White Paper 

Cost Effective Proposals in the Deliverance of Goods and Services by The City of New York.

Executive Summary

The emotional consequences of the worst terrorist attack in our nation’s history took possibly its greatest toll on the most fragile members of society: our children. Now, the unavoidable economic realities of this tragedy threaten to add to this toll. However, in this time of fiscal austerity, while we balance our duty as both fiscal responsible agents and caretakers of the welfare of our citizens, we must not forget these fragile members who depend on us to put their interest as a priority over the interest of private companies and institutions.

The initial reaction in any city budgetary crisis has always been to reduce services in order to minimize cost. While a reduction of services may be eminent, we owe it to our children, and ourselves, to reexamine the way we conduct business in the City. We should explore other alternatives to reduce expenditures before we consider cutting these vital services. The City, in an attempt to deal with the financial shortfalls of September 11, has announced a 7% reduction to the New York City Board of Education. The definitive effect of these financial cuts, to an educational system that is already under-funded by the State, is unclear. What is clear is this, if we are going to get through it, we must all do our share. Therefore, in an effort to do ours, we are proposing a series of initiatives that would reduce expenditures while providing a superior service in the way the City delivers its goods and services: "better services for less".

These seven (7) cost-effective initiatives eliminate the use of private vendors and subcontractors, whose services are too expensive and inefficient, oppose the proposed return of administrative duties to pedagogues and eliminate administrative waste in the Board of Education.

We estimate that the implementation of these recommendations would save the city over $76 million annually, offsetting almost 25% of the initial $305 million reduction in the Board of Education’s budget. This estimate does not include any savings resulting from the elimination of any administrative waste.

 

Ì BACKGROUND

The Office of School Food and Nutrition Services, a division of the New York City Board of Education, has increasingly contracted out services to private vendors for delivering frozen and dry commodities to the City’s public and private schools. This policy has been in effect close to two decades and has allowed companies such as H. Schrier & Co. Inc. (formerly known as Libertoff, Inc.), Louis Foods, Chefs Choice and others, to bid increasingly for these delivery services. This course of action has not only proven to be expensive, but, also problematic and dangerous; expensive because the price-tag of deliveries performed by these vendors has cost the City up-to four times the amount of the current price of deliveries made by our members; dangerous, because these vendors often deliver frozen foods in non-refrigerated trucks: jeopardizing the integrity of the food delivered and is in direct violation of the recommendations made by the United States Department of Agriculture, pertaining to frozen foods.

To make things worse, these companies engaged in price gauging by monopolizing the current bidding system in an attempt to manipulate its outcome. It is estimated that the Board of Education lost over $126 million dollars to these companies, as is evidenced by the recent indictments and subsequent convictions of twelve (12) companies and twenty-one (21) individuals, who, from 1996 to 1999, rigged the contract bidding by a complex system of bribery (see attachment #1).

OSFNS, despite these problems, has not altered its strategy to hire these private vendors. Quite the contrary, it is seeking to expand its current plan by requesting that additional companies provide Request for Proposals (RFP’s) for additional deliveries (see attachment #2), to the detriment of the children it vows to serve.

 

Ì PLAN OF ACTION

OSFNS presently owns approximately thirty-five (35) trucks, but only seventeen (17) trucks are in operation. The other fifteen (15) trucks lie idle because OSFNS lacks a sufficient number of personnel to man them. These trucks are parked in a facility leased by OSFNS in Long Island City. Eighty five percent (85%) of these trucks are fully operational and ready for service. The other fifteen percent (15%) require only minor repairs that can easily be performed by OSFNS mechanics hired to perform these repairs. These trucks are all refrigerated and in total compliance with the recommendations made by the USDA’s principles of safety. These safety principles are outlined by the Hazardous Analysis Critical Control Points (HACCP) principles and use to monitor the delivery of foods from their source to the point of consumption.

A simple strategy of hiring the sufficient number of workers to operate these trucks can substitute the delivery of all donated frozen foods, without having to acquire any additional trucks or equipment. This would necessitate hiring thirty additional Loaders and Handlers and fifteen (15) Motor Vehicle Operators.

 

Ì SAVINGS

An evaluation of the current state of affairs reveals that the Board could save over twenty (20) million dollars a year. A sample evaluation of donated frozen items revealed a savings of almost $6.1 million dollars a year (see cost comparison #1), a figure that could more than triple if we include all other deliveries performed on a yearly basis by these private vendors.

 

Ì BACKGROUND

Since 1990 the New York City Board of Education has contracted the services of The United Way of New York to act as a managing agency between the Board and CBO’s. The United Way sub-contracts specific services needed under the second model. These services include outreach and support services to parents. The cost of this contract for the fiscal year 2001–02 is $14,567,000 (see BOE Calendar-May 16, section 9).

