More wasteful DOE spending on busing, devices, and possibly School Safety Agents to come

The Panel for Educational Policy will vote on a new batch of DOE contracts this Wed. on February 24. As an elected official wrote me over the weekend, “Am looking at PEP Contracts – some are questionable.”  I replied, “Always! Which ones now?”

Here are some:  There are retroactive contracts totaling more than $58 million for school busing, mostly for the month of January, except for a Reliant bus contract for Jan. 15 through Feb. 14 for $14.6M. 

This is despite the fact that DOE created a separate non-profit company (with less transparency) that would acquire Reliant and operate its 835 routes from January to June of this year, for a total of $59 million, according to  the contracts approved at the Dec. 4, 2020 PEP meeting. 

This new proposed contract document explains:

This emergency has risen as a result of the need to provide pupil transportation during the 2020-2021 school-year, while the DOE completes individual negotiations with Reliant for their pupil transportation services. These transportation services are necessary for the preservation of the health, safety, and general welfare of students and the school system as a whole. As such, declarations of Emergency Procurement and Emergency Implementation of contracts by the Senior Executive Director for the Division of Contracts and Purchasing and the Chancellor, respectively, were made (see attached).

Unexplained is what has caused the unanticipated extension of these negotiations with Reliant, and whether they relate to the  $142M in unpaid pension costs that the DOE insisted to the PEP and reporters they wouldn’t have to cover, but the union insisted they would. 

The proposed contract list also includes paying IBM another $5.12M to “stage” and send 55,000 new iPads, similar to the process from last year, when they paid IBM a total of $40.5 million for this purpose  $478 for each of 300,000 new iPads.  The document says DOE actually purchased 404,000 iPads last year – they must have added even more since last spring, for a total of 459,000 altogether, including these new purchases.

The document doesn’t include what DOE is paying for this new round of iPads, but as many previously pointed out, iPad are far less useful than laptops especially for middle and high school students who have to do a lot of writing and editing.  The excuse DOE used last year for purchasing only iPads at a total cost of $270 million was that there was a backlog and shortage of laptops nationally, with all the sudden school shutdowns and move towards remote learning.  Yet that didn’t stop other school districts like Chicago from ordering a mixture of laptops and iPads.  I don’t know what the excuse is this year for solely purchasing relatively expensive and less practical iPads again.

Apparently, for each shipment of iPads, IBM has charged a different price for staging and shipping, according to the document:

While IBM’s price of $93.55 per device to stage an additional 55K iPads is 11.6% higher than the previous price of $83.81 for 104K iPads, the increase is attributable to an expanded scope of services to be provided by IBM. For the 55K iPads under the expanded scope, IBM will receive, coordinate inventory, and distribute iPads to multiple IBM sites for staging, as well as provide boxes and packing materials to the vendor responsible for final distribution of the iPads to end users. [How this is different from what they did last time is not explained.] Moreover, IBM’s price of $93.55 per device is 30.7% lower than its price of $135.08 to stage 300K iPads under the prior emergency contract. Accordingly, pricing is determined to be fair and reasonable.

Moreover, it would probably save money for DOE to send these devices via school buses rather than pay IBM $800,000. Why?  Because Gov. Cuomo said last year and again this year that he will only reimburse busing expenses if buses are used to deliver either students, devices, other instructional materials or food.  [see the Governor’s Exec. Budget briefing book, p. 55 and p.56.]  This is what other NY districts used their school buses for during the school shutdowns, but not NYC.

Last year, DOE was prepared to pay 85% of the full price (about $700 million) for busing during the five and a half months when schools were shut (including summer school months) – despite the fact that no buses were being used.  After advocates made a fuss and Comptroller Scott Stringer wrote a letter in protest, the city renegotiated the busing contract, saving at least 40% or $167 million during the months of May and June. Yet as the NY Post reported, though the city usually receives 50% reimbursement for school busing costs from the state, for the 5 ½ months there was no busing, the city will not be reimbursed at all – potentially making busing even more costly to the city than during a normal year.  

The same refusal to pay any reimbursing for DOE’s busing costs may re-occur this year, as the DOE agreed that they would pay the full price for busing as long as ANY schools are open and there was no system-wide shutdown.  I don’t know how many buses are sitting idle this year, but there are likely quite a few.

In other budget news, a Council hearing last week revealed that the NYPD is considering hiring 475 more School Safety Agents this year at a cost of $20 million; even as all high school buildings remain closed, and elementary and middle schools have far fewer students attending in-person (that is, when middle schools reopen next week on Feb. 25.)  

Kenyatte Reid, executive director of the DOE's Office of Safety and Youth Development said his office was recently informed that the NYPD is bringing in the two new classes. He argued the money could be used for restorative justice programs, social workers, guidance counselors, culturally responsive curriculum development, literacy programs and community schools — all badly needed resources at the best of times, made more so by a pandemic that has upended the lives of hundreds of thousands of students.

