Presented Before the New York City Council Committees on Education and Finance
As Prepared for Delivery by Chancellor Dennis M. Walcott, February 8, 2013
Good afternoon Chair Jackson, Chair Recchia and all the members of the Education and Finance Committees here today. I am joined today by Eric Goldstein, Chief Executive Officer of the Office of School Support Services, and Mike Tragale, Chief Financial Officer of the DOE.
Thank you for the opportunity to discuss the cost of pupil transportation in New York City.
First, I would like to acknowledge how challenging the past month has been for our students and their families who depend on bus service. We know that this unnecessary strike has created hardships for many families, particularly for students with disabilities who have the most specialized transportation needs. I’d like to briefly note the work we are doing to communicate with families and provide assistance throughout this trying time.
In December, the City began to warn parents about the possibility of a strike and outlined the steps we would take to help parents get their children to school. These plans included providing parents and students with MetroCards, and reimbursing parents for the expense of driving their personal cars or for out-of- pocket costs for taxis and car services.
Once the strike began, we worked to expand options for families so that we could help more students impacted by the lack of bus service get to school. In response to feedback we have heard from parents, principals and community leaders, we extended parent MetroCards to parents of students in grades 3 through 6. We partnered with the Taxi & Limousine Commission to set up a voucher program so that qualified families may use private car services and not pay out-of-pocket expenses that they cannot afford. We are also working with Access-A-Ride to waive pre-application requirements for students, and with the bus companies who are still running routes to pick up additional passengers.
We anticipated this strike because it is the same tactic the union threatened to use in November 2011, when we released a new competitive bid for pre-K busing contracts. The goal of the bid then—as it is now—was to improve bus service and control costs. We redesigned service zones, making it easier to establish routes. Bidding was opened to the marketplace, which stimulated greater price competition. This bidding process resulted in a projected savings of $95 million. The success of bidding out these pre-K contracts has reinforced our commitment to a competitive bidding process for these services. This brings us to where we are today.
The bus contract bid is a necessary process that will both improve service and better manage our costs. Costs are driven by the number of students who receive busing, the number of buses required, and the costs associated with operating each bus. The basic demand for busing has increased and will continue to grow. We consistently receive requests to add services, approve exceptions, and expand the availability of bus services to more students. However, if we are unable to manage costs, at some point we will have to curtail services. In order to avoid a potential reduction in service and generate savings that will be funneled back into our classrooms, we had to take action.
In December, we issued a Request for Bid (RFB) for 1,110 school-age special education bus route contracts that are set to expire on June 30. This is our first major bid for school-age busing in 33 years and we issued the request in December so that we could have new contracts in place by the start of the next school year. As you know, the contracting process begins with request for bids and can take many months to finalize, which is why any delay will result in new contracts not being in place in time for the new school year. A delay is both unacceptable and unnecessary.
The 1,100 contracts released for bid are worth approximately $1 billion over the next five years. There are many changes in the RFB that can help make busing for our students more efficient. For example, we can use low-seating capacity vehicles for routes that serve a small number of students; establish flexible service periods to better meet the scheduling needs of students and schools; and require the installation of two-way radios with built in GPS antennae on all buses.
As you know, Local 1181 of the Amalgamated Transit Union, one of the unions representing bus drivers and attendants, called the strike because the RFB does not contain an Employee Protection Provision (EPP). This provision would allow bus drivers and matrons who work for a company that loses bus routes to go to any other company that has an available job and get hired at their current rate of pay. The new bus company would not have a say in who gets hired or how much they are paid. This provision makes it extremely difficult for companies to bid on routes because they cannot predict or control the costs of operating their buses.
Based on the New York State Court of Appeals ruling last year, it would be illegal for the DOE to include an EPP in this busing bid. The court found that EPP provisions tend to inflate bids. Additionally, Westchester, Long Island, New Jersey and Connecticut have school busing contracts that do not include an EPP. Without this provision, these districts continue to provide transportation services to their students efficiently and safely, while managing costs.
This is our goal.
The bids for new bus contracts are due on Monday, February 11 and will be opened on Tuesday, February 12. It will take time to evaluate the bids, determine whether vendors can meet the requirements, and award and register contracts.
If we do not move forward with these bids, we risk not having bus service for students in September.
We urge Local 1181 to call an end to this unnecessary strike, to work with the bus companies to address their mutual interests, and to get back to providing services to our students.
Thank you again for giving me the opportunity to testify here today. I will answer any questions you may have.