January 18, 2012 - By Joe St. Henry
With millions of dollars in potential savings on the line, the Lake Orion Board of Education agreed on Jan. 11 to pursue bids from vendors that provide custodial services to schools.
John Fitzgerald, assistant superintendent of business and finance, presented highlights from a consultant's report that indicated the district could save between $1.1 and $1.69 million annually by privatizing the custodial work.
The projections were based on the latest AFSCME contract, which includes $3.38 million in employee wages and fringe benefits. The consultant also considered other comparable Oakland County school districts that have used to this approach and realized 30-50 percent cost savings.
According to the consultant's report, the number of custodial employees in Lake Orion schools is comparable to that of other districts of the same size, but they earn more than those in most other districts.
Fitzgerald and Trustee Steven Drakos both remarked during the school board meeting that they are skeptical of the consultant's claims of 50 percent savings. More realistic savings would be around 30 percent, they agreed.
Trustee Melissa Miller appeared even more skeptical, but recognized the need to proceed with the process of securing bids.
"I'm concerned the scope of the Request for Proposal (RFP) document be as specific as possible, so there are no surprises down the road if we decide to pursue this," she said. "I'm worried about being mislead by consultants who say we're going to save this amount when, in reality, we may not."
Treasurer Jim Weidman said he wants to hear the vendors' ideas for providing custodial services more cost effectively.
"We must be clear about our expected outcomes, but we don't want to be prescriptive," he explained. "By that I mean we must give vendors some latitude in the proposals in how they think they can get the job done."
Weidman also stressed that, given how much the district can possibly save by privatizing custodial services, the board really has no choice but to at least consider such a move.
"The worse case scenario shows we will save about $1 million per year," he said. "Our job is to educate children and if we can accomplish this and save this kind of money, we have a fiduciary responsibility to do so."
Trustee Connie Meech said the board also has a responsibility to honor the current AFSCME contract, which runs through June 30, 2013.
"I feel obligated to honor the current contract, especially considering the latest concessions were substantial," she said.
During the public comment segment of the meeting, AFSCME Local 1472 member Kathy Sandstrom said in the last two contracts, members actually gave up $2.5 million in concessions.
"I keep thinking of what harm will be done if we move forward with the RFP," she said. "Our kids will not be as safe or recognize the people in their schools. Our community will lose good-paying jobs and the spending that comes with them, plus there will be a smaller tax base."
Multiple board members said that they need to see some "hard numbers" from vendors before making a final decision on privatizing custodial services.
"We really need to see the numbers in real time," said President Mary Jo Burchart. "I don't like this – these decisions are always difficult to make."
Board Vice President Birgit McQuiston and Miller agreed, noting that the district's $4.4 million budget deficit for the 2011-12 school year cannot be ignored.
"I hope we don't go through with the move, but the deficit is huge," Miller said.
Fitzgerald said there are 3-4 national firms that provide custodial services, plus a number of regional outfits and smaller local vendors. He told the board the RFP could be ready for distribution as early as the end of this week.
Burchart said if the school decides to privatize custodial services, it is targeting to launch them this fall at the start of the 2012-13 school year. She admitted, however, the process may take longer.