Island Transport vice-president Scott Dario said yesterday the only way his company will keep running buses for the Vineyard schools is if they can strike a deal for more money and greater autonomy for deciding snow days and disciplining drivers.

Just four days ago - and one month before school doors open for a new year - Island Transport Inc. announced it was bailing out of the last year of its three-year contract to run the school buses.

The buses transport more than 1,500 Island schoolchildren to and from school on a daily basis.

Bus company president James C. (Jack) Dario sent out a scathing letter Monday, charging that school officials had failed to uphold the contract while citing serious concerns over safety, alleged discrimination against drivers and alleged harassment of company management.

Faced with the possibility of running their own bus system or finding a new contractor to take on the task, school leaders called a quick meeting Tuesday to begin contingency planning.

But Vineyard schools superintendent Dr. Kriner Cash said yesterday the main goal is to convince Island Transport to honor its contract.

"We have a contract," said the superintendent. "And we prefer Island Transport honor it. Until [there is] a mutual dissolution [of the contract], we're still in it."

Now, Scott Dario is saying there's a chance to salvage it, but only if the public schools agree to some core changes in how things are run.

"The changes would be that ITI would make decisions regarding safety issues, weather and vehicle safety. And let us discipline our own drivers," he said.

While Vineyard schools are under contract to pay Island Transport just over $1 million next year to drive and maintain the 22 school buses, Scott Dario said he'd like to see the schools pick up a greater share of insurance and fuel costs.

"There's a huge misconception about how much this company makes," said Scott Dario. "There's a lot of money channeled through Island Transport but it doesn't take into account all the expenses."

So far this week, neither of the Darios has met or even talked officially with Mr. Cash or school committee members. Island Transport was not invited to Tuesday's meeting.

"You lose that privilege once you make those kind of libelous charges," said Mr. Cash.

Lawyers for both sides are now negotiating, he added. School officials plan to meet informally today and then officially again on Monday at 10:30 a.m. in the library conference room at the Martha's Vineyard Regional High School.

Mr. Cash is counting on the attorneys to have gathered enough information so he and school committee members can decide whether it's possible to mend the rift.

"It's a legal issue for us right now," said Mr. Cash. "We need to determine exactly what Island Transport's intent is."

Despite the uncertainty caused by this friction between school leadership and the bus company one month before classes start, Mr. Cash is adamant that buses will be ready to roll come September.

"We will have quality transportation for the kids," he said.

Mr. Cash has instructed the schools' bus administrator, James Maseda, to begin evaluating the school buses and drafting a plan for running all facets of student transportation.

"What will it take to get them on-line in 30 days?" is the question Mr. Maseda has to answer by Monday.

If Island Transport turned over the busing job to the schools, Scott Dario said his company would assist with the transition.

"We're willing to help them through the process . . . persuade drivers to work for them so there wouldn't be a lack," said Scott Dario. "We don't want the community to get affected by this.

"We certainly don't want to jeopardize the kids," he added.

Scott Dario offered another possible scenario that could resolve his company's differences with the schools.

He said Island Transport might be willing to handle management of the bus operation - coordinating drivers and schedules - for roughly $60,000 to $75,000 a year, leaving the schools to cover all the overhead: fuel, insurance, drivers' payroll, maintenance and the loan payments on the buses themselves.

Currently, Island Transport leases the buses from the school system for $365,000 a year. The bus company, based in Oak Bluffs, also maintains and repairs the buses.

By the time state aid for school transportation is factored into the equation, it costs the Vineyard public schools about $550,000 a year to fund transportation for the 1,536 students who ride the bus Island-wide. The Edgartown School handles its student busing separately.

A little more than a year ago, the Darios threatened to suspend bus service in the middle of a school day in June unless the regional high school and up-Island regional school district paid Island Transport more than $100,000 for transportation of special needs students.

School officials grudgingly agreed to pay the costs to ensure students wouldn't be stranded. More negotiations followed.

"We decided to split the maintenance and repairs 50-50," said Amy Tierney, the assistant to the superintendent for business affairs.

The schools also struck a deal to pick up the cost of paying drivers who transport special needs students.

Diane Wall, chairman of the All-Island School Committee, said "There's no question there's going to be bus service, but I don't know if it will be Island Transport."

The problem could boil down to money. "We've been trying to save money," she said. "And they're trying to make money."