School Board to Consider Outsourcing Support Services

Union representatives for teachers and support staff say (FPS) officials may be trying to gain a negotiating advantage with Monday's announcement that board members will look at outsourcing support services.

But school officials said they are disappointed that their hard look at privatizing transportation, custodial, maintenance/grounds and nutrition services is being characterized as a bargaining ploy.

In a Listserv e-mail issued Monday morning, Superintendent Susan Zurvalec announced that on Tuesday, the Board of Education will consider accepting requests for proposals that would provide private companies and the union the opportunity to bid on support services. Officials have moved the meeting to 's auditorium; it starts at 7:30 p.m.

Laurie Moore, who in a few weeks will make her first trip to the bargaining table on behalf of FPS support services staff, described the news as "shocking."

"I'm quite surprised, especially with the (general) fund balance they have in Farmington," said Moore, who is a Michigan Education Association staffer representing local employees.

FPS Assistant Superintendent David Ruhland said the fund balance, which is targeted at 11 percent of revenues, is "not cash sitting in the bank. That's a misnomer."

More accurately, he said, it's a savings account officials draw from to keep the district's budget from going into a true deficit.

Since he came to the district nine years ago, Ruhland said, officials have made $30 million in budget cuts.

"And that was before the $18 million in cuts we made for this year," he said. "That we have a fund balance at all is the result of those sacrifices."

If the district simply moved ahead to next year without taking any action, he said, the fund balance would be spent down by $5 million to $6 million in increased retirement and benefit costs alone. Even with the closure of four school buildings, officials this past year started making cuts to instructional services. 

"That means we are hitting the classroom," Ruhland said. "That's our core mission."

Moore said that in the past, the Michigan Education Association has provided the district with information about the negative aspects of outsourcing. She questioned the potential savings — as much as $4 million — that Zurvalec estimated in her e-mail. Moore said private companies may lowball their bids, then add costs after contracts are signed.

However, the biggest cost of privatization lies in its impact on the community, she said.

"When you privatize, you're causing people to lose their homes because they've lost their jobs," Moore said. "People may leave the community. You have strangers working in school buildings. ... Private companies don't have consistent staff."

On the other hand, in-house employees are often people who have, or have had, children who are students in the district, she added.

Moore said Monday's news will likely have a chilling effect on collective bargaining, which is expected to begin in a month or so.

"I don't think I can separate my feelings about this because clearly, this is a mean-spirited tactic on their part," Moore alleges, adding that she believes the district is simply trying to pull concessions from support staff. "They've already taken concessions on the last contract."

Ruhland said he's disappointed that the union is calling the proposal a bargaining ploy. "We don't operate that way," he said.

Tuesday night's board actions will not include approving outsourcing. "It is the board saying ... we need to at least arm ourselves with the facts," Ruhland said.

While other districts have reported millions in cost savings, he added, "Every district is different. You have to put your own RFP (request for proposal) out to find out what the savings will be for Farmington. Then as we go forward, we can make a decision."

Dave Workman, president of the Farmington Education Association (FEA), said that while this isn't a teacher issue yet, it likely will be.

"The timing is unique, to say the least," he said Monday, noting that Gov. Rick Snyder has not yet announced his budget recommendations. "It's unsettling ... that the district is willing to use this as a strategy when our economic future is still out there."

Ruhland said that while the governor's budget hasn't been released, more funding cuts are expected. And officials already know costs will continue to escalate.

The big savings in privatization comes with benefits, Ruhland said. Two years ago, the district paid 16 cents on the dollar for benefits and retirement; last year, it was 19 cents and this year, 22 cents. Next year, estimates are that it will be 27 cents, he said.

Ruhland knows that the idea of outsourcing doesn't feel good to FPS staff. "If push comes to shove, we have to be able to put money into the classroom," he said. "It is about the money, but we know it's still people we're talking about — and good people."

Correction: The district's fund balance is targeted at 11 percent of revenues.