Contents of this issue:

  • Oakland County Leases Nursing Home

  • Bullock Creek Looks into Cleaning Contract

  • Tuscola County Jail Picks Canteen

  • Grosse Pointe Schools Looks to Save Through Outsourcing

  • Substitute Teacher Privatization in Kent and Ottawa Counties

  • Charlevoix Substitute Contracting Creates Controversy

  • Cedar Springs Looks to Expand Cleaning Contracting

  • Inland Lakes Improves Food Service by Contracting Out

Oakland County Leases Nursing Home

PONTIAC – The Oakland County Board of Commissioners has decided to lease its Golden Oaks Medical Care Facility to a private vendor, according to The Detroit News.

Golden Oaks had lost $3.6 million over the past four years due to lower occupancies, heightened competition, changes in Medicaid reimbursements and inspection penalties. The county projected that over the next five years, the facility will lose a projected $12.5 million.

The county will pay $500,000 annually to Ciena Healthcare Management to manage the facility. The company will assume the risk of profit and loss under the agreement.

The facility requires extensive capital improvements in order to bring it to modern standards. These include installing a sprinkler system and upgrading nurses’ stations, fire alarms and the security system.

These improvements alone would cost the county $4.9 million.

In order to compete with private vendors, the facility would also need to switch from 4-bed units to 2-bed units, offer private rooms, add a resident lounge area, and add a dementia/memory care unit, according to an Oakland County executive report.

Instead of updating the facility, Ciena will construct a new facility within the next three years. The new facility will offer the same amount of beds that are currently provided at Golden Oaks. All of the residents will be given the option to transfer to the new facility.

Bullock Creek Looks into Cleaning Contract

MIDLAND – Bullock Creek schools may turn to privatization to overcome its projected budget deficit this year. The district’s general fund balance has fallen in recent years from $1.63 million in fiscal year 2002 to $555,325 last year according to the Midland Daily News.

A number of cost-saving proposals were made at the district’s school board meeting in November. These included contracting out for janitorial services, salary freezes, cutting administrators, and purchasing fewer buses, the Daily News reported.

A sample request for proposals for contracting custodial services was issued to board members for review at its December meeting.

Tuscola County Jail Picks Canteen

CARO – The Tuscola County Jail switched its food services from self-provided to contracted service, according to the Tuscola Advertiser.

The sheriff’s department, which operates the facility, had been employing a few long-time employees to provide the service. Those employees recently retired and the department decided to contract the service with Canteen, a division of the Compass Group, which also operates the school food service provider Chartwells.

Sheriff Tom Kern is confident in the company’s ability to provide services, the Advertiser reported.

"The MDOC (Michigan Department of Corrections) has certain guidelines that have to be followed for meals served to inmates and Canteen knows those regulations," he told the Advertiser.

By contracting out, the county avoids the financial risk of the providing the service. "By having them take care of the meals, it takes care of our liability," Kern told the Advertiser.

Grosse Pointe Schools Looks to Save Through Outsourcing

GROSSE POINTE – The Grosse Pointe Schools are investigating contracting out its custodial services for the next fiscal year, according to the Detroit Free Press.

The board discussed the change last year, but contracting was declined when the support service union agreed to wage and benefit concessions, the Free Press reported.

District officials have met with potential vendors and made numerous cost-comparisons, according to Superintendent Suzanne Klein.

The district has contracted with Sodexho for food services the past two years.

"We’re just in an unfortunate position, as is every district in the state, where we have to look at everything all the time," school board President Brendan Walsh told the Free Press.

Substitute Teacher Privatization in Kent and Ottawa Counties

GRAND RAPIDS – All but four school districts in Kent and Ottawa counties contract with Professional Educational Services Group for substitute teachers, according to The Grand Rapids Press. School districts have been allowed to contract with private vendors for substitute teachers since Public Act 735 of 2002 passed.

Approximately 2,000 teachers are now dispatched through PESG, The Press reported.

By contracting substitute teaching, districts no longer have to pay into the state’s retirement system for those individuals, saving an average of 8.5 percent of substitute costs, The Press reported.

Contracting for substitute teachers also simplifies some of the process. The teachers now receive one paycheck and one W-2, instead of receiving them from each district where they work, The Press mentioned.

Charlevoix Substitute Contracting Creates Controversy

CHARLEVOIX – The Charlevoix Public Schools will save about $26,000 this year by contracting with a private vendor to fill a teaching position, according to the Petoskey News-Review. The long-term substitute will fill in for a teacher who is out on maternity leave.

The teachers union, however, filed a grievance, arguing that the collective bargaining agreement prevents using an outside vendor to provide these services as it represents a change in school board practices, the New-Review reported.

Union Uniserv Director Terry Cox said that all of the district’s long-term vacancies were filled with full-time teachers in the past. State law changed in 2002 to allow for contracting with private firms for substitute teachers.

Board Member Dean Spencley told the News-Review, "We helped three parties. We gave a teacher a leave of absence. We gave another teacher a foot in the door, hopefully for a future hire, and we also saved the district money."

Cedar Springs Looks to Expand Cleaning Contracting

CEDAR SPRINGS – Cedar Springs Public Schools will be investigating custodial contracting, according to The Grand Rapids Press.

The district expects to spend $1.6 million more than it receives, prompting school board members to look for ways to mitigate the deficit, The Press reported.

According to the Mackinac Center’s summer school survey, the district already contracts out for food services and custodial services at one of its buildings, saving $190,000 annually, according to The Press.

Inland Lakes Improves Food Service by Contracting Out

INDIAN RIVER – The Inland Lakes Schools has contracted with Chartwells to provide food service in an attempt to eliminate a loss of $30,000 annually, according to Superintendent Mary Jo Dismang.

The company has been operating the program since the beginning of the school year.

"We’ve definitely been pleased with the level of service," stated Dismang, "Students have been very happy with the selections."

Although she stated that it has been too early to perform an analysis, she noticed that participation in the lunch program has increased.

Around the State is a service of the Michigan Privatization Report, a twice-yearly publication of the Mackinac Center for Public Policy with a circulation of more than 22,000. The Mackinac Center for Public Policy is an independent, non-profit research institute located in Midland, Michigan.