Woodmore bus crash: Can county turn back clock on bus privatization?

Dec. 31--Jerry Green starts most mornings at 4 a.m. with a front-to-back examination of an 11-ton machine.

Since 1975, Green has owned and operated a school bus for Hamilton County. One thing has never changed in those four decades: routine maintenance inspections.

"You're supposed to know it from front to rear," Green, 69, said earlier this month. "When we purchase our buses, we're responsible for all operating costs, all fuel, insurance, anything."

Green went from hauling dirt to hauling children after his construction company tanked in the mid-1970s. Aside from a few zoning changes, he's handled the same route in Hixson for 32 years. He knows the parents, the students, the area.

Now he's taking a break on a recent afternoon, reminiscing in a parking lot about the county's transportation plan.

Green belongs to an old guard of local drivers who have largely been phased out of work since Hamilton County brought in its first private transportation company nearly 15 years ago. That 84-person group has dwindled to 49, he said.

It's a small group, Green said, but those who remain remember.

They remember a prophetic report in 2001 warning school board members of the safety and accountability concerns that private companies bring. They remember the school board claiming it could save $1 million on a switch. And everyone will always remember Nov. 21, when a 24-year-old Durham School Services bus driver swerved into a utility pole and a tree with 37 Woodmore Elementary children onboard.

"You have such responsibility for the lives of those children," Green said of the six who died. "There's a real difference in driving a 3,600-pound vehicle and a 12-ton vehicle."

Now, as Green sits on his bus, he wonders whether the county could abandon Durham and return to a more robust system of local contractors that he believes is safer.

At this point, though, it's likely too late to go back.

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To understand the transportation arrangement, you have to go back to 1997, when Jesse Register came to oversee the merger of Chattanooga and Hamilton County schools as superintendent.

For years, the separate county and city systems had developed different transportation arrangements. While the city had purchased a bus fleet and hired its own drivers over the years, the county had signed contracts with 84 independent owners like Green.

After spending the first few years on magnet school programs and rezoning, Register turned his eye to transportation in 2001 and reached a difficult conclusion: It was too expensive to let both systems continue operating side by side.

Register, who is now a professor at Belmont University in Nashville, worked on a school merger in North Carolina before relocating to Chattanooga. In 2006, he left for Davidson County, which maintains its own fleet and drivers, like the old city system here.

"You couldn't maintain two separate systems," Register said of Chattanooga in the early 2000s. "For one, the city-county lines had disappeared. So we looked at the city-operated system. But the fleet was old and we would have had to buy a lot of buses."

Since there had been no tax increase and the district depended on funding from the County Commission, Register said he and other school board members moved to convert to one private transportation firm.

After putting out feelers, three bids came in from Durham School Services, First Student and Laidlaw. The school board wanted to keep local contractors in the picture, Register said, in effect creating one private company in addition to the 84 drivers who already existed.

"The decision we made was to allow the private contractors to continue to operate," he said, "but not to add any more."

Over time, as local contractors have retired or grown too old, their routes have kicked over to the private company in place.

The county struck a four-year deal with First Student in 2002, which ended four years later when school board members said they wanted a stronger contract to make the next private busing company more accountable to them, archives show. Durham won the next contract in 2007.

Local contractors pushed back on the changes, and during the 2001 bidding process they took their concerns to attorney Tracy Wooden, who recounted their concerns about losing their livelihood under a privatized system in a 30-page report.

Among other things, the report warned that transportation contracts with private companies often led to safety problems. On top of that, it foreshadowed that districts entering into such contracts have a harder time returning to locally operated systems.

"Sadly," Wooden said recently, "the risks warned about in our report in 2001 came to be realized."

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Wooden cited numerous articles and reports published nationwide that cut at the same idea: Partnering with private companies might save money in the short term, but it creates a host of accountability problems down the road.

- From a Michigan Education Association Report: "Private contractors need to earn a profit, finance corporate taxes overhead, and pay taxes. These factors drive the cost of the contract up and/or the quality of the service down."

- From a 1996 U.S. Secretary of Labor report on excellence in state and local government: "Once a school district makes a decision to privatize work, it can be extremely difficult to reverse that decision, especially if the school district has divested itself of essential equipment."

Furthermore, Wooden wrote, one of the bidders, Laidlaw, paid for a report suggesting the county could save $1 million if it employed drivers under one system.

"The report is biased," Wooden wrote, "and the assertions made by Laidlaw concerning cost savings are not in any way supported by the report."

Including anecdotes about parents not getting adequate responses from private companies, Wooden's report came to the following conclusion:

"Private busing companies have been beset by safety problems, many of which emanate from a lack of experience and employing people at the low end of the wage scale."

Register said Laidlaw took it upon itself to commission that report. Plus, the company did not win the bid.

Newspaper archives show First Student bought Hamilton County's fleet for $3.9 million in 2002. When Durham came into the picture in 2007, it bought that equipment and provided its own.

