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Behind the Bus Botch
February 1st, 2007

Anyone who thinks the private sector always does a better job than government might want to look at this weeks school bus fiasco. “The plan to consolidate city school bus lines has left parents raging at Schools Chancellor Joel Klein and Mayor Michael Bloomberg,” according to todays Times. And it turns out the scheme was not hatched by educrats at Tweed Courthouse but, according to the Daily News, by Alvarez & Marsal, a pricey private consulting firm that the education department hired last year at a cost of $15.8 million to suggest ways to save money. The bus changes were originally supposed to slash $20 million, but thats since been revised to $12 million

In an editorial, the News questions the figures behind what it sees as a numbskull decision. Let’s do the subtraction, it says. How much is being spent rerouting buses to fix the problems created by the changes? How much was spent mailing out 130,000 completely vague notices to parents? How much to field all the phone calls coming in?

And Public Advocate Betsy Gotbaum sees red flags. It is a troubling sign that one of the first Alvarez & Marsal initiatives involves the cutting of a vital service that has a direct effect on students. More troubling is the reckless manner in which the bus route cuts were structured, she said in a letter to Klein released to the press. If these are the kind of ideas that A&M is bringing to the table, then it is incumbent upon you and your staff to say thanks, but no thanks.… and move to terminate A&Ms contract.

This is not the first time Alvarez & Marsal has come under attack. When the firm got the contact last year, the News reported that it is billing taxpayers as much as $450 an hour for consultants’ time plus charging as much as $500 per day per employee for unspecified expenses including the cost of living in the city.

And, like some other contractors hired by the Department of Education, it got the work without having to go through a bidding processing. Even though Bloomberg has repeatedly said that he and he alone controls the schools, the department wriggles out of the contracting rules that apply to other city agencies by saying the education department is an agency of the state. Such convoluted reasoning and the hiring of Alvarez & Marsal prompted City Comptroller William Thompson to say in September, The Department of Education is not above the law even if they act as if they are.” And City Council education committee chair Robert Jackson, complained, “There is virtually no oversight of the Department of Educations contracting practices even though D.O.E. is the single largest purchaser of goods and services among city agencies.

Questioned about the deal, contracting chief David Ross told an irate City Council committee that “everyone knew” Alvarez would win the contract so there was little point spending time on competitive bidding. How did they know Alvarez would win? the Voice reported. Well, Alvarez had done work in other cities, but most importantly, Ross said, They had people on the ground. Why did they have people on the ground? Because Alvarez was already working in the schools on a contract funded by the private Fund for Public Schools. Who chairs the Fund for Public Schools? Chancellor Joel Klein.”

The firms other big educational clients have been New Orleans and St. Louis. In New Orleans, Hurricane Katrina derailed its efforts. And in St. Louis, according to the Sun, the firm patted itself on the back for a job well done, saying the district no longer faced bankruptcy. But that judgment may have been premature. Last December, the district teetered on the financial brink and was in danger of losing its accreditation. The president of the school board, Veronica O’Brien, blames her own agency’s incompetence for the problems, but she added, Alvarez & Marsal “weren’t that great of a help.

By on February 1, 2007, 1:19 pm
In category: Education,Gotham City,Public Finance,Transportation | 2 Comments »

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2 Responses to “Behind the Bus Botch”

  1. killionmiles Says:
    February 7th, 2007 at 6:30 am

    The bus fiasco is a result of giving Bloombergklein “mayoral control” of the schools. As an ex-teacher at a large high school, I witnessed how Bloombergklein ruined our school by “enrolling” too many underqualified students. That school will probably be closed down soon. As with every other major policy decision Bloombergklein makes, the bus route change essentially cannot be disputed or debated…and will not be rescinded. Bloomberg calls the shots and then closes his ears to all critics. Giving him mayoral control was an enormous error. I am so thankful that I am out of the school system now.

  2. Kathleen Says:
    May 20th, 2012 at 10:18 pm

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