The privatization survey was conducted largely by telephone between May 20 and Aug. 13, 2008. The vast majority of respondents were either district superintendents or school business officers. Some respondents preferred to answer Mackinac Center questions in writing only. Indeed, many asked that the Center submit its questionnaire in a formal Freedom of Information Act request. The Center was happy to comply with their request.
Privatization of support services includes contracting with a private entity for any part of the "normal" operation of a service function. This is a necessary distinction as some districts have joint provision of services between private and in-house service providers. For instance, at least 16 percent of all school districts and 55 percent of districts contracting for food service contract out for food service management while keeping employees on the district payroll.
This form of privatization also includes districts that contract for only a few routes of transportation services or for cleaning select district buildings. Big Bay de Noc School District, for example, contracts for just one custodian at a reported savings of $20,000. Partial contracting for the provision of transportation can be seen at Norway-Vulcan Area Schools where district employees and private contractors are used. These districts are counted as contracting for support services.
Districts also contract out for special education busing. Special education is considered outside the normal scope of standard transportation services and thus is excluded from our survey. Also excluded are districts that contract out transportation for student athletic or other events.
Districts that contract with employee management groups are included in support service privatization.
Some districts contract with other governmental units to provide services. One example of this can be found at Baldwin Community Schools, where transportation is contracted with the local Yates Township Dial-a-Ride.[*] Consolidation with other government entities in the provision of support services is not counted as privatization for the purposes of this study. One exception to this guideline is in cases where a school district contracts for the provision of a support service with another unit of government, but that unit in turn contracts with a private firm for the provision of that service. A case similar to this can be found in the Port Hope Community School District. Port Hope contracts for transportation services with the Thumb Area Transit, a nonprofit entity that receives some government funding in addition to a contract for student transportation with Port Hope Community Schools. Because Thumb Area Transit is a nonprofit, this contract is counted as privatization for Port Hope Community Schools.
Some districts share services. Summerfield Schools and Whiteford Agricultural Schools share a Sodexho School Services food service manager. Sharing services with other districts or units of government is commonly known as consolidation and can be a highly effective means of reducing costs.
Another means of reducing costs in districts is employee contracting. In some districts key employees have officially retired only to be hired back through a private company. This strategy allows districts to avoid paying non-salary benefits and making contributions to the Michigan Public School Employees
Retirement System, and it also results in other benefits from allowing private-sector companies to provide staffing services, such as freeing up administrative time from payroll processing.
Districts are also privatizing through attrition. Districts employing this strategy decide to privatize a given service but they do not simply let go of all district employees working in that service area. Instead, as employees retire, leave the district or lose employment for any other reason, they are replaced with contractors. For instance, Baldwin Community Schools has an attrition arrangement for its food service workers. Many consider this form of privatization a less drastic means of creating a smooth transition to private provision of a support service.
To ensure the accuracy of the survey's data, the authors verified all responses using a variety of methods. The most important is the follow-up survey. After every one of the districts is surveyed, Center staff telephone each district that reported contracting for one of the big three services. At that time the district is asked to confirm information provided to the Mackinac Center during the first interview. The Center then cross-references responses with information found in the public domain, such as information provided by the Michigan Department of Agriculture, Michigan Department of Education, and contractor and media accounts. Any discrepancies in the data are clarified with district officials.
[*] Several of these districts contract with a private, for-profit firm for either food or custodial services. Baldwin for example contracts for food service and is currently studying the feasibility of contracting for provision of custodial services next year.