State Minimum Transportation . . . does it always save money?
Before we determine if state minimum transportation saves money, we should define exactly what it is.
Essential transportation services are defined in ORC 3327.01. In short, we are required to transport the following: (for a more thorough description, see the blog post on eligibility).
1. Students in grades K-8 that live more than 2 miles from their school of attendance.
2. Nonpublic and community school students in grades K-8 who live more than 2 miles from their school of attendance.
3. Vocational (Technical) school students – shuttle service between campuses
4. Students with IEP’s that include transportation.
When you adopt state minimum service policy, transportation for high school students and students that live less than 2 miles from school ends. This includes nonpublic and community school students in the same scenario.
At face value, it seems simple. If we reduce transportation service, we should reduce cost. But there is a caveat . . . and it is not insignificant. If you transport less students and drive fewer miles, you receive less transportation funding from the state. So, consider the question again . . . if you reduce transportation, and therein reduce your funding, how much will you really save? You must reduce transportation expenses more than your loss in funding for this to result in a net reduction of expenses.
Fortunately, there is a way to assess the fiscal impact before making any changes in transportation policy. The process is as follows:
1. Accurately assess your current cost for transportation. The key cost item to determine is your average cost per bus (including direct and indirect costs).
2. Estimate your savings by adopting state minimum service. This is done by creating a routing plan that serves only the eligible (and actual) riders. For districts with routing software, you would create the routes in a duplicate database to determine the number of buses needed and miles traveled.
a. Your primary measurable cost unit when providing transportation is a bus. If you run fewer buses, you spend less money. As a rule of thumb, when taking a bus out-of-service you will save approximately 80% of the operating cost of that bus.
b. You can reduce the number of trips that a bus makes each day, but you will still have the cost of operation for that vehicle. The savings for trip reductions is considerably less than taking a bus out-of-service. In general you only save approximately 10-15% of the vehicle operating cost.
c. The real challenge in reducing service levels is to find a way to do so with fewer buses. This is the achilles heel of service reductions. To save money you must take buses out-of-service, not just take students out of buses. This can be especially challenging when your current plan transports high school and middle school (or junior high) on the same routes. By eliminating high school transportation you are taking students out of the buses, but you still have to run virtually the same routes to pick up the middle school students that are still eligible.
3. Determine your state funding based upon the new service levels. To do this, you will need to forecast the number of students that you will be transporting and the daily miles traveled by each bus. These values are used in the state funding formula to calculate your new funding.
Determine the net impact on your budget by comparing your cost reduction to your funding reduction. If you save less money than you will lose in funding, there is no benefit to adopting state minimum transportation policy.
Loss of school bus service is traumatic in our communities. Parents and students have come to rely on school transportation for access to their schools. Without access to a school bus, absenteeism will increase, and we will disrupt the routine in many homes. In addition, traffic volume on the streets around schools will increase, and unfortunately so will accident and injury rates among our student drivers.
When reducing transportation, and therein reducing the number of buses used, you will also reduce the number of bus drivers you employ. While this will result in reduced labor costs, if and when the district determines it wants to restore transportation service, rehiring drivers in today’s labor market is extremely difficult, if not impossible.
There is an alternative. The best strategy to reduce transportation cost is to find a way to continue to transport the same number of students, but on fewer buses. This results in reduced cost with minimal (if any) impact on state funding. In fact, it could increase your efficiency rating which may result in an increase in state funding.
In some cases, it may be reasonable to take a middle ground approach – reduce service for some students and increase the efficiency of transportation for others.
Each district is unique . . . and will require a unique solution to transportation fiscal management.
If you need assistance with a state minimum transportation cost analysis, or you would like some assistance considering transportation alternatives, please contact us for assistance.