Town Council Approves BOE Request
November 12, 2009 by Josh Morgan
In one of its final acts before a new majority takes the reins next month, the Town Council transferred $171,000 to the Board of Education to help pay for increased transportation costs.
The Board of Education requested the additional funds in September, nearly seven months after bids for a new bus contract were received. Initially, the Board of Education requested a bid waiver to renegotiate a contract with DATTCO, the company that handles student transportation. Superintendent of Schools Dr. Greg Florio had assumed a four percent increase in transportation costs in his budget, which was adopted in April, before a new contract was ironed out. He believed the costs were accurate when renegotiating with DATTCO, which he said the Town has done before, although never in the final year of a five-year contract. Historically, Florio said additional years were added to contracts in the middle of a current deal. When the Board of Education approached the Town Council to waive the bid requirements, the motion was defeated and bids were requested.
The Town then solicited bids for a new contract and the first year increase was roughly 12 percent, while the remaining four years are around four percent annual increases. DATTCO was still the low bidder, with other companies offering even larger costs. As a result, there was a $170,849 shortfall in the transportation line item.
“We assumed a successful negotiation and agreement that would have been lower than if we went out to bid,” Florio said. “We thought we could get a favorable rate in the first year. This is not the first time we asked for a no bid in an effort to renegotiate the contract.”
The motion passed 7-2 on Tuesday night, with Republican Councilors James Sima and Tom Ruocco opposing the vote. Democratic Councilor Michael Ecke asked Florio if it was normal for districts to waive bid requirements on transportation contracts.
“I would say it’s more normal to negotiate rather than go out to bid,” Florio stated. “We try to renegotiate because there are upfront capital costs with bids.”
The district pays the contract each month from September to June. Since the district was still early in the 10-month payment plan, Sima believed the request could have waited until the spring. He thought snow plowing accounts and heating line items could have surpluses next spring and those additional funds could help pay for the increase contract costs.
“You are not out of money right now,” Sima said. “You may have surpluses and might need less or more.”
Florio said even if there “wasn’t a drop of snow” this year, that would only leave $50,000 to help pay for the transportation contract. He commented that, with a shortfall, he would balance the budget by limiting technology purchases and delaying maintenance projects.
“This would be a deferment for future budgets,” Florio said. “This gives us flexibility going forward.”
Democratic Councilor Matt Altieri said that, procedurally, the Council should go out to bid for contracts, but on the flip side, “we lose the ability to negotiate.” Altieri said data provided to the Council earlier in the year showed that bids would be higher than renegotiating since other communities were seeing higher transportation costs.
Florio said after the meeting that contracts are usually frontloaded because a company might look to purchase new equipment, like buses. That’s why he believed the DATTCO bid resulted in a 12 percent increase in year one, while remaining years were four percent annually. He was pleased that the money was allocated to the district, but always believed renegotiating gave the Town the best deal.
“With the bid they can try to upgrade and that’s built into the contract,” Florio said. “We’ve always had good contracts with DATTCO. From our perspective, it always worked out in a very positive way.”
The $171,000 will be transferred from the Town’s fund balance, or surplus account, which currently has a balance of roughly $8 million.
Said Chairman Matt Hall of the increased costs, “Frankly, this one’s on us.”