School busing giant files for bankruptcy

Posted November 7, 2013 By Emmanuel Felton

Atlantic Express, which ran one in four of New York City’s school bus routes last year, filed for bankruptcy Monday night. Its largest creditor, the union representing school bus drivers and escorts, is owed more $13 million in back wages, according to the bankruptcy filing with the U.S. District Court for the Southern District filed by Atlantic and affiliated companies.

It has been a difficult year for the bus giant, which was hit hard not only by the Bloomberg administration’s efforts to reduce the costs of busing the city’s students but also by Hurricane Sandy’s flood waters, which swamped some of its fleet.

Atlantic Express, once the city’s largest transporter of school children, has declared bankruptcy. Photo: Dr. Canon/Flickr

Earlier this year, the Department of Education successfully rebid hundreds of yellow bus routes in a process that allowed smaller transportation companies with less expensive labor costs to underbid unionized stalwarts like Atlantic Express. Under the new contracts, bus companies were no longer required to provide workers with the kind of pay and benefits packages that Atlantic Express had already agreed to with Amalgamated Transit Union Local 1181, the union representing school bus drivers.

“Quite simply, our current business model in our largest market, New York City, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations,” said President and CEO David Carpenter. “Following a lengthy review process, and with the assistance of independent financial and legal advisors, our Board of Directors determined that a court-supervised process is the only feasible course of action.”

In April, company spokesperson Carolyn Daly told The New York World that the company had been “hard hit by the new bidding” process.

“Labor costs are so high we won’t get picked,” added Daly.

Michael Cordiello, president of Amalgamated Transit Workers Local 1181, lay responsible for the bankruptcy at the feet of the company, not the city.

“If Atlantic were truly concerned about avoiding Chapter 11 bankruptcy,” Cordiello said in a written statement. “They should look at the ludicrous amount of money they’ve spent on failed bargaining and litigation aimed at driving workers into poverty over the past year.”

Marge Feinberg of the New York Department of Education said that the department is not anticipating any immediate impact on school bus service.

The Department is owed $2.6 million by Atlantic Express. The city’s Law Department says it is currently unable to identify the nature of the claim.

“Atlantic just filed its paperwork,” said Elizabeth Thomas. “The documents are voluminous, and the City is assessing and reviewing the matter carefully.”

UPDATED Nov. 12, 2013:

City vows to continue cutting costs on bus contracts

On Monday, Mayor Michael Bloomberg and Schools Chancellor Dennis Walcott announced that the new school busing contracts that it had opened for bidding earlier this year had resulted in $210 million in savings over the coming five years — and that they expected to open up bids for another 4,100 bus routes whose contracts will soon expire.

“The bids we received surpassed our savings estimates and gives us more money to invest in ensuring New York City schoolchildren are receiving the best education possible,” said Bloomberg.

The union representing many of the bus drivers charged that such savings came directly out of workers’ pockets.

“Because of the new contracts imposed last spring, companies are taking new, less experienced workers at much lower rates,” said Cordiello, president of Amalgamated Transit Union Local 1181, in an email. “Any money the city may allegedly be saving due to these contracts is solely on the back of the city’s safest, most experienced workforce.”

Bidders on the new contracts were not required to retain drivers with seniority, whose jobs had previously been protected, or provide the levels of pay or benefits agreed on in bus companies’ contracts with the union.

Cordiello scoffed at the mayor’s claim the new contracts saved the city substantial sums. He said that the costs of a bitter strike last winter and lawsuits over pension funds could add tens of millions of dollars to the city’s school transportation costs.

“The Department of Education,” said Cordiello, “has never proven any of these alleged cost savings.”

The transition team for Mayor-Elect Bill de Blasio has said it is premature to comment on the expiring school bus contracts.

The New York World is published under Creative Commons' BY-ND 3.0 license. Unless otherwise noted, you are welcome to reprint The New York World's reporting. Except by prior arrangement, the following guidelines apply:

Credit The New York World, preferably by appending “The New York World” to the bylines already on the stories. Bylines must remain in the stories.
Do not edit stories, except to reflect relative changes in time or location (eg. “Yesterday, following months of uncertainty, Governor Cuomo...” may be changed to begin “In January,” or “Early this year”)
You may edit stories to accommodate style variations or to expand acronyms (eg. “TWU Local 100” may be written “Transport Workers Union Local 100”)

Stories reprinted online must:

include a link to the original story on http://www.thenewyorkworld.com
retain all links included in our original reporting
Retain in republished HTML a simple tracking code, provided in the body of each story as published on The New York World website.
include a syndication source tag directing search engines to the original story in The New York World
Do not republish The New York World wholesale or automatically
Contact our editor with any questions about this policy or to make arrangements to reprint The New York World stories under other terms.
This reprint policy is subject to change.

