Sunday, February 04, 2007

That Makes Sense

If you've been following the public school bus reorganization disaster story here in NYC (see here and here), you know that Mayor Moneybags Bloomberg and Chancellor Joel Klein hired an outside consulting firm, Alvarez & Marsal, for close to $17 million dollars a year "to cut waste" in the New York City public school system and save city taxpayers money. Before we even get into just what a disaster the bus reorganization has been, let us note that Mayor Moneybags and Chancellor Klein started their waste-cutting campaign by giving Alvarez & Marsal carte blanche to charge as much dough as they want to their expense accounts while they look for ways to cut spending in the school system. Michael Daly has the story in today's Daily News and I post it here in full so you can see just how disgusting and hypocritical Bloomberg, Klein and these people at Alvarez & Marsal are:

At least in St. Louis, the consultants from Alvarez & Marsal had to submit receipts for their living expenses as they cut school costs and sent student busing into chaos.

Here in New York, they just get a flat living allowance of 11% on top of outrageous fees that run as much at $450 an hour.

Which means they receive as much as an extra $49.50 an hour for expenses in the very city where their firm is based.

That compares with just $175 a day when they were working their supposed magic out in St. Louis in 2003.

But as shocking as the New York numbers are, one of the smallest receipts from St. Louis provides the deepest insight into the soul of this firm that has now created similar havoc for our bused school kids.

Before we get to that smallest of receipts, it is worth taking an overview of Alvarez and Marsal's expenses during its $5 million contract to overhaul the insolvent St. Louis school system.

In New York terms anyway, the consultants do not seem to have run up particularly extravagant tabs at the local hotels and restaurants. They generally kept to or even a little under the $125-a-day provision for lodging and the $50 per diem for meals.

"By all indications, the education reformers are enjoying a comfortable stay," a St. Louis reporter did note. "Hotel receipts turned in show honor bar use, laundry service, valet parking and room service fees."

The reporter pointed out that if the consultants were interested in cutting their own costs, a very nice hotel near the school headquarters offered a nifty suite along with a kitchen for $57 a day. The reporter further noted something top consultant Sajan George said after canceling the school system's contract with a restaurant that provided $6 lunches for noontime meetings.

"You can bring your own," George was quoted saying.

But one area where the consultants stepped well beyond reasonable bounds was transportation. A senior consultant was reimbursed $148 for cabs even though he had a $255 car rental in the same two-week period. He also put in for $1,452 to fly in from New York and back, as well as $1,103 to fly to Savannah, Ga.

Another consultant put in for a $151 cab ride from her home in Connecticut to LaGuardia Airport, where she caught an $840 flight to the broker-than-broke schools in St. Louis.

All this was during the same period the consultants were preparing to slash school bus routes in St. Louis.

Which brings us to that smallest of expense vouchers.

Even as they were defending the bus cuts by saying it was fine for a youngster to trek a mile through the worst of neighborhoods, one consultant sought reimbursement of $4 for the cab she took rather than walk four-tenths of a mile from school headquarters to a high-rise apartment building.

Maybe such particulars in St. Louis embarrassed even Alvarez & Marsal. And perhaps that is why the firm is reported to have arranged a flat 11% expense fee in New York.

Sure, the same guy who told educators in St. Louis you can just bring your lunch is raking in almost $50 an hour in expenses along with a $450-an-hour fee that should add up to $1.7 million over the 18 months of the contract.

But there are no telling particulars, no indecent indulgences while asking youngsters to sacrifice, no evidence of snug rides even while kids stand in the cold, no cab receipts from a firm whose main office is just three subway stops uptown from our Department of Education headquarters.

Until now, it has seemed only ironic that the campaign to save our schools is based in a refurbished courthouse still named after Boss Tweed.

The famously corrupt Tweed at one point quit the U.S. Congress because there were much better opportunities to steal with the Board of Education.

