Bus companies sue schools for non-payment during pandemic
Long Island NY January 17 2021
A family of bus companies is suing 47 school districts across Long Island, including all four in Valley Stream, for contract fees that the companies allege went unpaid during, and in some cases before, the coronavirus pandemic.
Baumann & Sons Buses, which includes the Baumann Bus Company and Acme Bus Corporation, is seeking a total of $1.6 million from Valley Stream’s high school and three elementary school districts in Chapter 11 bankruptcy proceedings. Baumann went out of business in April after a number of the school districts that it contracted with stopped paying for services when the initial wave of the pandemic closed schools across Long Island.
Melville-based attorney Richard Hamburger filed the suit on Baumann’s behalf on Dec. 4. The suit alleges that the districts had both the means and an obligation to continue paying their contractors during the pandemic, despite the lack of need for busing while schools were closed.
“Every employee of school districts in the state of New York got paid; only private contractors didn’t get paid,” Hamburger said, adding, “The school districts had budgeted to pay for transportation, and had raised the funds to pay for it. This is money that they either didn’t spend by the end of the year or was reallocated for something else.”
Additionally, the suit alleges that stimulus funds given to the district as part of the $2 trillion federal CARES Act passed in April should have been used “to the greatest extent practicable” to help pay for both district employees and contractors.
Toni Pomerantz and Kimberly Wheeler, the respective school board presidents for the Central High School District and District 24, declined to comment on the suit, citing district policy regarding ongoing litigation. School board representatives from Valley Stream’s other two districts could not be reached for comment.
It’s uncertain whether state school closure orders ended the districts’ contractual obligations to their bus companies. Hamburger said state officials left directives on the issue vague.
“There was no executive order or directives by the State Education Department or governor that said you can’t pay,” he said. “To the contrary, the state stayed out of the issue.”
According to a memorandum sent on Nov. 10 by NYSED Chief Financial Officer Phyllis Morris to school superintendents and business officials across the state, education law currently only allows districts to be reimbursed through state aid for transportation costs if students are being physically bused to and from school. The Board of Regents, however, is seeking to push legislation that would allow districts to be reimbursed for costs associated with keeping transportation contractors on standby between last March 18 and May 1, also according to the memo.
In Districts 30 and 24, Baumann transported students attending private schools who live within their respective district boundaries, while District 13 used Baumann for in-district busing. In the Central High School District, Baumann was among eight bus companies used for a variety of services.
The suit alleges that Baumann was caught in a financial bind when, during the initial weeks of pandemic, it was required to remain at the ready to resume busing services amid uncertainty about when it would be safe for schools to reopen.
“It wasn’t as if in the middle of March the schools were closed for the balance of the year and the bus company could say to its employees, ‘Go home, we don’t have work, come back in August, and we’ll see where we are,’” Hamburger said, noting that the companies continued to incur costs while state stay-at-home orders were extended.
“It would have been a breach of contract if they wound down their operations,” he said.
Roger Tilles, who represents schools on Long Island on the state Board of Regents, said districts spent millions to put in place pandemic-related protocols and precautions, some of which used savings from not paying contractors last year.
“Given strict audits, I’m sure no one put any money into pockets that otherwise wouldn’t be eligible,” he said. “I would have liked to see the contracts honored, but I was not privy to the legal arguments.”
Attorneys for Districts 13 and 30 as well as the high school district requested the deadline for their response to the suit be extended to Feb. 26, while District 24 asked to be given until Feb. 5 to issue a response, according to court filings.
