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Privatizing Certain SB Functions

Phillip N. Bazzani, CPCM, MBA Supervisor – York District

Gloucester County, Virginia February 17, 2014

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Discussion Topics ! Gloucester’s  economic  reality.  

! What  is  priva6za6on?  

! Why  priva6ze?  

! What  can  be  priva6zed?  

! What  are  the  poten6al  savings?  

! What  other  states  have  found.  

! What  other  locali6es  are  doing?  

! What  might  this  mean  for  our  schools?  

! Recommenda6ons  

 

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Gloucester’s Economic Reality !  Gloucester  is  at  an  economic  cross  roads,  and  our  current  economy  is  

stagnant.  

!  Taxpayers  are  being  asked  more  and  more  to  fund  both  the  county  and  school  opera;ons.  

!  Household  income  averages  $58,000;  and  with  tax  expenses  and  mortgages,  there  is  less  than  $850/month  of  discre;onary  income.  

!  The  number  of  households  in  Gloucester  are  only  half  of  our  neighboring  locali;es,  such  as  York  and  James  City.  

!  The  County  and  School  Board  (SB)  must  robustly  find  ways  to  alleviate  the  burden  to  the  taxpayer  and  facilitate  private  sector  growth.  

!  The  County  and  the  SB  must  look  introspec;vely  into  their  budgets  and  adjust  where  necessary  much  like  the  ordinary  ci;zen  must  do  when  economic  condi;ons  change.  

 

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What is Privatizing?

!  Priva;za;on  is  the  transfer  of  government  services  to  the  private  sector.    

 !  Services  formerly  provided  by  government  may  be  

contracted  out.      !  The  objec;ve  is  oPen  to  increase  government  efficiency  

and  reduce  opera;ng  costs.  

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Why Privatize? !  Schools  provide  a  variety  of  services  having  no  rela;on  to  

their  fundamental  role  of  educa;ng  students.    !  Such  services  can  be  subject  to  priva;za;on.    !  By  priva;zing  these  non-­‐educa;on  related  func;ons,  we  

may  achieve  two  posi;ve  results:    

 

 "  Educators  are  allowed  to  focus  on  

educa;on.    "  Priva;zing  may  lower  the  cost  and  

improve  the  quality  of  those  services  that  have  been  outsourced.    

 

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What Can Be Privatized? !  The  following  are  poten;al  “non-­‐academic”  candidates  that  

could  be  considered  for  priva;zing  by  the  School  Board  (SB):    

"  Transporta;on,    "  Food  services,  "  Cleaning  and  Maintenance  (Custodial)  "  Technology  Management  

!  Freeing  up  these  func;ons  to  private  firms  could  poten;ally  allow  school  teachers  to  focus  on  their  core  mission:    

 

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What are the Potential Savings? !  Two  statewide  surveys  of  school  districts  in  Illinois  and  

Alabama  showed  that  priva;zed  non-­‐academic  services  saved  tax  dollars  to  the  school  system.  *  

 !  The  systems  were  then  able  to  reallocate  the  savings  

into  core  services-­‐teachers'  pay,  new  textbooks  and  computers,  and  other  instruc;onal  ac;vi;es.*  

!  Even  the  AASA  states  that  the  most  frequently  contracted  services  include  food  services,  custodial  and  transporta;on  as  the  most  visible  because  these  func;ons  consume  the  greatest  propor;on  of  school  budgets.**  

 

 *Source:    Geoffrey  F.  Segal,  The  Reason  Founda6on  and  a  member  of  the  Board  of  Scholars  of  the  Virginia  Ins6tute  for  Public  Policy.  **  American  Associa6on  of  School  Administrators  

 !  Savings  typically  range  from  12  to  25  percent.*  

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What Others States Found

 !  Gloucester  SB  should  carefully  consider  how  non-­‐core,  non-­‐educa;on  

related  services  are  provided.  

!  Priva;za;on  can  allow  the  School  Board  to  enhance  the  educa;onal  experience  of  Gloucester’s  youth.    

*Source:    Geoffrey  F.  Segal,  The  Reason  Founda6on  and  a  member  of  the  Board  of  Scholars  of  the  Virginia  Ins6tute  for  Public  Policy.  

!  Some  of  the  most  important  conclusions  from  the  Alabama  and  Illinois  surveys  showed  that  two-­‐thirds  of  school  officials  rated  priva;za;on  a  success.*    

!  Outsourcing  can  be  used  to  address  budget  challenges  while  direc;ng  more  funds  toward  instruc;onal  programs.*  

 

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What Other Localities Are Doing !  Hampton  City  public  schools  were  recently  presented  with  a  Facili6es  

op6on  that  showed  a  20%  reduc6on  in  facili6es  and  maintenance  costs.*    !  Richmond  public  schools  is  considering  outsourcing  its  transporta6on  and  

facili6es  maintenance  departments.  

!  Roanoke  City  Schools  outsourced  its  student  transport  in  2009.    Controversial  at  the  6me,  a  Roanoke  City  Schools  spokesperson  says  the  district  saves  $1.4  million  every  year  because  it  outsources  its  transporta6on.**  

 !  Norfolk  public  schools  contract  out  for  supplies,  training  and  some  

management  services.**    !  Portsmouth  public  schools  outsources  some  maintenance  services  such  as  

HVAC.**  

!  In  2009,  the  Isle  of  Wight  school  board  voted  to  turn  their  custodians  over  to  a  na6onal  commercial  cleaning  company  saving  about  $500K  in  costs.**  

*      Hampton  City  Public  Schools,  School  Board  Mee6ng  2-­‐19-­‐14  Presenta6on  **Source:    PilotOnline;  11-­‐15-­‐13  

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Recommendations !  Take  a  close,  introspec;ve  look  at  “non-­‐academic”  SB  services  and  

iden;fy  which  can  be  candidates  for  outsourcing.  

!  Benchmark  locali;es  that  already  have  priva;zed  programs  –  see  what  works  or  does  not  work.  

! Work  with  Central  Purchasing  to  solicit  RFPs  and  have  vendors  present  their  proposals  to  the  SB.  

!  Decide  whether  proposals  will  actually  lower  costs.  

!  Savings  should  be  returned  to  the  School  System  for:  

"  Teacher’s  pay  "  New  Technology  "  Hiring  more  teachers