NY training sites can expect their operating costs to go up

MSF’s press release after winning the bid stated, “In each state program it has managed, MSF has increased student-training numbers through more sites, more RiderCoaches, and improved operational efficiencies and quality control, while reducing operating costs and lowering costs to these rider-funded state programs,” said Robert Gladden, director of program administration for MSF.”

It’s true that training numbers went up in those states but they did in every state program during those years by the same or greater percentages without MSF being involved. Nor are the means stated necessarily related to increasing students trained.

But it is true that MSF reduced its operating costs and (at first) charged the state less for the services than the proceeding administrator. MSF accomplished this by passing costs on to the independent site operator lowering his or her profit margin.

In New York as in California, small businesses sub-contract with the company hired to administer the state motorcycle safety program. MSF has administered the California program since 2004 under the supervision of the California Highway Patrol (CHP). California, rather than the other three states is the model for how MSF can be expected to administrate the state.

So what can New York independent training providers expect when the Motorcycle Safety Foundation takes over running the state program? This is the experience of many small businesspeople in the California program:

Bare nekkid: exposing sensitive financial data

To get a contract with MSF, California providers who had been in business for multiple contracts with Crayne and Associates and then MSF still had to reveal every scrap of financial information about their businesses, contracts, employees and so forth completely exposing sensitive data to MSF.

According to Joe Aiello, MANYS “didn’t always request financials and [instead] looked to see that they were currently viable from past performance and that they were in good standing with their creditors/landlords/etc. Of course, we had the authority to request their financials at any time during the training period if necessary.”

If MSF treats New York owners like it did Californian ones, they can expect the same kind of strip search of every aspect of their business and personal finances.

What MSF required in California went far beyond any requirement of the California Highway Patrol but the liaison at the time said that there was no law against it and since MSF wasn’t in competition for business it wasn’t an issue.

However, MSF did begin running its own for-profit training sites—going into competition with its subcontractors.

The process of applying for subcontractor status became exceedingly time-consuming and complicated for business owners. Excessive delays in approving contracts and renewing the site RERP was par for the course causing great anxiety among site owners.

Steering students to favored providers—and favoring itself most

MSF, like Crayne and Associates before them, had an 800 number to find a training site—and MSF has an online inquiry and registration presence. Inquiries prior to MSF opening it’s own sites, found that call in and online prospective students were steered to “friends of MSF” sites even though those sites were farther than others who were owned by those who had criticized MSF’s BRC curriculum or administration.

Once MSF’s for-profit sites began operating, the 800 line and online site presented its own for-profit sites as viable options for students seeking a course—even if MSF-operated sites were farther away— being a “Friend of MSF” no longer helped to get business. When training numbers drop—even briefly—the small businesses became very vulnerable or went out-of-business leaving RiderCoaches and office staff without jobs, causing businesses to default on range contracts and motorcycle loans.

MSF for-profit sites, however, were still chock full even during the drop in training numbers.

In other cases MSF used the information it collected to approach colleges that rented range space to try to dissuade them from doing business with the small business and instead work with one of MSF’s favored providers—or MSF itself.

MSF also granted new sites within the territories of existing training providers even though wait times were well within the guidelines of the CHP contract. And they did so without informing the site owners that new sites—and therefore competition for business—were being established.

If MSF demands the same depth of information of New York small training businesses, they may find the same difficulties following.

A rough beginning As mentioned in an earlier entry, MSF wasn’t prepared to take over that program either—even though they had a similar lead time to do so. Contracts weren’t ready, Policies & Procedures, forms, etc. etc. weren’t available.

Communication problems were rampant—people couldn’t get through voice mail jail, didn’t get responses and, if they did, didn’t get the information they needed.

Other communication problems included MSF not informing site owners that certain forms that had been provided by Crayne and Associates had to be printed out by them now. Because of that failure, forms—and some new forms that MSF demanded—weren’t filled in and sent in. Then many site owners were upbraided by MSF employees and threatened that their contracts would be cancelled because of that. Such problems didn’t endear MSF to the site owners.

MSF sent out people to paint ranges to the BRC standards and many of them had never painted a range again. The ranges were painted wrong in many cases or so badly that they had to be painted again.

Given that MSF has begun in NY as they began in CA—other than the painting ranges problem, the other difficulties are to be expected.