The decision to contract The United Way has proven to be dreadful. Since 1986 the average dropout rate for the schools increased from 16.6%, when the recording system was instituted and when our members performed these services, to 19.3% in 2001. This represents an increase of 2.7% or 1,737 additional students. The rate peaked at 20.5% in first the year of contract’s existence (1990) and again last year at 19.3%.

Additionally, funds that could be utilized to provide services to at-risk students are used to cover administrative overhead. Only $9.9 million dollars of the $14.5 million dollar contract reached these CBO’s (see attachment #3). This is almost 30% of the total funds that are diverted from the children of this city.

Finally, the lack of accountability in the system of delivery under this contract is evident. The Board of Education possesses no mechanism to verify whether these services have been delivered by the community-based organizations, or whether the individuals allegedly performing these services are qualified in their respective fields.

Therefore, we are proposing that these outreach services be reassigned to implement the support services division within the Board of Education. A new system should be developed to address the needs of the at-risk student population, using the system developed along the lines of the school based model that our Family Paraprofessionals and School Neighborhood workers are now delivering.

 

Ì PLAN OF ACTION

The implementation of this change in the Board of Education would be quite simple. The contract that the Board of Education has with The United Way expires on June 30, 2002. In preparation we can begin to strategize the implementation of a new system of delivering the mandated counseling/case management component, administered by the Division of Support Services of the Board of Education.

 

Ì SAVINGS

This termination of the service contract would save the City the fourteen point five ($14.5) million dollar contract now assigned to the United Way and still provide a better, more accountable services to the students that need it the most.

 

Ì BACKGROUND

Ì PLAN OF ACTION

Our proposal seeks the transfer of these responsibilities to our SAPIS counselors by the conclusion of these contracts (July, 2002). Staffing a minimum of one SAPIS counselor per school would save the Board of Education over ten million dollars and provide around the school clock service to the entire school population.

Ì SAVINGS

Which will result in a net gain of $10,423,173

Ì BACKGROUND

The New York City Board of Education, in an effort to raise academic standards and achievement for all students, negotiated in the 1996-97 school year a provision in the UFT contract that eliminated administrative duties from teachers’ responsibilities. The provision established the principle that all teachers would be relieved of traditional activities, including homeroom, cafeteria duties and other non-pedagogical tasks, giving birth to what is now known today as Circular #6. Circular #6 eliminated the contractual provision of compensatory time for teachers and transferred the responsibilities to the School Aides and to Supervising School Aides.

Recently, during negotiations, it has been reported that the city is seeking to eliminate Circular #6 as part of their negotiations with the UFT. This would be a monumental mistake with serious economical repercussions. It also would exacerbate the current teacher shortage by removing teachers from performing the much-needed instructional support services required by the students to meet the new stringent state academic standards.

Ì PLAN OF ACTION

• Status Quo.

Ì LOSS OF REVENUE

The crux of this proposal lies in simple mathematics: the difference between a School Aide salary plus fringe benefits and the cost of hiring a teacher, plus benefits, is very significant. Our school aides are hourly (part-time) employees who work four hours a day. The differential in salary and fringe benefits between a school aide’s salary at $19,449 a year (including fringe benefits and collective bargaining) and a teacher’s salary of $48,190 (including fringe benefits, but no collective bargaining) is substantial. The potential total loss of revenue created by the elimination of Circular #6 would exceed twenty point one (20.1) million dollars a year.

 

COMPARATIVE COST COMPARISON #3

TEACHERS VS. SCHOOL AIDES

Total Revenue Lost = $20,174,720.40

Ì BACKGROUND

New York State law maintains that the school system must provide a tracking-system to monitor student attendance of students in order to affirm the minimum number of instructional days required for student graduation. Student attendance in the school system has had a direct effect in their overall educational performance; if a child is not in school he/she cannot learn.

The Board of Education, in an effort to complete the mandated outreach services created approximately three hundred (300) attendance teacher positions and hired them to perform a number of auxiliary duties including outreach. This outreach necessitates making home visits and phone calls to parents. These teachers are working in conjunction with Local 372’s Family Paraprofessionals to reach students who have been delinquent in their attendance. In fact, the only difference between the responsibilities of a Local 327’s Family Paraprofessional and an attendance teacher is the ability to discharge students from the registry. However, dismissing of students from the system is not nearly enough to justify the existence of these 300 positions. As a result the Board of Education has been assigning these attendance teachers to make home visits, phone calls to the parents and general clerical duties that are part of the job description and responsibilities of Local 372’s Family Paraprofessionals.

Teachers belong in the classroom, as previously indicated, these pedagogues should be used to alleviate the existing teacher shortage that the school system is having while creating savings in the process.

