Rutherford County committee hears bus contractor insurance lapse, approves $880,000 midyear schools budget amendment

The Rutherford County Health & Education Committee on Tuesday was told a bus contractor’s insurance lapsed this month, causing route changes that affected roughly 40 routes (each run covers multiple routes) and an estimated 15–20 schools, and later approved a midyear schools budget amendment that increases both revenue and expenditures by $880,000.

Brian Runyon, chief financial officer for Rutherford County Schools, told commissioners the district contracts with individual bus owners rather than owning buses directly. He said the district paid a $4,000 per-bus stipend to cover required insurance, but the contractor "failed to pay what they needed to pay and insurance lapsed." Runyon said contractors who stepped in minimized disruptions and affected students were excused from attendance where routes were delayed.

Commissioners asked whether the insurance lapse constituted a breach of contract; Runyon responded, "From my understanding legally, yes," and said the board called a special meeting with the contractor to decide next steps.

Runyon then presented a routine midyear "clean-up" budget amendment that adjusts revenues to reflect state grant allocations and amends expenditures for advertising, legal contracts, instructional supplies, maintenance and equipment. He said the amendment reflects a net increase of $880,000 in both revenue and expenditures, and that none of the funds are local: "Every bit of that is state funding. None of it [is] local," he said, explaining the increase comes from TISA outcomes funding and a voluntary pre-K grant.

Commissioner Gooch moved to approve the amendment and the committee adopted the motion after a roll-call vote in which all present commissioners recorded "yes." The amendment was recorded as not using fund balance and as covering items the district identified at midyear.

The CFO said his department will provide further details at the upcoming board meeting about the contractor’s insurance lapse and any contractual remedies; the committee did not take separate formal action on the transportation incident beyond discussion and questions.