SHELTON — The city has reached a settlement with the state Department of Motor Vehicles over fines the city-operated Shelton School Transportation Services received during its opening last fall.

City Corporation Counsel Fran Teodosio said the city has agreed to pay the state $18,500 to settle claims with certification of the city’s buses, drug testing of the drivers and the way it maintained records and repairs.

The DMV fines amounted to more than $50,000, said Teodosio.

“We are happy with this result,” said Teodosio, who informed the Board of Aldermen of the settlement earlier this month.

The settlement brings a resolution over issues that started in August 2019, when school officials became aware that the city had not drug tested, as required by state law, all summer school drivers. State DMV officials arrived at the SSTS office the last week of August to review driver records and certify the buses.

The DMV record review was time consuming, forcing then-Superintendent Chris Clouet to delay the opening of school one day, from Sept. 3 to Sept. 4, to guarantee all drivers and buses were properly certified.

The city officially took over control of the school bus transportation operation on July 1, 2019, and summer school started on July 9, with the school year beginning Sept. 4.

City officials at the time blamed the delay on former city bus service provider Durham School Services.

Durham School Services is suing the city for some $200,000 for breach of contract.

The suit, filed March 16, 2020, in Milford Superior Court, charges the city and Board of Education with two counts of breach of contract and two counts of unjust enrichment. Durham School Services was the city’s bus operator through June 30, 2019, when the city took over the school district’s student bus transportation.

Durham School Services, in the suit, states that it spent $107,947.10 to make major repairs to the buses, which are owned by the city. The suit further states that the operating agreement, signed Aug. 28, 2018, between the parties obligates Shelton to pay or reimburse Durham for certain major repairs.

Mayor Mark Lauretti, at the time, said the city held back payments because Durham “did not perform necessary maintenance,” and the city was forced to perform the repairs.

“We spent money doing what they should have been doing,” said Lauretti.

Durham’s suit also charges that, as part of the operating agreement, the Board of Education owes the bus company $93,374.09, which it has also “refused or neglected” to pay. The suit states that Durham provided student transportation services through June 30, 2019, and is owed the money.

Board of Aldermen President John Anglace Jr. stated at the time that Durham poached drivers only days before the start of school and failed to properly transfer records to the city’s bus company.

“There was not a proper hand off (of the records),” said Teodosio. “It was a difficult transition between the city and Durham.”

brian.gioiele@hearstmediact.com