<h1>School busing giant files for bankruptcy</h1>Atlantic Express, which ran one in four of New York City’s school bus routes last year, filed for bankruptcy Monday night. Its largest creditor, the union representing school bus drivers and escorts, is owed more $13 million in back wages, according to the bankruptcy filing with the U.S. District Court for the Southern District filed by Atlantic and affiliated companies.
It has been a difficult year for the bus giant, which was hit hard not only by the Bloomberg administration’s efforts to reduce the costs of busing the city’s students but also by Hurricane Sandy’s flood waters, <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/2012/11/01/school-buses-swamped/');" href="http://www.thenewyorkworld.com/2012/11/01/school-buses-swamped/">which swamped some of its fleet.</a>
<div id="attachment_13061" style="width: 310px" class="wp-caption alignright"><img aria-describedby="caption-attachment-13061" class="size-medium wp-image-13061" alt="Atlantic Express, once the city's largest transporter of school children, has declared bankruptcy. Photo: Dr. Canon/Flickr" src="http://www.thenewyorkworld.com/wp-content/uploads/2013/11/bus-300x169.jpg" width="300" height="169" srcset="thenewyorkworld.org/wp-content/uploads/2013/11/bus-300x169.jpg 300w, thenewyorkworld.org/wp-content/uploads/2013/11/bus-352x198.jpg 352w, thenewyorkworld.org/wp-content/uploads/2013/11/bus-500x281.jpg 500w, thenewyorkworld.org/wp-content/uploads/2013/11/bus.jpg 568w" sizes="(max-width: 300px) 100vw, 300px" />Atlantic Express, once the city’s largest transporter of school children, has declared bankruptcy. Photo: Dr. Canon/Flickr</div>
Earlier this year, the Department of Education successfully rebid hundreds of yellow bus routes in a process that allowed smaller transportation companies with less expensive labor costs to underbid unionized stalwarts like Atlantic Express. Under the new contracts, bus companies were no longer required to provide workers with the kind of pay and benefits packages that Atlantic Express had already agreed to with Amalgamated Transit Union Local 1181, the union representing school bus drivers.
“Quite simply, our current business model in our largest market, New York City, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations,” said President and CEO David Carpenter. “Following a lengthy review process, and with the assistance of independent financial and legal advisors, our Board of Directors determined that a court-supervised process is the only feasible course of action.”
In April, company spokesperson <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/2013/04/05/breaking-up-big-busing/');" href="http://www.thenewyorkworld.com/2013/04/05/breaking-up-big-busing/">Carolyn Daly told The New York World</a> that the company had been “hard hit by the new bidding” process.
“Labor costs are so high we won’t get picked,” added Daly.
Michael Cordiello, president of Amalgamated Transit Workers Local 1181, lay responsible for the bankruptcy at the feet of the company, not the city.
“If Atlantic were truly concerned about avoiding Chapter 11 bankruptcy,” Cordiello said in a written statement. “They should look at the ludicrous amount of money they’ve spent on failed bargaining and litigation aimed at driving workers into poverty over the past year.”
Marge Feinberg of the New York Department of Education said that the department is not anticipating any immediate impact on school bus service.
The Department is owed $2.6 million by Atlantic Express. The city’s Law Department says it is currently unable to identify the nature of the claim.
“Atlantic just filed its paperwork,” said Elizabeth Thomas. “The documents are voluminous, and the City is assessing and reviewing the matter carefully.”
 
UPDATED Nov. 12, 2013:
<h3>City vows to continue cutting costs on bus contracts</h3>
On Monday, Mayor Michael Bloomberg and Schools Chancellor Dennis Walcott announced that the new school busing contracts that it had opened for bidding earlier this year had resulted in $210 million in savings over the coming five years — and that they expected to open up bids for another 4,100 bus routes whose contracts will soon expire.
“The bids we received surpassed our savings estimates and gives us more money to invest in ensuring New York City schoolchildren are receiving the best education possible,” said Bloomberg.
The union representing many of the bus drivers charged that such savings came directly out of workers’ pockets.
“Because of the new contracts imposed last spring, companies are taking new, less experienced workers at much lower rates,” said Cordiello, president of Amalgamated Transit Union Local 1181, in an email. “Any money the city may allegedly be saving due to these contracts is solely on the back of the city’s safest, most experienced workforce.”
Bidders on the new contracts were not required to retain drivers with seniority, whose jobs had previously been protected, or provide the levels of pay or benefits agreed on in bus companies’ contracts with the union.
Cordiello scoffed at the mayor’s claim the new contracts saved the city substantial sums. He said that the costs of a bitter strike last winter and lawsuits over pension funds could add tens of millions of dollars to the city’s school transportation costs.
“The Department of Education,” said Cordiello, “has never proven any of these alleged cost savings.”
The transition team for Mayor-Elect Bill de Blasio has said it is premature to comment on the expiring school bus contracts.

Increasing number of New York school children skipping vaccinations

More than 22,000 medical and religious exemptions were granted to students for the 2013-14 school year, up 27 percent from 2010-11, according to the state Health Department. Public and private enrollment over the same period remained largely flat.

New data provides first detailed look at military gear held by New York law enforcement agencies

Over the past several years, more than 120 law enforcement agencies across the state, from the NYPD to Tuckahoe, have obtained military-grade equipment through the Pentagon’s 1033 program, which transfers excess military equipment to state and local police across the country.