Funding services when there are no funds

By Tim Ammon

Transportation operations across British Columbia are facing significant challenges as a result of the recent change to the funding formula in the province. A number of districts have experienced severe cuts to transportation funding that must be addressed through cuts to service, the identification of operational efficiencies or the expanded use of fees to support service. Figuring out how to build support for the new operational and financial models that will result from this change in funding is the biggest challenge transportation professionals across the province will face. no easy cHoIces; no uncontroversIal decIsIons

Efforts toward “efficiency” around structural funding problems or longterm funding reductions are both ineffective and unsustainable. Service levels will decline, fleets will get older, and paradoxically, costs are likely to increase as transportation managers continue to try to accommodate increasing educational demands with decreasing resources. Dramatic funding cuts will lead to dramatic changes in service models for some school districts. The most draconian – and in many places the only – option is to reduce service. Changing eligibility policies or eliminating services completely for certain student groups will cause an almost unimaginable public outcry. Worse yet, it will limit the educational opportunities for students in certain communities. It is the severity of these consequences that requires transportation professionals to be certain about the efficiency and effectiveness of their service-delivery practices.

While the options are not great, there are certain things that transportation directors can do to prepare themselves for the inevitable discussion about choices. These things include: • Communicating marginal costs. In this business, if you do not eliminate buses it is very difficult to save signifi-

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cant dollars. Therefore, when school boards are considering changes to eligibility requirements, you should know what savings might be achieved at varying levels. For example, assume that changing eligibility requirements for 1.5 to 2.0 kilometres will result in only five per cent fewer students being transported across an entire district.

This limited change across a broad service area is unlikely to yield a lot of savings, whereas changing from a single tier to multi-tier routing structure might allow all the students to remain eligible for service and reduce costs. • Communicating short-term savings versus long-term costs. One likely response to this funding change is changes to maintenance practices in districts. While maintenance costs typically represent approximately 20 per cent of all operating costs, there will be a temptation to do things like extend preventive maintenance service intervals and not perform minor repairs. This will be particularly tempting since it appears that fleet replacement will continue to be available. While these options will likely result in short-term savings, they will absolutely result in longer-term costs.

Breakdowns will increase, unreliability will increase and service quality will suffer. Transportation directors should be prepared to estimate how much of a negative impact this would be. • Appreciating unintended consequences. If the news reports are any indication, user fees are likely to be the first and immediate response to the change in funding model. While this is certainly reasonable, it does not come without challenges. The use of fees will result in some students having their access to education limited. Payment of a fee implies a set of expectations for service that may be more difficult to meet. It is much more difficult to explain late arrivals and buses to people who are paying than to people who are receiving the services for free. Payment for services also implies the need to develop policies around managing the transactions and tracking eligibility for services. All of these concerns complicate the decision to use fees beyond just the financial implications.

Transportation management in the province of British Columbia will be more complicated in the coming years than it has been in the past. Developing the strategic and operating infrastructure necessary to accommodate the reductions in provincial funding will require an intense focus on the cost and efficiency of operations. Transportation directors should be prepared that an increasing component of their job will be to communicate the costs and consequences of the decisions made by legislators and school boards.

About the Author: Tim Ammon is a vice-president with School Bus Consultants, LLC (SBC). SBC provides consulting services to student transportation operations across Canada and the U.S. More information can be found at www.schoolbusconsultants.com. Ammon can be reached at 888-506-3413 extension 702, or at tammon@schoolbusconsultants.com. b

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