Real costs of outsourcing

On July 20, 2004, school bus drivers of AFSCME Union Local 1275 held a rally at the Rockford Board of Education at 201 S. Madison St. The purpose of the rally was to inform the District 205 community that the Board of Education had requested RFPs (Request for Proposals) for contracting out “Janitorial/Custodial, Food Service Management and Pupil Transportation Services.” If the board awards these contracts, hundreds of District 205 union workers will lose their jobs.

Privatization of public school services is a mantra often touted by the private sector as a quick solution for school districts facing tough economic decisions. Public schools, however, are more than an industry or lucrative market for a quick return on investment. They are a fundamental institution basic to our form of government, crucial to the economic well-being and viability of our community, and essential to the American axiom that all children have equal opportunity in education. If a community does not invest in its own educational and economic infrastructure, its future is tenuous at best.

District 205 is not alone in confronting hard choices to insure quality education. Health care costs are continuing to outstrip yearly inflation; large numbers of experienced 205 educators are retiring in the next two years; and state and federal funding for education continues to decline in the face of the hemorrhaging federal deficit. As the largest employer in the Rockford area, District 205’s educational and fiscal decisions directly impact the economic livelihood of our entire community.

In considering privatization of District 205’s custodial, food service and transportation services, the short-term gains of cutting costs often come with higher future expenses and a concomitant decrease in quality, safety and management of these same district resources. Further, not all outsourced services can be reinstated “in-house” if the contractor falls short of expectations, or proves too costly in the long term.

This is especially true of transportation services. Once a school district sells its entire fleet of buses and its maintenance and repair operations (M&R), which almost always occurs when a private carrier assumes operation, that school district will never again have the cash or borrowing power to provide pupil transportation, no matter how dissatisfied they become with the contractor. The Michigan school district of Van Buren found that out in 1998 when they decided to reinstate in-house transportation services after years of private management. Long-term cost analysis showing higher costs and dissatisfaction with Laidlaw’s services prompted Van Buren’s decision. The Ann Arbor Public Schools (AAPS) affirmed the same decision not to privatize transportation services when its Sept. 22, 2003, Transportation Improvement Plan1 clearly showed that initial costs savings from selling its bus fleet did not compensate for the increased contractor costs in years two, three and beyond. As the report states: “Beginning in year two, and for every year thereafter, the contracted scenario is more expensive than the in-house option.” Further, the report adds: “The addition of unavoidable costs makes the relationship favor the in-house service delivery scenario, and is only compensated by the sale of the fleet, which is a one-time gain.” The AAPS report echoes what many school districts across the nation have found out about the real costs of privatization.

The union workers of District 205 are dedicated in their commitment to provide high-quality services for the students and families of our community. Most of these workers have children in our schools, pay mortgages and local taxes, buy local services and provide real economic value-added benefits to the local economy. AFSCME’s professional commitment to District 205 is a value that will never be shown as a line item in a budget, nor will it appear in the specifications of a private contract. But ask the children and parents who depend on safe transportation, school lunches and clean schools every school day what the value of these services are to their personal and community well-being? No private contractor can provide this intangible benefit-commitment, which is so essential to the educational mission of District 205, the well-being of our children and the future of the Rockford economy.


Craig G. Campbell is a local researcher and writer.

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