• 31.5 percent of districts (173 out of 550) contract out for custodial services.
  • 29 districts began contracting the service this year.
  • 16 of these districts provided dollar-figure savings estimates; these contracts are estimated to save Michigan taxpayers $3,454,200 per year.

Graphic 4: Districts Contracting Custodial Service

Graphic 4: Districts Contracting Custodial Service  - click to enlarge

Graphic 5

Districts new to custodial contracting

Savings

Woodhaven-Brownstown School District     

$1,358,700

Oakridge Public Schools

$520,000

Livonia-Clarenceville School District

$320,000

St. Clair Shores  South Lake

$300,000

Gull Lake Community Schools

$170,000

Harper Creek Schools

$167,000

Beaverton Rural Schools

$157,000

Athens Area Schools

$112,000

Okemos Public Schools

$100,000

Armada Area Schools

$60,000

Plainwell Community Schools

$50,000

Fairgrove-Akron-Fairgrove Schools

$30,000

Alma Public Schools

$23,000

Blissfield Community Schools

17%

Fulton Schools

10%

Ubly Community Schools

9.25%

Croswell-Lexington School District

*

Crawford AuSable Schools

*

Highland Park Schools

*

Lake Linden-Hubbell Schools

*

Lapeer Community Schools

*

Mendon Community Schools

*

Negaunee Public Schools

*

Newaygo Public Schools

*

Onekama Consolidated Schools

*

Sodus Township School District 5

*

Waldron Area Schools

*

*Denotes insufficient documentation

Woodhaven-Brownstown Area Schools recently won a major court victory over AFSCME and the American Federation of Labor about public-sector labor law and is expected to reap significant financial rewards from the battle.

As part of legislation passed in Michigan’s application for extra federal money under the “Race to the Top” program, the state changed its law on prohibited subjects of bargaining. The law had stated that whether a district contracts out cannot be negotiated in union collective bargaining agreements. The change attempted to ensure that public-sector unions would stand on equal footing with private-sector companies if the district decided to seek bids. However, government unions argued that in order to do that they would need to set some of the terms for bidding. Eventually, an appellate court decided in an unpublished opinion that the law did not entitle unions to request bidding terms prior to the district seeking bids.

A new contract between GCA and the Woodhaven-Brownstown Area Schools is projected to save the district more than $1.36 million per year on custodial services. With 5,093 students in the district, this translates into an effective
$267 per-pupil funding increase. District officials also remarked that this estimate does not include likely savings on “soft” costs, such as reduced time processing payroll. The district expects even more savings for the second and third years of this contract, up to $1.5 million in the third year.

Oakridge Public Schools in Muskegon recently approved a new custodial contract with Enviro-Clean, service to begin in the 2011-12 school year. Savings for the first year are projected to reach $520,000, well over half of the district’s previous in-house costs. Without these savings, the school district fund balance would have plunged to only $21,000.

South Lake Schools in St. Clair Shores is also ready to begin the 2011-12 year with a new custodial provider, Commercial Sanitation Management Services. The board expects savings between $300,000 and $340,000 in the first year. These savings are key to helping the district’s fund balance: In January, the school board foresaw a roughly $1.16 million fund deficit by the end of the fiscal year in June.

Athens Area Schools privatized the majority of its custodians with Hi-Tec over the summer. The district says a number of its employees utilized the state’s early retirement incentive and the district turned to privatization to fill spots and employ its remaining employees. The district expects savings of $112,000 per year throughout the three-year contract, with the savings primarily coming from retirement and insurance.

Okemos Public Schools needed to trim its custodial budget, and the board thoroughly investigated privatization. Although they did not decide to fully privatize custodial services, five retiring custodians were replaced by workers contracted through Hi-Tec. The district expects savings of roughly $100,000 from these five positions, and will consider replacing future retirees with Hi-Tec workers as well.

Alma Public Schools needed to hire new custodians for only one of its elementary schools. The district chose to contract through Grand Rapids Building Services for the two custodians needed. In addition to an expected $23,000 in savings, the district hopes to use this as an opportunity to compare the privatized service to in-house custodial services at a comparable elementary school nearby.