Motorcycles

We’ve already been told that MSF will not provide motorcycles as MANYS did—it’s unclear, since Paulter won’t return my calls—if the NYDMV was aware of that when the bid was accepted. This means site owners have to buy their own—a huge expense that had not been anticipated in budgets.

But, with MSF keeping the prices the same for the next two years, site owners will have to absorb the cost into the current price structure—meaning they will be making less profit. Only by increasing training—if there’s demand during a recession where gas prices are lower and they have range and instructor availability—would they be able to make up the difference.

In California, even though MSF’s members are the manufacturers themselves, MSF did not help site owners find small motorcycles or get them a better deal on them. MSF wasn’t referring to availability and accessibility of motorcycles, then.

Paper money

MSF’s press release on its victorious takeover of NY state also bragged that “MSF RiderCourse Enrollment System, an online enrollment program for riders, will be made available at no charge to all New York State Motorcycle Safety Program subcontracted training sites to permit students to enroll in courses via the internet. This will enable MSF to transmit pertinent course completion information to the New York Department of Motor Vehicles within one business day of course completion.”

The question is whether “made available” means site owners can choose to participate or not? It’s not optional in other MSF states. In New Mexico, according to the report by Alavar to the Confederation of Clubs, only online registration was possible for students—as is the case in Pennsylvania.

New Yorkers can expect the same, iow.

How this effects small business owners: In California, Crayne and Associates supplied all the forms and so forth needed. This is the same case in New York under MANYS, according to Joe Aiello. “MANYS supplied all forms and materials to the site. Sign in/Sign out, accident reporting, Admin guides, student registration…everything. We had them printed and we even paid for the postage to have them delivered. This was the case for the RCP as well as the regular courses.”

As noted above, MSF does not supply those forms as printed materials. Instead documents are sent as .pdf files which the rider educator or owner has to print out for themselves.

In California under Crayne and Associates and under the first few years of MSF’s administration, site owners submitted all course paperwork to MSF who then put it into databases and the required reports were then sent to DMV. Data collection and entry was one of the major duties of the Primary Contractor, MSF.

MANYS operated the same way Crayne and Associates did, Aiello says, “MANYS did ALL processing for student data. Again, the sites were not charged. We also paid for all printing of completion cards, PIRP cards and even the mailing to the student. We also covered any costs for a reprint of these materials. The only thing the sites had to pay for was the $2 PIRP fee that DMV charged us per student (if the student requested PIRP) and the overnight mail cost to send the course records to MANYS.” That overnight fee was $10, he said.

In California, MSF changed all that and now site owners have to do all the data entry and print many of the forms required. According to site owners, it meant an additional 50 hours a month—especially during the busiest training system. Site owners had the choice of hiring a data entry clerk at minimum wage and then checking their work or putting in the extra hours themselves with the staff they had.

Printing out forms that used to be provided by Crayne and Associates added hundreds to the budget, according to site owners, over a year—but that was a small cost compared to the data entry work which resulted in driving up costs thousands of dollars.

More costs less profit

If MSF is to be believed, while it wasn’t paying those costs (and theoretically the state) the costs were just shoved onto the independent site owners.

While the course cost seem high to those in other parts of the country, the small businessmen who own these schools have small profit margins. Motorcycles and data entry could be enough to make those profits razor-thin—and that’s if gas prices remain low.

Readers should also remember that the price cap will remain for two more years. That price cap was set assuming those costs–motorcycles, data input, etc. would be borne by the adminstrator and not by the subcontractors. These additional costs to the site owner then will have to be absorbed within that price structure. As a result, the independent site owner’s situation may become more precarious.

MSF’s claim that it saved the state money is indeed true–but at the expense of the small businessperson. Big business, then, makes money on the backs of the little guy who’s just trying to make a living.

And I hate to mention the obvious–neither California or New York was spending all the money under the old administrators that they collected from special fees on motorcyclists. Not that this excuses wasteful spending–but it’s not as if less training happened because there wasn’t enough money for more. Money wasn’t the issue–and where are those states going to spend Two State Joes money if not on the motorcycle program? I’m just saying the ABATE folks were snookered by a false argument…and so is anyone else who thinks that MSF is going to “save” the state any money.

But MSF will certainly be able to replace any site owners that go down—stay tuned for the next entry.

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Explore posts in the same categories: Motorcycle Safety Foundation, Motorcycle Training, State Motorcycle Safety Programs

2 Comments on “NY training sites can expect their operating costs to go up”

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