Letter: Substantial savings by outsourcing Unionville busing

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To The Editor:

TAS (Transportation Advisory Services) determined that there are substantial savings possible if we choose to outsource transportation. This is because we now pay well above market total compensation in using District employees to provide non-teaching services.

Because all our employees are subject to PSERS we are forced to pay for extremely expensive pensions that private sector businesses do not need to match. We have also been providing very costly health benefit packages to non-teaching employees that far exceed what is necessary to be paid to attract workers in the private sector.

TAS noted that we have been giving full-time benefit packages to transportation department workers that often work 10 months a year and 30 hours a week or less. That makes for a huge disparity in the cost of in-house workers versus contracting out.

The projected increases in the PSERS contribution rates* are staggering:

[table id=4 /]* Source:  UCF School Board’s last proposal-  dated 9/10/10

The State of Pennsylvania now pays 50% of our PSERS bill but that money is not a legal obligation and is subject to change. Based on the recently released budget in which UCFSD lost almost $500,000 in funding, it seems likely that the state’s contribution level will be the same at best, or much lower in a worst-case scenario.

Unless we rework the employment terms of the transportation and support staff of all UCFSD employees we will be facing almost a 400% increase in what we must charge our taxpayers for PSERS contributions even if the state continues to fund at 50%!

In the private sector there are ‘hard ceilings’ in what certain job descriptions can earn regardless of the employee’s length of service or skill level. A secretary, custodial worker, grounds keeper or the like would typically be limited to a ‘market rate’ indicating the wage needed to attract and retain capable people for those positions. Benefit packages would also be commensurate with what other businesses competing for those same workers would pay. Defined benefit pensions are virtually extinct.
Here at UCFSD we have been paying way over market rates for almost all support staff positions when you include the gold-plated healthcare and pension packages. Many relatively low level jobs became very highly paid positions simply due to annual raises that compounded and had no ‘hard ceilings’ based on the job duties.

We simply can no longer afford the luxury of spending way more than is necessary to fill jobs when millions of highly qualified workers are unemployed and standing ready to do the same work for much lower pay.

Our economics teachers would certainly confirm that in a free-market system the pay most people receive is inversely proportional to their ability to be replaced.

This is not meant to be a mean spirited attack on our fine employees. It merely recognizes the fiscal reality that our district now faces. We have a finite amount of money to spend. Our primary function is to provide a quality education to our community’s children. Every dollar of overspending on anything else will, by definition, have to come out of the educational process.

Dr. Paul Price,

School Board Director Region C

Unionville-Chadds Ford Board of Education

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3 Comments

  1. Stephanie McGann says:

    Dr. Price,

    While it is obvious your projections are worrisome, however, most of these costs will still be present in a privatized system. The only difference is that we will by paying a corporate middleman a profit on top of the expenses. You show no documented proof that this will actually save money. It seems only a way of shifting blame on rising costs from a school board who failed to look ahead and plan accordingly to a corporate scapegoat. You site PSERS expenses – yet these were not unknown and should have been budgeted for years ago.

    ************
    Outsourcing our buses will not save any huge amount of money.
    It could cost more in the long run.

    ************

    It will however mean that as a mom I will no longer have the ability to know who my kids bus driver is and know that they are member of our own community. I for one feel this is a dangerous move and one that I am not comfortable with. We chose this school district for a reason.

    Stephanie McGann, DMD FAGD

    • Paul Price says:

      Stephanie,

      You obviously did not read either the actual report (available on the UCFSD website) or understand my comments.

      Private employers do not offer defined benefit pensions anymore. They have no PSERS (or equivilent) costs to deal with. Private employers do not provide $19,000 benefits packages to drivers who work 20 – 35 hours per week and just 10 months a year.

      This is where the cost saving come from. A UCFSD driver who works 1000 hours a year at $16 /hour costs $16,000 in salary and $19,000 in medical benefits plus significant PSERS costs to the District. Their salaries are well under 50% of the total compensation cost.

      The TAS study uneqivically asserts their feeling that we could save significant money through outsourcing. This is the professional opinion of a top industry consultant – not mine.

      Your view of no cost savings is completely out of line with what was put forth after an intensive study and many days of research and comparisons with other comparable school districts that already outsource.

      Go to the UCSFD website and actually read the full report before spouting off unsupportable, and inaccurate statements.

      If we can save $500,000 – $1,000,000 per year on non-educational expenses we can preserve the academic programs that really make a difference in the quality of our childrens’ educations.

      If that potential savings is not realized we’ll be seeing cutbacks in the true educational programs rather than just a change in who’s driving the buses.

      Every other district in our area outsources and the services in those areas do not seem to be causing any problems. I’m certain that the drivers in those districts are also professionals and care about the students they transport.

      • Stephanie McGann says:

        Dr. Price,

        While I agree with your point of view, as an employer I know full well that the salary is the least of the total compensation package. I also know that it’s only a matter of time (minimal time) where all employers are going to be required to fund benefit packages for all employees. I’m quite certain that any company we outsource too will pass all of those costs and administration fees along to the school district thereby negating any and all cost savings.

        As with everything in life the benefit has to outweigh the risk.

        As a parent I am concerned. As a taxpayer I understand the motivation. There is no good answer. I just want some realistic guarantee of savings before we put our kids on a motor vehicle with a driver that the school has no control over.

        Stephanie McGann

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