The motion to approve the contract with First Student Inc. for busing services failed at the Pleasant Valley School Board meeting Thursday night.

That doesn’t mean a contract won’t ever be approved. It means negotiations could continue with the school district if First Student decides to renegotiate the contract.

The vote was cast 4-3, but failed because the state requires five votes in favor of a contract, school district solicitor Mark Fitzgerald said. School board directors Delbert Zacharias and Dan Wunder were absent. Those voting yes were Susan Kresge, Donna Yozwiak, Len Peeters and Teresa Greggo. Those voting no were Laura Jecker, Norm Burger and Thomas Kresge.

Before the vote, Fitzgerald reminded the directors that he would review the contract before it was officially accepted, so there could still be some room for negotiation on small matters. The bulk of the costs would remain the same though.

The contract before the board was for five years of service from July 1, 2021, to June 30, 2026. Under the agreement, the district would pay First Student $7.4 million next school year. The cost would go up 10.8% for the 2022-2023 school year to $8.2 million. For the remaining three school years of the contract, the cost would increase to $8.6 million for 2023-2024, $9 million for 2024-2025, and $9.3 million for 2025-2026. The total for the five years would be $42.5 million.

Looking for a way to reduce costs, Director Susan Kresge asked during discussion before the vote if the number of routes could be reduced. Due to the decreased enrollment, they may not need as many routes.

Greg Gallagher, the area general manager for First Student, said, “Our bid proposal that we submitted was for 91 routes, and that did not include any reduction of routes.”

Gallagher explained that the company has given minimal increases to the district.

“We are at the point now that we need to. Our costs have risen just as your costs have risen, but we need to get our contract back on line. We are a for-profit company,” he said.

Gallagher said they have fixed costs that stay the same no matter how many routes they cover. He wouldn’t say that decreasing the number of bus routes would decrease their profit, but Fitzgerald said it for him.

“I think it’s fair to say that you know that you are a for-profit organization with a nonprofit school board. One of the issues is these increases are in excess of the actual index, they go up faster than we can get revenue,” Fitzgerald said.

Gallagher said First Student wants to work with the school district and recognized that the first two years of the contract have greater increases, but that their expenses have gone up.

The company increased pay to its drivers by 6.2% in order to hold onto them during COVID-19. Now, 60 of its 100 school bus drivers make $29 per hour. The bus drivers do not get paid if school is closed for snow or pandemic. The company also replaced 14 buses with newer buses. The buses are not brand-new. They are a few years old. They also intended to replace another 13 buses.

“So much of the increases that you’re seeing are us getting our company back in line,” Gallagher said.

“This is not a Pleasant Valley/First Student issue. This is a First Students issue,” Fitzgerald said.

“No, I disagree with that,” Gallagher said. “It is based on the increases we have given you in the past that have led us to where we are here today.”

“The reality is we are limited to the revenue we can generate or our tax base can afford,” Fitzgerald said. “To suggest that we have to catch up on what has occurred in the past is a very difficult ask for five people to vote for on this contract.”

William Gasper, the director of operations for Pleasant Valley, said that the current contract with First Student allows for a 5% reduction in routes per year. This would equal four routes.

The school board plans to hold a public meeting at 7 p.m. on June 14 via Zoom to discuss the transportation contract.