But not even Tweed could have schemed up a completely legal no-bid contract where consultants from a New York firm cut school costs while raking up to $450 an hour as well as nearly triple the living expenses they received when they were out of town in St. Louis.

As you walked past the edifice that bears his name yesterday morning, you could hear Tweed cheering from beyond the grave.

"Genius! Absolute genius!"

If the consultants truly are looking to cut transportation costs, I have an idea, and I will not even charge expenses for the 10 seconds it took me to think it up.

Why not issue each consultant a free MetroCard such as those now being issued to kids as young as 5 to get to school? The consultants could then return whatever portion of their expenses was devoted to getting themselves to and from work.

Meanwhile, we might ask why the Department of Education is incapable of cutting its own costs, why we instead spend millions on a firm so callow it once billed an insolvent school system $4 for riding less than half the distance it was saying school kids would just have to walk.

As bad as it is for an Alvarez & Marsal consultant hack to charge a client for a 4 tenths of a mile cab ride while forcing 7 year olds to walk twice that far through dangerous neighborhoods to get to their bus stops, what's worse is that many of the cost-cutting decisions in the bus reorganization plan the consultants at Alvarez & Marsal came up with make no sense and will save little-to-no money. Take this one:

John Frazzetta of Staten Island wondered what lame brains were behind the "ridiculous" rescheduling. He said his son's bus stop was changed from in front of their home to three blocks away.

"All the children who get on the bus in front of my house can still do so, except MY SON!" said Frazzetta, whose son attends Public School 53 on Staten Island.

"The bus which my son would have to get on is the same bus which will stop in front of my house," he explained in an e-mail to The News. "So here is the situation: My son would have to leave the house in the morning, walk three blocks, get on the bus; then the bus will drive to my house to pick up other children."

$17 million a year to make that decision. Geniuses, right? How about this one:

Adrianne Buffa of Far Rockaway, Queens, said her 9-year-old son, Joshua, can no longer attend a morning program for gifted students at PS 333 because a computer has deemed him suddenly ineligible for bus service.

She bristled at officials for suggesting her son, who had been taking the bus for three years, take the subway.

"Where is the concern for our children's safety?" Buffa said. "With all that is going on in the world, I can't let my 9-year-old ride the subway alone. My son is very upset, and he feels as if the school has let him down."

Apparently the geniuses at Alvarez & Marsal believe this 9 year old should take the A train from Far Rockaway to 59th Street where he needs to change for the C train local to take him to his 96th Street stop and his three block and one avenue walk to school.

Meanwhile the Alvarez & Marsal consultant took a cab because she didn't want to walk four-tenths of a mile to get back to her luxury building.

Amazing, right? You can't make this stuff up. And yet Mayor Moneybags said at his press conference in Israel (this bus reorganization problem wasn't big enough for him to cancel a chance for him to polish his national security credentials for his upcoming presidential run) that the reorganization plan, while flawed, was the right thing to do and would continue unabated.

Sure the mayor says that - the mayor's 9 year old kid doesn't have to take the A train and the C train to school.

It all comes down to this - the mayor and the chancellor are concerned with cutting budgets ONLY if the cuts are aimed at bureaucrats, teachers, schools and most importantly school kids; when it comes to paying for private consultants and private firms to run the newly privatized (and continually privatizing) public school system, there is unlimited money and no accountability for cost overruns and/or incompetence.

As the mayor and the chancellor move forward this year with their privatization plan (because private enterprise is ALWAYS more cost effective, streamlined and efficient than government!!!), city taxpayers would do well to remember just how well the private employees of Alvarez & Marsal have done in reorganization plans of the school bus routes.

Because if the mayor and the chancellor get their way on the complete privatization of the school system, you can expect to have the chaos and stupidity that characterizes the Alvarez & Marsal bus reorganization plan infect the entire school system.

POSTSCRIPT: And just in case you think privatization of public school systems has worked in the past and will work again in the future as long as the firms hired are NOT Alvarez & Marsal, think again. NYC Educator covered that part of the reorganization scam here. Take a look.

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