That opened the door to another argument in Wooden's report: With its equipment gone, Hamilton County couldn't easily return to a locally owned system if something went wrong.

The First Student outsourcing saved money, Register said, because the county no longer needed to make a capital investment on buses. Furthermore, the labor became cheaper under a private setup and the transportation company provided expertise in scheduling and management, he said.

But, Register added, "it's much harder to go back" to a nonprivate system once a district sells its fleet.

He offered one solution: Issue bonds over a long period of time to buy a fleet of school buses.

"It's like building a school," he said. "You sell bonds and start paying them over time."

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There's talk of this contract because community members and some officials have expressed concerns about communication and accountability in light of the Woodmore crash.

CEO David Duke told the Times Free Press earlier this month Durham only received two complaints against 24-year-old Johnthony Walker over speeding before the crash. Afterward, Hamilton County Schools released more than 30 pages of complaints and correspondence about Walker, including handwritten letters from students and a parent citing the driver's speeding and recklessness. But Durham, which provides the majority of the county's 250 buses and drivers, didn't receive several of them, Duke said.

Register said school districts can help themselves by negotiating a tightly written contract with private companies.

"We expected the private contractor to deal with most of the complaints," he said of First Student in the early 2000s. "But in terms of student discipline, that was a shared responsibility. I could pick up the phone or tell the transportation director to get rid of a bus driver. You have to have controls like that in place."

The Times Free Press could not obtain a copy of First Student's contract, but newspaper archives show school board members had concerns about the company's accountability in 2006 when the contract came up for renewal.

"Sometimes you have to hold people's feet to the fire, and we didn't have anything in the contract to be able to do that," said one member.

At the time, First Student did not face penalties for faulty service during the first 20 days of school and had five days to correct any problem after that, newspaper archives show.

A copy of Durham's 2013 contract with Hamilton County shows the company does face penalties. For example, Durham has to pay $150 for any missed routes in the morning or afternoon.

Current school board members now face a new dilemma before Durham's contract is up for renewal in June.

Do they drop Durham, one of the largest suppliers of school bus services that operates about 13,700 vehicles and drivers across the country? Do they tweak the contract to include more local contract drivers? Or do they contract with a new vendor altogether?

"If Durham has the best track record overall throughout the country, then, as bad as this is, we've got to transport these kids," said school board member Joe Galloway, who represents District 6.

"If overall they're not providing a worse service than [other companies], then I just don't see the common sense hiring a company that seems less safe."

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Duke also emphasized that Durham is upgrading its safety system in light of the tragedy, including a complaint management system that will electronically link every school and district to the Illinois-based company.

Furthermore, Durham plans to equip all Hamilton County school buses with smart cameras before 2017 and hire 30 more bus monitors, he said. The district currently has 70 monitors who ride the buses with special needs students, Durham officials said.

Steve Highlander, who represents District 9, said he would like to see more local contract drivers since they have a tested record of safety -- but economic challenges make that a distant reality.

"We run close to 300 buses," he said. "And there are 49 independent contractors left. To go five times that number right now would be almost impossible. For us to purchase our own buses would be economically impossible right now."

State data shows there are 6,399 district-owned buses across 127 Tennessee counties or cities. That means the district owns the buses and hires the drivers.

The other 2,779 buses are either owned by private companies or independent contractors. But the data doesn't specify whether it's a company like Durham or a contractor like Green.

Green said he can't recall any fatalities inside local contractor buses: "I think we've had a few that've been hit by cars, but nothing major."

Three school board members who vouched for their safety records said they would like to see more contract drivers in the county's transportation system.

Board member Rhonda Thurman, District 1, said allowing independent contractors to buy more than one bus could lead to more local safety. In that scenario, she said, independent contractors could outsource their vehicles to other local drivers and keep more accountability on the school system than a private company.

That was a suggestion in Wooden's report, as well, but Register said 84 independent contractors going out in 2001 and hiring their own drivers still posed control issues. "There is no single controller [like Durham]," he said. "You're just multiplying the degree of independence."

Some school board members countered that local independent drivers can already be held accountable to the school system in their contracts.

Aside from Wooden's 2001 report -- which said fewer than one in 10 of the then-84 independent contractors had citations -- the Times Free Press could not obtain their current safety records or a contract.

But that debate may not have much time to play out.

During a school board meeting earlier this week, Assistant Superintendent Lee McDade announced that choosing another bus service would require a months-long process and a fresh bidding process, all of which would be difficult to complete before the new school year.

"At this point in the year," he said in a recent phone interview, "it's probably going to be too late to bring in some 200 buses."

McDade mentioned Durham's several safety initiatives since the crash, including "behind-the-wheel evaluations for all drivers." Plus, he said, the company, which signed a four-year deal in 2013, is willing to accept a year-long contract instead.

Contact staff writer Zack Peterson at zpeter [email protected] or 423-757-6347. Follow on Twitter @zackpeterson918.

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