This is really unconscionable, given the ongoing shortage of teachers and school counselors instead; and despite a promise made by the Mayor to the Council to eventually cut $1 billion from the NYPD budget and transfer School Safety Agents to DOE control.  Clearly that hasn’t happened.

Just to be clear: even though  NYPD hires & trains School Safety Agents, their costs comes straight out of the DOE budget, as the DOE forced to pay NYPD for their services whether they want them or not, at a price last year of $300M. From the testimony of the DOE official quoted above, it pretty evident that DOE does not want these new Safety agents that the NYPD wants to force on them. 

Contrast this to what's happened in Los Angeles, as well as Minneapolis, Seattle, Oakland, Denver and Portland, Ore., which according to today's NY Times, have begun to "sever or suspend their relationships with local police departments or reduce their own policing ranks. Some districts have said they are reallocating the funds to hire more social workers and mental health professionals to handle problems instead."

If the DOE had remained a truly independent agency, rather than under the sole control of the Mayor, they wouldn’t have to pay another $20 million for 475 more School Safety Agents that they neither need nor apparently want.

Today's Contract Committee meeting - disappointing with few questions & confusing answers from DOE

Above is the video from today's Contract Committee of the Panel for Educational Policy. It was a short meeting, mostly composed of Charlotte Hamamgian, the DOE Executive Director of Contracts and Purchasing, reading aloud the list of summaries of all the different contracts, which together cost about  $400 million this month. Only two PEP members asked questions, Kathy Park Price with a quick follow-up from Isaac Carmignani; unclear how many others listened in or if there was a quorum.

It was extremely disconcerting how the most elementary questions about the busing contracts were responded to with confusing, inadequate and sometimes downright contradictory responses from the DOE officials in charge. including Lindsey Oates, the DOE CFO and Sean Fitzpatrick, the executive director of the city Department of Education's pupil transportation unit.

• When Kathy asked about how much was paid to busing for the entire month of Sept. when schools were closed till Sept. 29, Lindsey Oates said 100% payments were made; adding that one or two days may have been at 85%.  Then Sean Fitzpatrick interjected to say that DOE paid Sept. 23 and 24 at the 85% rate, but after that at 100%. Isaac follow up to ask, so we didn't pay anything before then? and Sean said that was correct, appearing to contradict Lindsey Oates.  This left the actual amount of payments for Sept. as clear as mud. 
• Kathy then asked what was paid during March & April when schools were closed, Oates said we paid them  at "85% rate for the spring," making it unclear if she was referring to those months or the entire spring.  It was previously reported that only 40% was paid during May and June, although the DOE originally planned to pay 85% for these months, after I and others asked why and the NYC Comptroller objected.
  
•  Oates did explain that although more than 100 schools have been closed to in-person learning so far this fall, at least temporarily, this hasn't led to any busing savings, since the 43% clause is only triggered if the entire school system is shut down.  This means that even if more than half the schools are shut and no buses are used for those students, NYC still has to pay 100% of the full amount, or more than $1.1 billion a year -- for as long as every single school hasn't closed its doors.
  

Kathy also asked if parents are ever surveyed about their satisfaction with the performance of the bus companies.  The Charlotte Hamamgian said no, and claimed that the DOE had a "really rigorous performance evaluation process " for the bus companies, and that a lot of "due diligence" went into this. 

This claim was called into serious question last March by the NYC Comptroller here:

The Comptroller demanded answers about DOE’s persistent refusal to use rigorous and regular performance evaluations to ensure taxpayers are getting the services they pay for and that safety procedures are followed. Comptroller Stringer also raised alarms about DOE’s consistent failure to abide by even the most basic procurement protocols. In December, Comptroller Stringer returned $9.1 billion in school bus contract extensions after DOE failed to satisfactorily explain ballooning spending.

It would to nice to see a copy of the DOE's “rigorous” performance evaluations.

Kathy also asked why the DOE decided to extend the bus company contracts through 2025 at these terms. Sean Fitzpatrick said the the major benefits were to keep the busing contracts "solvent" and ensure the companies have personnel on hand. Yet these long-term extensions seem very unwise, especially  given huge uncertainties about future school closures and the current economic crisis which may cause even more radical budget cuts to schools; not to mention t that this administration will leave office in 2021.  Hamamgian said they would bring the DOE planned acquisition of Reliant bus company costing many more millions of dollars to the PEP at a future meeting.

There remain many more unanswered questions that I included in my memo to PEP members last week. Let's hope more questions are asked at the full PEP meeting on Wed. Oct 21 at 6 PM; more info including agenda here, with a link to the proposed contracts.  You can listen or sign up to speak starting at 5:30 PM here.