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Competitive Contracting Continues

Thu., May 25, 2006

Every week brings new cost-saving developments from around Michigan as public schools try to direct more money to the classroom and protect teachers’ jobs by outsourcing non-instructional services.

Each dot on this map represents one of the nearly 180 school districts that have privatized at least one non-instructional service.

"I think you’re going to see this happen more and more," according to Lisa Brewer, a spokeswoman for the Michigan Association of School Business Officials, a professional association of school financial administrators. "It’s been going on for a while now, but it seems people are more aware of it."

A biennial study by Michigan Privatization Report, a publication of the Mackinac Center for Public Policy, shows more than one-third of public schools in Michigan now privatize at least one service. That figure has steadily risen, from 31 percent in 2001 to 34 percent in 2003 and 35.5 percent in 2005.

The most common services privatized by schools are janitorial, food service and busing. Some school districts, however, are starting to look at other operations in which costs can be cut. With large increases each year in the state-run pension system for school employees and high-cost health insurance plans, districts are becoming more creative.

Ithaca Public Schools, for example, privately contracts for psychological services, a move that has reduced costs by $32,000 a year, compared to what the school was paying the Gratiot County Intermediate School District. Lakeview Public Schools, in suburban Detroit, is spending $1 million less on operations and maintenance after privatizing its custodial work. The decrease takes into account money not spent on increased wages and benefits, inflationary costs and equipment and supplies.

"We are starting to see this approach in a number of different ways," Brewer said. "Administrators and school board members are focused on how to get the best value out of whatever service they’re looking for."

Among the most creative approaches to privatization is a plan to contract out for the jobs of three top administrators in the Ypsilanti Public Schools. The positions of chief financial officer, director of human resources and superintendent were being considered for just such a move, which the district said would reduce annual costs by about $130,000.

Over the past year, schools have reduced expenses by as much as $250,000, as was the case in Albion when that district privatized custodial services. In Grosse Pointe, a potential $50,000 loss was turned into $90,000 of revenue when food services were privatized.

Cooperative approaches also are being pursued. The Muskegon Area ISD is investigating privatized busing for six local districts that could reduce costs by up to $280,000. Ypsilanti and neighboring districts Willow Run and Lincoln have also joined in an effort to investigate cost reductions through privatized busing.

Lincoln Consolidated Schools Superintendent Fred Williams told The Ann Arbor News that his district spends $60,000 a year on each of its 65 buses, and that one private company said they could do it for $40,000 per bus each year.

As Ypsilanti, Lincoln and Willow Run discussed potential savings through privatized busing, the issue of job losses again came up. John Fulton, Ypsilanti’s director of human resources, told The News that such fears were unfounded.

"If they take over three districts, they need to hire drivers," Fulton said. "So they’re going to be looking at the three districts to hire the best drivers."

When considering such a decision, schools can look to the success of Pinckney for direction. Pinckney Community Schools privatized its busing operations in 1994 and, according to The Ann Arbor News, has renewed the contract four times. Linda Moskalik, assistant superintendent for finance, said the contract will be renewed again this year.

Union activists say privatization puts custodians and bus drivers out of work, although in Pinckney’s case, 90 percent of the drivers went to work for Laidlaw Transit, all at the same hourly pay rate the district was paying.

Aside from the revenue of selling its buses to Laidlaw, Pinckney no longer must deal with the expenses of union negotiations or grievances from transportation staff.

"We’re saving a lot of administrative work," Moskalik told The News.

Michigan Education Daily
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"A 10-year-old Windsor boy who completed part of his education in Michigan is being denied entry to public high school in Windsor even though he's completed the eighth-grade curriculum." >>
"Principal John Hoving is using Facebook as a way to promote Bay City All Saints Central School as well as to head off possible cyber bullying." >>
"Royal Oak Public Schools students will be featured in an Oct. 12 episode of MTV's "If You Really Knew Me," a cable television program that the producer describes as "students trying to be accepted for who they are."" >>
"Public schools in Michigan were offered an automatic "A" on part of their annual state report card this year, a one-time arrangement that may have spared some from being unaccredited." >>
"More than 1,000 teacher retirements will allow Detroit Public Schools to recall all teachers from layoff and hire up to 300 more to fill staffing gaps." >>
"Inland Lakes Schools is considering hiring a private firm to provide custodial services as a way to save money, but a union representative says that new federal funding makes such a move unnecessary." >>
User Comments
education is an all around development for a child
he should be mentally and physically strong


<a href="http://rescueyoursavings.com" rel="dofollow">Savings</a> >>
education is an all around development for a child
he should be mentally and physically strong >>
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Public servants like Presidents, Vice-Presidents, Senators, Congressmen, Judges, Secretaries of Various Departments and the like should be first to be compensated for performance.
The idea that the playing field for students is level everywhere is as Quixotic as thinking all politicians are honest and competent.
There are neighborhoods where only Portugese or gang sign language is spoken, where the parents both work two jobs to pay rent, where getting to school and back is more dangerous than Iraq and Afghanastan.
This Secretary of Education has to remove the silver spoon, roll up his sleeves and take his superior intellect attitude into the trenches and show the poor slobs that are taking their teachers jobs for granted how he would do it. Just because his mommy used to help out in Chicago doesn't give him the Congression Medal of Honor. Actually he's a stuffed shirt pretending to know it all.
How much do you want to bet that he wouldn't attempt entering these neighborhoods let alone these schools without security. >>
This article is tucked away yet is profoundly correct. Parents are pseudo parenting little objects of consumption. Teens, professionals, working moms like the "idea" of a child but are not in for the long haul and everyone loses.

Schools are enabling parents to do precious little. The time parents spend with their children is the only thing that matters. Bussing needs to be cut, school breakfast, lunch, and afterschool care needs to be stopped. Parents will grow that bond by sacrificing the nails, hair, parties, drugs, quads, vacations, etc. and making a lunch for their child and arrangements to be home when the child is out of school. No one is that poor that they can't provide a boloney sandwich, a baggie of pretzels, an apple, 50 cents for a milk, and two cookies each day.

Please respond!

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Is it true that young ones today are losing interest on these subjects? Obviously, the White House is promoting programs that will help students on coping up with math and science subjects. But, The federal government thinks that the quality of math and science education can repair credit with the scientific community and improve US education with a few <a rev="vote for" title="U.S. Government Spends $250 Million on Science and Math" href="http://personalmoneystore.com/Payday-Loans/ ">payday loans</a> of sorts. In reality, it will take far longer to accomplish than they might think – US educators can't even get students to accept that "irregardless" isn't a word, and the difference between their, they're, and there – our students can't even learn their own language! It's a noble aim, to be sure, but throwing money at it may not work in the long run. >>
I am a teacher in the same county who is presently trying to quit the union. Like Caldwell, I strongly disagree with the MEA.

This article was timely.

Rob Olson
Pittsford Area Schools

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I agree this is a change worth making. I describe some of the uneven effects of the idea on my blog at http://rickolson.blogspot.com/2009/08/statewide-health-insurance-plan-for.html which you may also wish to read.

The devil will be in the details, so this is one we will need to monitor closely.

Rick Olson from Saline, former school Business Manager >>

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I AGREE >>