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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