Will Outsourcing Save the County Money?

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Will Outsourcing Save the County Money?

Over the last few months, news of upcoming health care increases for non-certified employees, has dominated BOE (Board of Education) budget talks. As such, news of these new mandated expenditures has strained the budget. During this time, Chief Financial Officer (CFO) Amy Burgess says she has worked on a “no frills” budget, adjusting it to necessities. As the budget moves toward approval in the next couple months, the board and staff continue to explore new ways to save money. The latest of these explorations is outsourcing services.

During last week’s BOE budget workshop, Superintendent Ben Desper asked the board for direction on the idea of outsourcing the district’s Transportation operations. Although the board could not take action on the issue during the budget workshop, Desper said he would like feedback on the issue, so that, perhaps later the board could vote on the item. Discussing the prospect of outsourcing, Director of Operations Rick Little said he was contacted previously by board members to investigate the prospect of such an arrangement. As such, he said he received some estimates from Student Transportation of America, a company that provides school bus transportation services to school districts nationwide.

He emphasized that the figures he received from the company are only preliminary figures and general estimates.

Little said that two options are available: 1) Outsource the entire Transportation operation. 2) Outsource only the personnel part of Transportation.

“I don’t feel like I really want to go down the route yet of looking at outsourcing our total operation,”

he said, recommending the latter option, personnel, defined only by drivers and monitors.

“We feel like the front office people and our mechanics are people that we at least want to retain control of,”

he added.

According to Little, the prospect of outsourcing Transportation personnel has benefits and challenges. Based on data received from the company, he noted, STA offers benefits to drivers and monitors that the county currently does not provide. Some of these benefits include higher step increases (raises) and a 401K retirement program. But, the larger benefit is in the health care and workers’ compensation arrangement. In this arrangement, STA manages the health and workers’ compensation insurance. Little said it will cost the county approximately $180,000 more to outsource with STA.


he added,

“where the savings are going to be realized is over the next two or three years, as we go down the road with this insurance issue and workers’ comp.”

He said the county currently has three people receiving workers’ compensation benefits, noting the county is paying for these employers who are not working and their replacements. With the outsourcing arrangement, STA will pay for these expenses.

STA also offers a larger step increase than drivers and monitors currently receive from the county, Little said. During the discussion, Burgess confirmed the step increase these employees presently receive is .5 percent. With STA, however, these employees will receive a

“two percent annual increase in years two to five of contract (and a) 15 percent increase in drivers/monitors’ annual salary.”

This means for the first two to five years employees will receive increases of 17 percent. He explained the way the company can do this is by allowing the employees to receive unemployment benefits in the summer and during Christmas break.

Little also expounded on the retirement plan. STA’s 401K program, he said, matches 100 percent for the first three percent of the employee’s salary and 50 percent above the first three percent.

With the encouragement of Superintendent Desper, the board agreed to submit Request for Proposal’s (RFPs) for outsourcing both the entire operation and personnel only. These RFPS, though, are only for purposes of data gathering, he stressed. The STA figures were used as examples only. Little said it was too late to receive estimates and eventually implement an entire outsourcing of the Transportation operation, but remarked that it was not too late for personnel only. Additionally, Little emphasized if the county decides to outsource transportation personnel, it would require the company to retain all employees at the same pay rate for one to two years, after which time, retention would be at the discretion of the company. Little continued to stress that the prospect of outsourcing is only in the preliminary stages.

In addition to outsourcing Transportation (or a part of it), the board is also considering outsourcing the Pickens County Alternative School Program. According to the discussion during the budget workshop, the county is having difficulties with student behavior on the lengthy bus ride to the Gilmer facility. The implication, here, is that behavior may improve on a shorter bus ride with fewer students. Also, the threat of losing students is high.

“We’re losing some kids. They got a situation up there right now where they got 99 students attending school in the same spot,”

Desper said. Another issue is cost. Currently, the county spends $260,000 on the tri-county program. Little said the first year would cost $180,000 of using a private company for these services, but Superintendent Desper said by outsourcing, the county would save $80,000. One challenge is location. Desper said the location can not be one that is controversial, like near an Elementary School and said a room is needed for a maximum of fifteen students.

The board supported the idea and urged the superintendent to move forward with the plan. The recommended company is Ombudsman. Desper said he would have a representative from the company come in and give a presentation in the next few weeks, in time for the next meeting.


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