School bus service halted as South Allegheny, Sun Coach Lines face off over contract

Late Friday morning, attorneys for South Allegheny School District sent a letter to the attorney representing their bus transportation company, praising progress they had made 10 days earlier in a dispute over $800,000 in back fees.

Four hours later, the company, Sun Coach Lines, responded by saying they were terminating service as of Monday.

“We gave it a lot of thought,” said attorney Ray Middleman, who represents the bus company. “Nobody wanted to affect the kids and the parents.”

But that’s exactly what happened.

South Allegheny School Superintendent Lisa Duval sent a letter to students’ families late Friday, notifying them that there would be no in-person schooling Monday. It’s unclear when they will resume.

“I promise you that we will get past this latest challenge, together, we will continue to do what is best for our students, and we will ensure that we give them the best education possible,” she wrote. “Together, we will solve this problem and have our students back in the classroom as soon as possible.”

A hearing on an emergency injunction request filed by the district is scheduled for Tuesday afternoon in Allegheny County Common Pleas Court.

The dispute between the parties began in August when South Allegheny objected to bills submitted by Sun in late March and April, even though no students were transported because schools were closed as a result of the covid-19 shutdown order.

Since then, the parties have been in court arguing over fees.

Middleman said the contract is clear that South Allegheny, with whom Sun has worked for 25 years, has to pay whether students are transported or not.

Their contract, which runs through 2023, calls for $1.4 million per year for transportation services, to be paid over 10 monthly payments, Middleman said.

The contract, the attorney said, is a “bulk rate or requirements” contract. That means, he said, it is a set fee that does not change.

It is not, he continued, a “pay as you go, or pay for services rendered” contract.

Therefore, Middleman said, the district owes for months even when no students were transported because schools were closed.

The district argues that they are entitled to renegotiate the contract if there is a 5% increase or decrease in the number of students being transported, or if the school district “for whatever reason discontinues school bus transportation.”

Their attorney argues that the provision that allows for a renegotiated rate was triggered by the covid pandemic shutdown.

Middleman said they are misinterpreting the contract.

“[They] still owe us because we have an obligation to keep buses, drivers, maintenance, dispatchers and administrative staff,” he said.

Sun Coach budgeted its employees based on the belief it would receive $1.4 million for the school year from South Allegheny, Middleman said. Without that, it can’t pay its drivers, at least six of whom have quit because of a lack of hours.

He noted, too, that because of covid, buses can’t operate at full capacity. Often, two buses are required for one route.

“That’s our obligation,” Middleman said. “We didn’t go back to the district and demand more money.”

Steven Engel, who represents the school district, criticized Middleman for “trying to litigate this in the media. … Much of what Mr. Middleman has said to the media is incorrect and untrue.”

Engel said he thought the parties had made progress toward resolving the dispute at a Jan. 19 mediation, and he was looking forward to a second session.

“Right after that request, they’re telling us they’re halting service and left the district in a lurch,” he said.

In a document posted on the district website, South Allegheny said that full payment of approximately $250,000 has been made to Sun “for all school bus transportation services that have actually been provided.”

The district said in the frequently-asked-questions document that it believes it has a “duty to its taxpayers to be responsible stewards of public money and paying a company several hundred thousand dollars for not performing services is not a responsible use of that money, especially when the agreement gives the district the right to negotiate a lower rate.”

In its request for an injunction, the district argued that Sun’s termination of services was not in good faith and violates their contract. Further, their attorney wrote, “it is nothing more than an attempt to use the threat of harm to the district and its students as a means to extort the payment of funds that defendant is not entitled to receive.”

Sun Coach is owned by David Sunstein, who also owns Pennsylvania Coach Lines, which had a contract dispute with Elizabeth Forward School District in 2019-20.