s contract are penalty charges for performance issues. During the 2021-22 school year, the daily non-performance rate was $428.23 per incident. This school year, that rate increased to $441.08.
In May 2021, First Student incurred the highest penalty charges at $81,550.08 with at least 115 routes affected. Last month, Hamilton County Schools logged 158 affected routes and issued penalty charges of $56,017.16.
The fines are deducted from the total amount the district pays the company. Even with the deductions, the district pays anywhere between $1.2-$1.5 million each month for First Student’s services.
“The number of late runs and fines is higher than we would like, but the pandemic and the tight job market has made it difficult to hire bus drivers,” Doremus said. “It is not unusual for large contract bus companies to incur liquidated damages (fines) each day.”
First Student officials previously confirmed they are facing a bus driver shortage and are actively recruiting. Officials did not respond to requests for comment regarding the fines.
Hamilton County is not alone in its need for bus drivers. According to a survey from Hop-SkipDrive, a school rideservice company, 88% of schools are dealing with bus driver shortages.
Hamilton County Schools started contracting with First Student in 2019.
The bid, a total of $13 million annually, cost $1 million more than the district’s previous bus provider, Durham School Services, but former Superintendent Bryan Johnson’s administrative team recommended it based on a variety of factors, including safety and a brand new 185-bus fleet.
According to its website, First Student works with 1,110 school districts across the nation. Its contract with Hamilton County Schools was set to expire in June but the Board of Education in January approved a one-year extension until May 2023.