BUTLER TWP — Butler School District’s transportation contractor has allegedly had 109 buses on the road since 2008 that were in violation of its contract.

That was one of the findings in a report given to the school board at its meeting Monday night by Greg Coy and Joshua Muscatello of the Armstrong Indiana Intermediate Unit.

In December the board approved a $650 contract with the ARIN IU to conduct an analysis of transportation records to see if the district’s contractor, Valley Lines, has violated contract requirements.

Using a formula specified in the contract, the district could assess a penalty of $1.93 million for the violations, according to the report.

That figure includes fees based on a daily rate and also reimbursement and refunded pay, district solicitor Tom King said.

King said the district does not have to pay for a bus that is out of compliance with the contract.

The provision of the contract that the company allegedly violated was that each bus chassis must be no older than 10 years old at the beginning of the school year.

This requirement is for student safety, but the age of the buses also is a key factor in determining transportation reimbursement from the state. The newer the buses the district uses are, the more transportation reimbursement it gets.

The district’s lost reimbursement because of the violations was calculated to be at least $65,604.

The report indicated four possible courses of action for the board. These included assessing the $1.93 million penalty; voiding the contract for cause; negotiating a contract addendum to address noncompliance; and identifying a reconciliation process and negotiating a contract addendum and negotiated penalty.

Valley Lines representatives were present Monday, but did not comment on the report and left before the meeting was adjourned.

King recommended that the board give the contractor one week to provide a written response to the report and plan to take action at its meeting on Monday.

Board members also will send any additional questions for the contractor to acting Superintendent William Pettigrew by Wednesday to be passed along.

If the board decided to void the contract, it would do so no sooner than the end of the school year, King said. Regardless of the board’s decision, the matter could end up being litigated, he said.

The first part of the report, which covered the contract with Valley Lines from 2008 to 2015, was given to the board in executive session on Feb. 27. The second part covered 2015 to present. The current contract runs through the end of the 2019-20 school year.

Coy reported that 56 buses were noncompliant in the past two school years, while 53 buses were noncompliant over the course of the previous contract. Twenty-five buses were found to be noncompliant this school year and they had all been taken out of service in favor of compliant buses as of this month, he said.

The district needs about 120 buses to cover all of its routes.

The report also alleged that Valley Lines did not follow the reporting requirements of the contract, including never notifying the district when a bus would be out of service for repairs for more than five days.

According to the report, the contractor also overbilled the district for the past two years for trips to Butler County Vocational Technical School. To correct that violation, the district subtracted $15,558 from the payments due to the company that were approved by the board Monday, King said.