HOW TO HANDLE NYC DOE SCHOOL BUS COMPANY CONTRACT PAYMENTS DURING COVID-19

I. Introduction

Recently, the Department of Education’s Panel for Educational Policy postponed review of school bus contract extensions for March and April. The contracts were implemented at the beginning of March as a result of an emergency declared by the Department of Education. These contracts were extended to avoid significant consequences that goes along with shutting down an industry of over 8,000 essential special and general education school bus routes and putting out of work 13,000 trained and certified drivers, matrons, mechanics and dispatchers who will be needed to provide required education transportation to 150,000 students when schools reopen. Putting the brakes on school bus funding would have a disastrous impact on the industry, our city and its school children.

The industry must stay solvent in order to run safe, smooth and timely operations once school starts. Furloughing workers is not necessarily a savings as they will still need to collect unemployment. Even without the labor costs, school bus transportation systems still have essential operating expenses to meet every week and month including financing, insurance, maintenance, real estate, parts, employee welfare/pension benefits, admin staff, training, inspections, etc. It’s not as simple as the buses aren’t running, services are not rendered therefore we can remove it from the DOE budget. This is not “money down the drain” as a tabloid newspaper recently sensationalized. It’s to keep the engine tuned and oiled when the wheels on the bus are ready to roll again.

Related Article: WHY SCHOOL BUS CONTRACTORS NEED TO BE PAID DURING COVID-19 OUTBREAK

II. Background

Over a year ago, the DOE and the Panel for Educational Policy approved five-year contracts with major school bus companies who provide 8,000 buses transporting 150,000 children throughout the five boroughs. Of those, 3,500 are general education and 4,500 are special education transportation services. Because the five-year contracts are still awaiting registration by the Comptroller, the DOE has been maintaining the transportation service by interim emergency extension contracts.

The bus companies employ over 13,000 bus drivers, attendants, mechanics and dispatchers who safely transport the children of NYC to their schools. Approximately 90% of the workforce are minorities.

By the four corners of the school bus agreements, the NYC Dept. of Education is contractually obligated to pay school bus companies 85% of their daily rate for school closings. It was an acknowledgement by the DOE that the Companies had fixed costs for their operations, including rent, mortgage payments, financing costs and contractual labor costs which did not abate for unexpected school closing. If the city were to renege on its obligation to pay the School Bus Companies (i) the 13,000 workers will need to be laid off with the loss of their health insurance during this global health pandemic; (ii) the fleet of 8,000 buses which are routinely serviced and maintained will be mothballed; (iii) it is estimated that at least one third of the bus companies will close their business, being unable to pay their debt obligations, rent, mortgages and other fixed costs; and (iv) the remaining companies will be unable to restart their operations in time for the reopening of schools.

The school bus industry has been already plagued with a national school bus driver shortage. Companies are diligently fighting to retain the staff they have. If these workers are laid off they will be forced to look for jobs and health insurance elsewhere resulting in a mass exodus of employees. Picture next September with only 5,000 drivers for 8,000 buses.

Related Article: RONKONKOMA COMPANY LAYING OFF 900 SCHOOL BUS DRIVERS, OTHER EMPLOYEES

Failure by the DOE to continue the contracted compensation will force marginal companies out of business. The ones that survive will need months of lead time to re-engage their services.

III. Services

There is a myriad of compliance’s and certificates that a driver and attendant must have and continue to hold, including but not limited to: 19-A medical examination report, state Department of Transportation (DOT) physicals, article 19-A road test, blood pressure/diabetes follow-ups, pass physical performance testing, annual and monthly abstracts (driver records), CPR and first aid certification, 13 county background checks, and other courses regulated by the New York State Education Department.

These compliance and regulatory requirements are still being conducted during the current shutdown without school in session. In fact, so are required vehicle regulations. Day after day our mechanics are maintaining vehicles to be inspected by the New York State Department of Transportation so that our school buses are safe and allowed on the roads.

These may not be the “services” the public are used to, but that is only because they are not privy to the behind-the-scenes work it takes to get a driver, an attendant, and a school bus on the road. These are in fact services, integral to the entire operation of school bus transportation. Without these services, there can be no transportation. Without having revenue to pay our employees to fulfill these services, there will be no transportation.

Related Article: Cash Strapped NYC Set to Poor $700M Down the Drain on Idle School Buses

IV. Continued Services

We understand the fiscal constraints the city is under right now. Since March the bus companies have been ready and able to provide the resources and transportation services to the City such as:

* Delivery of meals to children in need.
* Turn buses into Wi-Fi hotspots for students to access online learning.
* Picking up course work and dropping it off at students’ homes. Picking up learning tools and transporting them to school outlets such as iPads.
* Transport COVID patients from the hospital to hotels to quarantine and building a partition in our vehicles to protect the drivers from exposure.
* Transport nurses, military personnel, etc., via school bus so that they do not have to ride the subways and can maintain better social distancing.
* Delivery of PPE supplies to wherever needed

V. Reality and the Future

Schools will come back. In-class learning will resume and school buses will be needed to transport children to and from school. If the NYCDOE does not pay school bus contractors, the contractors cannot pay their employees. The employees will be laid off, driver certifications and the vehicle inspection stickers will fall out of compliance.

Cutting off school bus funding will be a temporary quick gain but a long-term loss for the 150,000 students who rely on this essential transportation. It will take months to get back into compliance to have vehicles inspected and approved for service by the Department of Transportation when they want to resume service. Getting a newly hired driver behind the wheel is a 4-6 week process. What will it be after the COVID-19 crisis? If there are thousands of vehicles that will have invalid DOT stickers, how long will it take to get those vehicles inspected and back into compliance? How will regulatory agencies be staffed? How quickly will they be able to process qualifications to put back employees into compliance? You just do not turn off a transportation system the size of most cities and turn it back on without months of delay.

Related Article: 4,500 School Bus Drivers, Their Co-Workers Left Jobless on Long Island

Along with the bus companies, the following unions will be severely impacted by termination of contracts TWU Local 100, Local 1181 ATU, Local 553 Teamsters, and Local 91 UBCIW.

VI. Conclusion

The bottom line is this: Stopping contractual compensation to the school bus industry now will result in substantial delay and additional costs when schools are re-opened. Maintaining an essential New York City public school transportation service is vital to a healthy and smooth restart of in-school learning.

This ARTICLE was written by Corey J. Muirhead and published on LinkedIn, on April 24, 2020 under the title “White Paper- How to Handle NYC DOE School Bus Company Contract Payments during COVID-19 ”. Corey J. Muirhead is the Executive Vice President of Logan Bus Company, Inc./ President of New York School Bus Contractors Association.