What Happened?
The Volusia County School District in Florida is considering a plan to privatize its custodial services which could result in an estimated $30.3 million in savings over the next five years.
So What?
The outsourcing strategy would change the management of more than 450 custodial professionals throughout the district who stand to earn the same salary and benefits after the transition while the district cuts costs by millions. So far, the school district has received bids from five outsourcing firms:
- Aramark Education for $11.5 million
- DTZ Inc. for $11.1 million
- GCA Educational Services Inc. for $11.4 million
- ISS Facility Services for $10.9 million
- Owen, Renz & Lee Inc. for $13.4 million
Each bid offers considerable savings for the school district, which currently spends $17.6 million a year on custodial contracts. An evaluation committee was established to determine which bid is both the most affordable for the district while still able to meet the needs of each school. Once the custodial staff negotiations are completed, the school district will start reviewing outsourcing options for its groundskeeping services as well.
Franklin Outsourcing Aides
The Franklin Township school board in New Jersey recently overturned a decision to keep school aides and child study team members in-house, opting to outsource the employees to reduce overall costs. The school board agreed after careful consideration that it would be best to contract with the county’s Educational Services Commission to implement a child study team to evaluate special needs children and ensure adequate education plans are in place for them.
In the 2013-2014 school year, the district is projected to spend $503,000 on 17 aides. If the ESC were to provide the expert team, the costs would total $323,000 for $179,000 in savings. When contracting with the ESC, the school district shares the child study team with other neighboring districts, allowing for the expenses to be lower. The money saved through the outsourcing strategy could be put toward programs to support multiply-disabled students or pay for new teaching roles when state aid drops in the future.
Lancaster Privatizing To Avoid Penalties
While some school districts are outsourcing jobs to cut back on annual expenses, others are doing so to avoid federal penalties. Under the Patient Protection and Affordable Care Act, large employers must provide comprehensive health coverage to all employees who work more than 30 hours a week. As many school districts do not offer benefits to part-time employees or substitute teachers, the additional costs to provide health coverage can be significant.
Lancaster County School District in Pennsylvania, for example, is planning to outsource 100 workers to a private company. Employees such as student aides and substitute teachers that reach 30 hours of work in a week will no longer be employed by the district so as to avoid annual fines up to $600,000 for lack of healthcare options.
Strategies In Education
Gov1 has also reported on consolidation efforts to reduce school district costs and merging of services with other public agencies to increase efficiency.