View in EDS

Total Costing for School Transportation Service: How the San Diego City Schools Missed the Bus. Policy Study No. 199.

Saved in:
Bibliographic Details
Title: Total Costing for School Transportation Service: How the San Diego City Schools Missed the Bus. Policy Study No. 199.
Language: English
Authors: Beales, Janet R., Reason Foundation, Los Angeles, CA.
Availability: Reason Foundation, 3415 S. Sepulveda Blvd., #400, Los Angeles, CA 90034 ($15).
Peer Reviewed: N
Page Count: 39
Publication Date: 1995
Document Type: Reports - Research
Descriptors: Bus Transportation, Contract Salaries, Contracts, Cost Estimates, Costs, Elementary Secondary Education, Expenditures, Labor Demands, Privatization, Public Schools, School Buses
Abstract: In December 1994, San Diego City Schools' (California) Board of Education voted to discontinue competitive contracting for busing and expand its in-house transportation department, believing the new arrangement would save money. This report argues that the decision was based on a flawed financial analysis prepared by the district's in-house transportation department. Instead of looking at total cost, the analysis considered only the marginal cost of expanding in-house services. The report argues that in-house costs for school-bus service were 80 percent higher than private-contract providers. The district incurred higher costs in the areas of labor costs, utilization of resources, and fleet acquisition and owning costs. Private contractors operated more efficiently than the Transportation Services Department in three areas: lower labor costs, better utilization of vehicles over useful life, and lower vehicle purchase price. By eliminating contract service, the school board gave the Transportation Services Department (TSD) little incentive to control costs. The report recommends that the San Diego Board of Education: (1) halt further expansion plans until costs are fully identified; (2) invite an independent auditor to evaluate total costs of the TSD and the cost of service alternatives; and (3) implement fully allocated costing methods into the district's accounting system. Six tables and two figures are included. Appendices contain cost-analysis strategies, definitions, a list of recommended reading, tips for creating a competitive environment for transportation services, and discussion of the continuous-improvement strategy. (LMI)
Entry Date: 1996
Accession Number: ED390113
Database: ERIC
Description
Abstract:In December 1994, San Diego City Schools' (California) Board of Education voted to discontinue competitive contracting for busing and expand its in-house transportation department, believing the new arrangement would save money. This report argues that the decision was based on a flawed financial analysis prepared by the district's in-house transportation department. Instead of looking at total cost, the analysis considered only the marginal cost of expanding in-house services. The report argues that in-house costs for school-bus service were 80 percent higher than private-contract providers. The district incurred higher costs in the areas of labor costs, utilization of resources, and fleet acquisition and owning costs. Private contractors operated more efficiently than the Transportation Services Department in three areas: lower labor costs, better utilization of vehicles over useful life, and lower vehicle purchase price. By eliminating contract service, the school board gave the Transportation Services Department (TSD) little incentive to control costs. The report recommends that the San Diego Board of Education: (1) halt further expansion plans until costs are fully identified; (2) invite an independent auditor to evaluate total costs of the TSD and the cost of service alternatives; and (3) implement fully allocated costing methods into the district's accounting system. Six tables and two figures are included. Appendices contain cost-analysis strategies, definitions, a list of recommended reading, tips for creating a competitive environment for transportation services, and discussion of the continuous-improvement strategy. (LMI)