Contracted School Transportation During Mandatory School Closure

In light of the current closure of all elementary and secondary schools in Michigan under Executive Order 2020-5, school districts are generally not operating their school buses, and if they are doing so for the delivery of food, for example, such operation is on a very limited basis. For those school districts which have entered into an arrangement with a third-party contracted transportation service provider, this suspension of transportation services during the mandated school closure can create a unique set of issues.

Generally, third-party transportation contracts do not require the school district to pay the transportation contractor for days in which bus routes or services are not operated. However, in many contracts, this clause is coupled with a provision that sets forth a minimum number of school days the parties agree will require transportation services during the school year so that the contractor’s rates are normalized over the school year under normal operating circumstances. 

In line with the Governor’s stated desire that school employees receive compensation during the mandated closure, transportation contractors have been reaching out to their school district accounts to request the payment of an agreed-upon fee that would be charged during the closure. The impetus behind this request is the fear that the transportation contractor will not be able to retain bus drivers and other necessary personnel because it will be extremely difficult to have continuity of service when the closure ends in light of the current job market and the difficulty to attract and retain qualified and licensed bus drivers and other necessary personnel.

When considering these requests, there are many issues school districts must consider. How long should the agreement last? What amount is appropriate? How will the transportation contractor verify the amount? How will these payments be counted against any minimum number of service day clauses? What will occur if there are changes in laws which affect these temporary arrangements?  Whether a school district should consider these requests and how these questions are addressed depends on the underlying contract. If you have any questions about the impact of these issues on your school district or have questions about your transportation contract, please contact Jeremy S. Motz at 248.988.5895 or jmotz@clarkhill.com.