Is anyone out there knowledgeable about fiscal planning? NYC needs you.
|NYC yellow school buses parked at the bus depot in Bergen Beach, Brooklyn|
Photo: Paul Martinka
This has to hurt many New Yorkers painfully without money or food after being laid off, or worse, ill with COVID or grieving the death of a loved one.
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The city’s controversial school bus bailout has a nearly billion-dollar price tag.
City Department of Education officials have quietly disclosed plans to spend $890 million on school bus services run by a city-owned nonprofit, which bailed out and took over a politically-connected operator earlier this year.
Documents filed with the DOE’s advisory body — the Panel for Education Policy — reveal that the DOE plans to enter into a five-year contract with the nonprofit NYC School Bus Umbrella Services for the eye-popping sum.
The paperwork did not divulge separate acquisition costs or if the city would be on the hook for roughly $142 million in pension liabilities.
Under the deal, the entity would manage more than 800 of the city’s school bus routes.
The details emerged a month after city officials announced the takeover of Reliant Transportation, which was co-owned by Alex Lodde, a key donor to de Blasio’s failed and scandal-ridden 2014 effort to bankroll a Democratic majority in the state Senate.
“There are more questions than answers in this deal and given the lack of transparency there isn’t a good case to be made that this is done with the benefit of New Yorkers in mind,” said Staten Island City Councilman Joe Borelli. “We’re not even buying a bus company that managed to make a profit.”
At the time of the takeover, city officials asserted that NYC BUS is a nonprofit independent of city government.
“No one owns it. It’s an independent nonprofit,” DOE spokeswoman Danielle Filson said in an October email exchange with The Post. “It’s a private entity, not a wholly-owned subsidiary. The city doesn’t own and manage the assets – the not-for-profit does.”
But the documents filed with the PEP tell a different story, reporting that NYC BUS was “formed by the City of New York, in coordination with the DOE as an integral component of the provision of school bus services.”
The filings also reveal that the nonprofit’s five-person board will be entirely selected by City Hall and Schools Chancellor Richard Carranza.
“The board will be composed of five members, including two ex-officio members (the Chancellor of the Department of Education and the Director of the New York City Office of Management and Budget, or their designees) and three members appointed by the Chancellor, one of whom will be a parent representative,” the documents state.
City Comptroller Scott Stringer said he would scrutinize the arrangement Thursday.
“The Comptroller has long raised concerns about the DOE’s procurement protocols, especially in school bus contracts,” said spokesperson Hazel Crampton-Hays, in a statement to the Post “In a time of fiscal uncertainty, every penny counts. We will scrutinize this deal to ensure accountability, fiscal responsibility, and the safe transportation of our children to and from school.”
Filson declined to reveal the acquisition costs or to clarify the city’s exposure to pension costs.
“Without knowing the cost of the company and what kind of debt the city may be assuming, it is impossible to tell whether this is a good deal or not,” said parent advocate Leonie Haimson. “In any case, for the DOE to take on more financial risks and obligations at this time seems irresponsible, given the economic crisis we face.”
Filson said Thursday that the arrangement will ultimately lower costs and that NYC BUS will operate independently.
“This five-year investment in the safety, reliability, and oversight of bus service is in the best interest of our students and minimizes costs of outsourcing to a private, for-profit vendor,” she said. “It will exist as an independent nonprofit with a majority of board members not affiliated with the City, and the City will not own or manage the assets.”