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Maine Association of School Business Officals: Article on Outsourcing

Outsourcing Custodial:

By Mark Leslie

Outsourcing custodial services at schools may not be prevalent, but districts that do so are reporting some significant savings.

“We were able to save taxpayers about $100,000 a year,” said Gretchen Gardner, business manager for the Brewer School Department, which has contracted with Service Master for its new 156,000-square-foot pre-K to 8 school. “We would have to add almost three more custodians to cover the cleaning for that building. The cost was too much for our budget compared to what we could get the contractor to do.

This being “a test year,” Gardner suggested it was clearly possible the district would extend the custodial outsourcing to its second school in the next budget year.

Paul Roney, facilities director at Thornton Academy, said he outsourced maintenance for 13 years at the Gorham School Department, saving $200,000 a year when he started. Because of that experience, he and Business Manager Paul Kelley are outsourcing half their custodial work at Thornton Academy in Saco, which has added two boarding dormitories.

“I haven’t figured out the cost savings for Thornton yet because we just brought them [Benchmark Cleaning & Supply of Portland] on board last December. In the long run it will save us some money,” Roney said. “Depending on how you set up the program — whether you purchase the cleaning supplies — you can save even more money.”

Yarmouth School Department Business Manager Dan O’Shea, who uses Benchmark at the high school since it opened recently, reported: “It’s a big win. Given the size of the high school — and a rough estimate of 20,000 square feet per custodian, which is the general standard —the cost of six custodians would be $230,000 to $240,000 a year, not counting the other oversight issues. This contract came in at about $180,000 and that’s counting the weekend stuff, which is far more expensive using your own people.

“That’s a $50,000 to $60,000 annual savings.”

O’Shea also noted that the union wasn’t happy but because it was a brand-new building, he was simply adding jobs, and no employee lost theirs.

Herb Hopkins, director of business services for the Yarmouth School Department, said he outsources custodial services at Rowe Elementary School. The cost: $48,000 a year for a job he said he would have meant hiring two custodians to handle.

Hopkins noted, “A custodial service module is a better fit there [Rowe] because it doesn’t get a lot of after-hour use.”

On the other end of the spectrum are Alan Kochis and Dean Flanagin, business managers at the Bangor and Lewiston school departments, respectively.

Said Kochis: “We tried [outsourcing custodial services] on a limited basis in 1997-98. It lasted a year and we weren’t happy. The quality of the service wasn’t satisfactory and the turnover was tremendous. Every third week a different person was there and you lost continuity.”

Added Flanagin: “It becomes cost-prohibitive because we want staff available during school hours in case you have a spill in a classroom, or something else goes wrong. Contractors make a good fit in an office setting where folks are going home at 5 o’clock and they can come in and get things done without being available 24/7.”

To that point, O’Shea added the caveat that when hiring custodial companies, school districts should “set the standards and have daily oversight.”

“It’s only as good as your person overseeing it, whether it’s your own person or somebody else’s,” he added. “Here we have incredible buildings in general, and the facilities director sets a high bar for all of the district.”

Leo Bifulco, president of Benchmark, who contracts with Winthrop, RSU 1 (Bath), Falmouth, Yarmouth, Gorham and Thornton Academy, concurred that outsourcing does not work best for some.

“We typically talk to two or three schools a year that want to know how it works. Some decide not to do it,” he said. “Smaller schools that aren’t unionized are pretty productive and keep their costs low and it would not be advantageous for them to outsource.

“We talked to one district that would have saved by outsourcing, but it became such a political football that they actually made cuts in education rather than custodial.”

Harrison Clark, owner of Service Master in Herman, attested to the heightened interest in outsourcing among school officials.

“Over the past three or four years I’ve met with superintendents whose districts have 50 school buildings..”

But in his case, Clark said distance to the school district is crucial to whether he will even bid a job.

“Schools are people-intensive cases, with lots of people and lots of activities,” he said. “My belief is that schools need close attention and if you’re an hour from my office that’s too far for me to be comfortable.”

According to all reports, unions in particular argue strongly against outsourcing.

“They tend to paint a bad picture of outsourcing,” Bifulco said. “They say we have high turnover. It’s not true. Upfront it takes time to hire and establish a good workforce. We do that over the first six months. Once it’s established, our turnover is under 10 percent.

“Secondly, they [claim] we pay minimum wage. We haven’t paid minimum wage in 15 years. In most areas our average wage is competitive with the starting wage in many school districts. We also offer medical benefits to our employees. Our employees go through the same fingerprinting process as school employees do. We follow the same guidelines as school districts use in hiring.”

A Guerilla in the Room

Thornton’s Roney ran off a list of reasons, besides finances, he supports outsourcing custodial.

“We save in headaches because I’m dealing with one person, not 12,” he said. “If you’re in-house and a custodian misses work, you don’t have someone in the wings ready to step in; but they [Benchmark] do. You’re not worried about vacations and so forth because they cover all of that.”

And, he said, custodial services have greatly reduced the gap in pay and benefits that exists between public and private employees.

“They’re close to what we’re paying our people hourly. But on the benefit side is a big difference,” he said.

“Outsourcing does resolve a lot of issues in HR (Human Resources) — workers’ comp, sick time, overtime, double time on Sundays,” agreed Falmouth’s O’Shea.

The personnel issue, Bifulco said, “has become a 1,000-pound guerilla for [school districts].”

“They’re tired of dealing with the unions,” he said. “They tend to have an entrenched workforce with which it’s hard to bring about change in different ways of cleaning and being more productive. Their hands are tied from reducing costs.

“A lot of facility directors,” he added, “tell me that dealing with the unions and employee issues occupy 50 percent of their time. One district told me that in one year they had just three days when their entire staff came to work. They take care of sick and personal days and everything else that comes up. With sick and personal and vacations days and holidays, some custodians have over three months off a year.”

Dealing with personnel in the private sector is a different animal, according to Service Master’s Clark. “A school can design a contract that allows them to fire us in 30 days. Not only that, but if you have a problem with one of my employees, I’ll pull him that day. A school can’t do that with their own employees.”

Meanwhile, custodians working for school districts receive what Clark called “tremendous vacation and health insurance and a pretty darn good wage for their skill set because they are tied into teachers’ contracts… We can find good people and deliver good services at a lower cost, and make money doing it.”

Going Green

As “green” goes, so goes another issue in maintaining schools.

Gardner said the new school being LEED-certified played an important role in Brewer’s decision.

“It requires a different level of cleaning standards,” she said, adding that Service Master was better qualified for such work.

Clark and Bifulco both said their companies work to “green” standards.

In fact, Clark hopes his firm will become the first GS42-certified company in Maine. While LEEDS deals with energy efficiency and environmental awareness, GS42 concerns indoor air quality and cleaning services.

Whether “green” or not, interest in custodial outsourcing is peeked in these economic times.

“Our move to contracted cleaning has gotten the attention of school districts in the area. We’ve gotten some calls from other schools about how it is going,” said Brewer’s Gardner. “I wouldn’t be surprised to see other schools go this way.”