Education board laments
deal with school bus firm

Its new contract is for a
longer period and for more money
than the board had wanted

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By Leila Fujimori
lfujimori@starbulletin.com

The cost to the state of providing bus service for neighbor-island schoolchildren is going up, and education officials complain they feel trapped by bus company Roberts Hawaii.

The state Board of Education reluctantly approved on Thursday renewal of six four-year contracts with Roberts Hawaii amounting to $10 million for 84 school bus routes on Maui, Kauai and the Big Island.

Roberts Hawaii's two companies - Roberts Central Laupahoehoe Inc. and Student Transportations Inc. - will receive a 5 percent increase per year for the next four years to provide the service. The cost amounts to $13,000 a day in the first year. The previous contracts expired Aug. 31. The renewed contracts began Sept. 1.

"While we're really not thrilled, it's the best option," said Karen Knudsen, chairwoman of the board's budget committee.

Company officials, meanwhile, contend that the higher costs are warranted since Roberts has invested in newer buses for the service.

But a Department of Education official complained that the state has no alternatives.

"They (Roberts Hawaii) monopolize the whole place," said Al Suga, acting assistant superintendent for administrative services at the Department of Education. "We don't have a replacement."

He said that on Maui, for example, no other company could provide bus services should Roberts Hawaii decide not to pursue serving the department.

"That's the dilemma the board faced," Suga said.

Besides Roberts Hawaii, seven smaller contractors provide bus service on the neighbor islands. A total of 14 contractors statewide provide school bus service for the department.

While the department had wanted a two-year contract extension, the company insisted on a four-year renewal, with increases of 5 percent a year, the maximum amount allowed by law. But to comply with the strict age requirements of school buses, Roberts Hawaii had to purchase several new school buses at a cost of about $75,000 per bus, said Sam Shenkus, Roberts Hawaii spokeswoman.

"That time line allows for the cost of new school buses to be more absorbed into the fleet," Shenkus said.

"For a two-year extension, it doesn't make financial sense to spend all that money, so that was one of the reasons for a four-year renewal period," she said.

Shenkus said the reason so few companies are in the business is that the high cost of the buses means a major commitment of equipment.

"It's not that Roberts is a monopoly, but they are the largest tour and transportation company in the state. And one of the reasons they are is, they make ongoing commitments in their fleet," she said.

The department had tried to negotiate contracts more favorable to the state for months, Suga said.

"The danger the board saw was, by not executing we would be unable to transport children to school," Suga said. "We were bargaining from a position of weakness."

To fund the increased cost for bus service, some bus routes will be consolidated without any adverse effect, Suga said.