WPCNR SCHOOL DAYS. By John F. Bailey. July 1, 2008:  John Silvanie, President of White Plains Bus Company told WPCNR today he saw no relief in sight for the 50% increase in diesel fuel prices his company is facing due to the runup in diesel fuel.  He told WPCNR his company is locked in to a transit contract with the White Plains  City School District that entitles his company to fee increases tied strictly to the state Consumer Price Index, which he said this year is 4%. 

 The district is presently protected against school bus transportation increases, however they face possible monthly increases in their cost of electricity from the New York Power Authority. (The authority has the right to increase the cost of electricity they sell the district, at one third less than consumers pay, a spokesperson told WPCNR last week.)

Silvanie said that the State School Bus Contractors Association and other school districts across the state are mobilizing an effort to get the state legislature to provide more school aid to offset the doubling of transportation fuel costs.  A bill has been introduced in the Assembly by Assemblyman Peter Rivera to roll back fuel taxes for school bus operations (the state gets 70 cents a gallon for every gallon of diesel fuel), and also force school districts into a 4-day school week to conserve fuel costs. Presently the legislature is on vacation, and expects to be on vacation the rest of the year, pending the governor’s calling them back into session.

WPCNR asked if he was planning to consolidate bus routes in White Plains. “We really can’t. We’re not the ones to decide what the bus routes are the school district  does. We commingle the routes as much as we can so we use as little equipment as we possibly can. The district does not pay me to run one bus and run another an hour later on an elementary school trip or something like that. There’s no place we can go, in terms of our municipal customers, not that I haven’t thought about it. The same is true of our contracts with Westchester County.”

How does your company survive,WPCNR asked:  “Not easily, we’re tightening our belt as much as we can. We’re trying to get the best deals we can out of our fuel suppliers. But the reality is the cost of fuel is up almost $2 a gallon.”

We asked, how long do you feel you can hold on at this level? “We just did a multi-year extension (contract)with White Plains. We’re contracted to do that. We have a moral and legal obligation to do it, so we’re going to do it.”

What do you anticipate the cost of living increase the state will give you? “The CPI this year (2008) is 4%. So the state has approved CPI increases of 4%. And our guess is, going forward  it’s going to be more than 4% (next year). When the cost per fuel goes up $2 a gallon,  2,3 or 4% isn’t going to take a big dent out there.”

State could change law on CPI relief.

The state cannot, Silvanie said increase the CPI allowance more than once a year according to the Municipal Bid Law, Silvanie said unless they changed the law.  “If they change the law, we certainly would try and get our school districts to help out.”

I asked what the other transportation companies are doing about this problem. “I know they have been talking in Albany about the potential of passing a bill that would allow contractors to get reimbursed from the school districts for the additional cost of fuel, and I think part of that was to also provide additional state aid for it because the school districts clearly don’t have the money to do that. Tax money doesn’t come from nowhere.”

Fuel Efficient Vehicles.

WPCNR asked if he  anticipated adding to his fleet with more fuel-efficient vehicles:

 “School buses migrated in the 50s and 60s when they were gas-powered to where they were diesel-powered. There were two reasons for that, diesel was much less expensive at the time than gasoline and diesel engines are more efficient so they burned less fuel. A gasoline powered school bus in the 70s and early 80s got 5 miles a gallon, where diesel vehicles got 7 miles a gallon. Everybody in the industry migrated to diesel powered equipment.

"With the most recent 2007 and 2010 emission requirements on diesel engines, they are starting to be less efficient. People who are running 15-20 passenger school vans that are gasoline powered, they are finding there isn’t a big difference in consumption between diesel and gasoline-powered equipment and so the mpg are much closer. And the cost of diesel is significantly more than gasoline now.

So the reality is, as we buy new equipment we may migrate the smaller vans back from diesel to gasoline. It would take some time.”

How long can he sustain? Non-Contract Customers Raised 5 to 15%

WPCNR explored long he could operate under these fuel conditions.

"We don’t envision going out of business as a result of this. We’re raising rates for our non-contracted customers and so we’re doing what we need to do to stay in business. In the 86 years we’ve been in business there have been upturns anddownturns in the business climate and we’ve managed to stay in business and it’s our intention to continue to be in business.  It depends on the customer, anywhere from 5 to 15%.

Sports Consolidations

As far as field trips for the schools, WPCNR asked, does he anticipate increasing costs for those. “The reality is, with respect to the school district they are under contracted numbers. We really can’t. We will probably ask the school district to limit the non-educational field trips. Athletic trips, if we can double teams we’re going to do that as well. Instead of two buses we send one bus.”

Albany Attitude

I asked about the enthusiasm in Albany for perhaps giving bus companies relief:

“You have to remember that the children in New York State get school buses. Half of the school buses in New York State are owned by private contractors like our company, the other half are owned by school districts, so the school district operations have the same fuel problem the private bus companies have.

There obviously has to be a great deal of pressure on the non-contracted districts,  because  their cost of fuel has gone up the same $2 a gallon my cost has gone up. So there has to be pressure on those school budgets,which means that they’re going to be putting pressure on the elected representatives in Albany to find some relief for.