Friday, March 7, 2014

Michigan public schools increasingly outsourcing services

Privatizing noninstructional services continues to grow in popularity among Michigan’s public school districts.

Wyandotte and Riverview were among districts that privatized additional services in 2013, according to an annual survey on the subject carried out by the Mackinac Center for Public Policy, a conservative think tank.

Wyandotte and Riverview privatized — or outsourced, depending on the terminology you prefer — their transportation while Riverview also contracted out for food service.

Public schools are under considerable financial pressure and one of the ways they can maximize their resources is through contracting out for support services.

Two-thirds of Michigan school districts now contract out to private companies at least one of the three noninstructional services that nearly all districts finance — food, custodial and transportation, the study said.

 In 2013, 65.5 percent of districts in Michigan contracted out at least one of these three support services. This is up from 60.7 percent in 2012, according to the Mackinac study.

Wyandotte’s decision to outsource transportation last June was carefully thought out.

The issue was settled upon in the collective bargaining agreement between the school district and American Federation of State, County and Municipal Employees Local 1055, according to a report in The News-Herald.

Trinity Transportation, the company awarded the contract, also purchased the district’s 11 school buses.

Total transportation costs to the district were about $800,000 annually before outsoursing. They are now fixed at between $275,000 to about $292,000 per year over the next three years. Obviously, the savings are substantial.
That is precisely why districts have gone to outsourcing, although it can obviously be painful for the employees that are involved.

In Wyandotte’s case, the district promised to retain all employees and has done so through attrition, and that has turned out to be the case, said Wyandotte Superintendent Carla Harting.

Downriver districts that contract for food services include Trenton, Ecorse, Flat Rock, Riverview and Woodhaven, according to the Mackinac Center.

Southgate and Flat Rock contract for custodial services.

Besides Wyandotte, Taylor, Ecorse, Trenton and Riverview outsource transportation.

“The trend keeps continuing,” said James Hohman, assistant director of fiscal policy for the Mackinac Center and one of the authors of the privatization study. He noted that only 31 percent of districts privatized any of their services in 2001, the first year the study was done.

“It won’t work for every district,” Hohman said, adding some districts team up with adjoining systems to pool their services and economize and some districts have tried outsourcing and abandoned it.

Transportation contracting, the least frequent of the services to be contracted out, is increasing rapidly, the study said.

“The proportion of districts using private companies to provide transportation services increased from 16.4 percent to 20.9 percent from 2012 to 2013,” the study said.

Thirty districts began new contracts for transportation services in 2013. In 2008, only 6 percent of districts contracted out the service.
Custodial services are the most frequently contracted service, with 45.5 percent of districts using private contractors in 2013. This is an increase from 39.2 percent in 2012. These figures have grown steadily since 2003 when just 6.6 percent of districts used private contractors to clean and maintain district buildings.

“Food service contracting is not growing as quickly as the other two services, but remains quite common,” the study said. “In 2013, 21 districts began new contracts for these services. The rates increased slightly, from 34.6 percent in 2012 to 36.5 percent in 2013.”

One thing is certain: Downriverites ought to be insisting that their school boards at least study the issue, if they haven’t already.

5 comments:

  1. This article of yours is definitely an eye opener. I'm quite familiar with the growing trend towards outsourcing in many different industries, but I didn't know that it is also occurring in the education sector, particularly here in MI. I agree with your recommendation in the end. Although there are a lot of benefits from this strategy, it still has some disadvantages, especially on the part of the employees affected. Further studies and discussions can definitely help minimize these disadvantages. Donna Roland @ EpiphanyStaffingGroup.com

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