Report: Outsourcing could save $12 million in 3 years
The Westerville City School District could save upward of $12 million by outsourcing its custodial, maintenance and grounds services, according to a district committee.
The Request for Proposals Committee has met since December, after the district failed to pass a 4.06-mill property tax and 0.5-percent income tax in November 2011. Its task has been to explore whether the district could save money by outsourcing services to private companies.
The community committee, which started out with 75 members then was whittled down to 10 who drafted final recommendations to the Board of Education, looked at outsourcing human resources and payroll, custodial services, food services, transportation and grounds and maintenance work.
In a presentation to the board Sept. 24, the committee recommended outsourcing a combined contract to Marsden Services, if the opportunity exists.
Marsden, which provides custodial, maintenance and grounds work for Columbus Academy, St. Charles Prep and Columbus State Community College, offered the district a proposal that would cost $12.1 million over three years.
That compares with $23.2 million the district spent on those services in 2011.
However, the district could not outsource custodial, maintenance and grounds services at this time because it currently has a two-year contract with the employees who provide those services.
Representatives from the union did sit on the committee and said they want to work to make sure the district does not have to outsource services, district Business Operations Services Executive Director Jeff LeRose said. He represented the district's administration on the committee.
"It is the union's goal for the opportunity not to exist," LeRose told the school board. "For the opportunity to exist, the board and the union would have to reach an impasse (in negotiations)."
The district could lower the cost of its operations if it focused on reducing overtime, workers' compensation claims and absenteeism, LeRose said.
The cost already is lower than the $23.2 million the committee looked at. That cost represented what was spent in the fiscal year ending in June 2011 because those were the numbers the district had available, LeRose said.
Since then, the maintenance, custodial and grounds staff has been reduced from 111 employees to 93 as budget cuts were made, LeRose said.
For the other areas the Request for Proposals Committee examined, the decision was made to put off looking at contracting payroll and human resource services and food services, committee member Peg Duffy said.
The committee recommended that the board not outsource transportation but look at saving money by examining ways to cut costs for transporting special-needs students.
The one valid proposal the district received from an outside company to provide transportation for Westerville City Schools would cost more than $1 million more over three years than the district spent in 2011, LeRose said.
While the district can't look at outsourcing services now, LeRose said it should be taking steps to reduce its in-house service costs over the next two years of the union contract.
To do that that, he said, the district should base future negotiations on performance rather than tenure, taking into account measures such as overtime, workers' compensation claims, absenteeism, customer service, energy conservation, property damage and instructional downtime.
"To be competitive with contract services provided, we will need to improve our services," LeRose said.
If the district does look to outsource services in the future, it must be very careful to craft agreements that carefully outline what services will be provided because companies will charge extra for any service that lies outside of the agreement, Superintendent Dan Good said.
The district's decisionmakers must be aware of the fact that in-house employees often are willing to pick up work that falls outside their regular duties, such as fixing things they notice are malfunctioning without being asked to or helping students with projects, Good said.
Those types of things would come at extra costs that add up quickly if the district isn't specific in its contract language with an outside company, he said.
"If you have the opportunity to outsource work, the devil's in the details," Good said.