 

Ì SAVINGS

The cost of employing these teachers is astronomical in comparison with the hiring of Family Assistants to perform the same duties. Whereas our members could perform the entire outreach component, as has been done historically, and with small amount of training could discharge students in the system. By replacing those 300 attendance teachers, we would save $7.5 million dollars.

 

COMPARATIVE COST ANALYSIS #4

ATTENDANCE TEACHERS VS. FAMILY PARAPROFESSIONALS

Ì BACKGROUND

The Drug Abuse Resistance Education Program (DARE) is a nation-wide program that utilizes uniformed police officers to promote drug prevention in the schools. Since 1996, the City of New York has employed the services of one hundred (100) police officers form the NYPD to travel throughout the city’s elementary schools to lecture kids about drugs. After the September 11 terrorist attacks, the DARE officers were assigned to Ground Zero and other locations throughout the city. But, since February, these officers have returned to their assigned programs.

The DARE program may be a well-intentioned drug prevention program with a noble cause, but, is also an ineffective, costly proposition, that undermines the role of police officers and professional school drug prevention specialists.

Ì PLAN OF ACTION

We are proposing a less expensive alternative, that would substitute these DARE officers with Certified Substance Abuse, Prevention and Intervention Specialist (SAPIS) counselors under the New York State mental health laws at total savings $2-3.3 million dollars, even as we provide a proven effective way to prevent drug use and violence.

Ì SAVINGS

The average annual salary of a police officer prior with five years of service is $47,499 (without collective bargaining increases), and $60,027 after five years of service. Compare that to an average annual salary of a SAPIS counselor of $26,622 (includes collective bargaining).

 

COMPARATIVE COST ANALYSIS #5

100 POLICE OFFICES Vs. 100 SAPIS

$4,749,900 - $2,662,2000= $2,087,700

$6,002,700 - $2,662,200= $3,340,500

Ì BACKGROUND

The New York City Board of Education recently completed renovations of two (2) of its downtown buildings (110 Livingston Street and 131 Livingston Street). Chancellor Levy has announced that in an effort to improve services he would decentralize some administrative positions at Central Headquarters. This decentralization resulted in the realignment of different departments into other district office buildings leaving the building facilities virtually empty.

It has been reported that over the last six months the Chancellor has been renting the 27^th and 28^th floor of the Brooklyn Marriott Hotel, which is used as office space for the Department of Instructional and Information Technology (DIIT), and other alternative administrative uses. We think that at a time of fiscal crisis, funds should be utilized in a more responsible manner by moving these pricey office spaces in to one of the three (3) buildings owned by the Board of Education.

CONSULTANT SERVICES

The utilization of retired principals and attorneys to serve as consultants has been a policy that has propagated throughout the school system (see attachment # 7). Every dollar used for these high priced consultants could be a dollar used to improve the education of our children. Years ago, the responsibility of holding disciplinary hearings and grievances was assigned to principals, directors of personnel and superintendents in accordance with prescribed contractual provisions. During the last few years, however, these responsibilities have been assigned to consultants who get paid an obscene amount of money to perform some of the duties administrators are hired to do.

RUBBER ROOMS

In January 2001, as part of his First Year report, Chancellor Levy announced he was adding the services of twelve additional attorneys (mostly as consultants) to the Office of Labor Relations in order to expedite the arbitration process for teachers and principals. These teachers and principals were being assigned to "rubber rooms", reassignment areas with pay, when they were accused of committing flagrant violations against the system and removed from having any contact with the children, pending conclusion of the investigation. In some cases these individuals were reassigned for years to non-functional positions.

The process of assigning teachers and principals to district offices has decreased but has not stopped completely. OSFNS and PSAL currently have a teacher and a high school principal assigned to their offices for years, without a final disposition of their cases. We believe the money for their salaries could be put to better use on behalf of the children of this City.

 

OVERALL SYSTEM ANALYSIS #6
SAVINGS

 

Replacement of Private Delivery Vendors                                                        $20 million dollars

Elimination of United Way Contract                                                                         $14.6 million dollars

 

Utilization of SAPIS Counselor over Private Vendors                            $10.4 million dollars

Prevention of Lost Revenue by maintaining Circular #6                   $20.2 million dollars

Replacement of attendance teacher with                                                       $7.5 million dollars
Family Paraprofessionals/SNW

Replace of DARE officers with SAPIS                                                                      $ 2- $3.3million dollars

 

 Total:                    $76 million dollars

 

September 11 has shown us that the courage of the citizens of this City is insurmountable, and, in the face of adversity, we have risen from the ashes of despair to the triumph of the human character. It is time we all display the same courage to implement policies that put our children and our citizens first and have the character to carry them through. "Better Service for Less" opens a door to provide opportunities to save and alleviate the economical burden our children and workers have suffered. It’s time we take a step to walk through this door with the same courage and fortitude.