District Administration - August 2007 - (Page 52)

OUTSOURCING economies of scale and in part to technical knowledge and improved eﬃciencies. For instance, instead of purchasing new windshields and tires for one bus at a time, STA leverages its multidistrict purchasing power to buy in bulk at discounted rates. “We have eﬃciencies in the way we do business every day,” Engelbert says. “We have ﬂeet programs, maintenance programs, routing programs—things that the school district doesn’t have and has to go spend more money to get. We have historical data, and we’re very good at forecasting. School districts are not. Our bid team factors that in, and generally, we have no surprises when we’re halfway through a contract.” Roland Zullo, research scientist for the University of Michigan Institute for Labor and Industrial Relations, discovered that some private transportation vendors will negotiate a discounted rate to buy a district’s ﬂeet and manipulate the data to falsely show savings over the ﬁrst few years of the contract or will show savings by subtly eliminating services, such with lower labor costs since they do not oﬀer the same caliber of beneﬁts and wages, and they do not have to use the same formulas to calculate their manpower requirements as their governmentrun counterparts. Planning for Contingencies But before making a decision about outsourcing, you need to account for the cost of all of the contingencies. These include transporting the students to and from sporting events and ﬁeld trips and dispatching a bus to pick up or drop oﬀ students who missed the bus, as well as the cost of hiring a full-time in-house contract manager to assess the true cost of their outsourcing decision. “It’s almost like when you buy a car. The base price is probably pretty reasonable, but then if you add in all the features, it tends to “We received a lot of complaints from the teachers’ union because when we couldn’t ﬁll a position the other teachers would end up dividing the class and taking the kids, which they were never happy about.” —Vicky Reynolds, chief human resource ofﬁcer, Duval County Public Schools, Jacksonville, Fla. as by cutting out routes close to the school and requiring more students to walk. And once a cash-strapped district sells its ﬂeet of buses, it will typically be too cost-prohibitive to in-source that service in the future, since the district won’t have the necessary capital anymore to purchase new buses again. To further cut costs, vendors will ask districts that receive a fuel tax break, like Santa Rosa County School District in Milton, Fla., to retain responsibility for purchasing fuel, since they can buy it at a lower price. Plus, private companies do save money 52 August 2007 be really expensive,” says Mark Cassell, associate professor of political science at Kent State University and author of Taking Them for a Ride: An Assessment of the Privatization of School Transportation in Ohio’s Public School Districts. But even with factoring in Illinois Community Unit School District 300’s contingencies, including adding new routes to accommodate the area’s rapid growth and meeting the transportation needs of private school students, which the district is required to provide, Arndt believes outsourcing will eliminate the district’s annual $2 million transporta- tion deﬁcit in the coming school year. “Our budget was completely shot based upon some contract language that, regrettably, the administration had bargained away years prior,” Arndt says, “and as any superintendent knows, if you’ve bargained away a right and it’s costing you considerable dollars, good luck trying to get it back. We truly feel that we’re going to be able to make our budget this time by outsourcing.” Although private companies must often allow district employees the option of staying on the district’s payroll, they can cut their overhead by paying new hires according to the often cheaper pay and beneﬁts scale provided by private companies. County or other government employees are generally eligible for added perks, such as retirement beneﬁts, which are rarely, if at all, oﬀered at private companies. Even health coverage at private companies often oﬀers fewer beneﬁts than in a county-bought plan. And instead of downsizing, vendors often reduce their workforce by not replacing district employees lost through such avenues as attrition. While the generally less desirable beneﬁts package of private companies may discourage company employees from staying long-term, turnover can be a good thing in some cases, asserts Judson C. Crane, director of purchasing and contract administration for Santa Rosa County schools. For instance, a custodian should be an entry-level position, he says. “You want turnover,” Crane says. “What was happening on our side is we had career custodians. We would hire someone that was a young person, and we would get a lot of productivity out of them. However, at the end of 30 years, we would have an employee that had earned all the step and cost-of-living raises that everybody gets, yet their productivity would be way down because they were District Administration

Table of Contents for the Digital Edition of District Administration - August 2007

Contents
Editor’s Letter
Letters
News Update
Technology Update
Curriculum Update
Inside the Law
Research Corner
Computer Literature
District Profile
Administrator Profile
Bus Money
DIBELS Draws Doers & Doubters
Report from EduComm 2007
Ins and Outs of Outsourcing
Curriculum Clearance
How Well Does This Web Site Work?
New Products
Problem Solution
Online Edge
Speaking Out
Professional Opinion
Calendar of Events
Understanding the Times

District Administration - August 2007