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In Your Opinion: Outsourcing Matters … A Lot!

By Mark Fitzgerald, Somerset.

After attending the “Emergency” Franklin Board of Education meeting on Feb. 17, it appears the administration is very unprepared with accurate financial information for both para and sub outsourcing.  Until there is a real proposal to review with adequate time (even a pro-forma proposal) from a qualified vendor, the board should not be asked to vote for or against outsourcing.  If the board sees the actual information (from only one vendor) for the first time on Thursday and then are being forced into an immediate vote to proceed to outsource on Thursday, that lacks good sense, good management, and good governance from the board.

This is a matter impacting hundreds of current employees, thousands of students, and millions of dollars.  For one potential vendor to impose a deadline on the Franklin BOE to act or vote its intent on the matter is completely inappropriate and should not be tolerated.  This is an important decision impacting the district in large and unforeseen ways.  There is no room for error, regardless of the urgency that one potential vendor may create.   This needs to be slowed down and looked at in the right way and not rushed.  Doing otherwise will certainly result in serious mistakes and oversights, which will make the current problem with the budget shortfall seem minor in comparison.

Some points to consider:
– None of the vendors mentioned ever approached or supported a deal of over 120 current staff members. (Can they really handle it?)
– The savings estimates were very “loose” and assume zero internal administrative overhead to manage the 3rd party, which is a false assumption.
– No considerations for financial penalties for non-performance were set in the criteria.
– No considerations or costs for staff shortages and coverages were included to offset the “savings”.  This is not realistic.
– No considerations for talent or skills matching to students was set in the criteria.  (If added, this will certainly add to the cost, reducing savings)
– Many assumptions were made on terms of the contract and how it would be executed.  This directly impacts price/cost.
– It is impossible to know which terms the vendor can/will support and at what additional costs?
– There were no “not to exceed” guarantees asked for by us or given by the vendor.  (This is typically where an outsourcing deal shows its true flaws.)
– Isn’t this subject to an RFP and qualified bidding process?  Isn’t the administration obligated to do so?
– Are we going to make sure the vendor cannot sue the district for damages in the future?
– Does the vendor accept the risk of litigation if they are negligent in performing their duties as required? (e.g., unattended students or classrooms)
– Why is a vote necessary at this time?  The administration should simply compile the real information and choices and present to the board when they have it.
– It should be noted that there is a reason Hunterdon is forcing a vote upon the board.  What is the reason and what obligation does that create?

On a more important note….it defies logic that a third party can provide sub or para services at a lower per diem cost once their requirement for profit is factored in.  The subs and paras are the lowest compensated employees in the district and actually show as a value when compared to using teachers.  (This is why the total now exceeds 120 paras)  Taking even more money away from them is just plain wrong…that well has been tapped and is already dry.

For other areas of savings, many districts and companies are converting from HMO plans to one of the plans offered under the Affordable Care Act and are now saving millions annually.  Is it painful to transition?  Yes.  Will it save millions?  Yes.  Normally two options are given for one year and then converted over to the new plan the following year.  Once people understand it, it is really not a problem, nor as scary as most think it will be.  This is an inevitable, necessary step that needs to be addressed, if not this year, certainly within the next year or two.

Also, as for the requirement to cover employees that work over 30 hours, that is accurate.  It is true that the district must offer a plan, but can also require the employee to be 100% responsible for its cost.  The employee can refuse coverage if they have have a plan elsewhere.  Facts matter, and it seems that some of the people in the administration lack knowledge of the facts, which scares everyone.

Bottom line, it appears that the administration is not prepared or currently qualified to oversee such a major transition and contract execution.  With the interim superintendent, Ms. Pagan, leaving the district in less than two months and no successor identified, now is not the time to take such a large risk in a district which has more than enough issues on its plate.  This conversion exceeds the administration’s ability to execute properly.  For that reason alone, it should be tabled.

Hopefully the members of the board will realize the gravity of this decision and not allow themselves to be forced into this rushed plan and proposal.  Stand up and don’t allow yourselves to be pushed into this at this time.  It is your duty to defend the district from such actions.

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