Board Work Session March 8, Custodial Program Update

Transcription

1 Board Work Session March 8, 2018 Custodial Program Update

2 Background and Options Moving Forward For the past 13 years, DPS has contracted with Service Solutions for custodial services and program management The current contract is nearing the end of its term, and DPS is faced with a choice between several options: 1. Continue with outsourced services at the current budget 2. Continue with outsourced services at a higher cost, to increase pay and add some paid sick days/holidays 3. Shift to an in-house model, providing custodians with DPS salaries and full benefits 4. Shift to an in-house model, but mitigate the cost increase by paying part-time custodians based on state salary schedules 2

3 Option 1: Contracted Services, Same Budget The cost of custodial services is driven by personnel salary and benefits Cost savings in the current contract are achieved through very low wages for most part time employees and minimal paid time off for full-time custodians Staff does not recommend continuing w/ the current salary and benefit structure Contractor's Current Salary and Benefit Structure Full-Time Employees Part-Time Employees (less than 30 hours per week) Service Solutions Hourly Wage $15 Paid Sick Leave 0 Paid Holidays 0 Annual Leave 5-10 annually Health Insurance $121/month for individuals; $407/month for families Retirement 401K: Employer contributes max of 2.1% Hourly Wage $8 - $9 for most employees Paid Sick Leave 0 Paid Holidays 0 Paid Annual Leave Days 0 Health Insurance N/A Retirement N/A 3

4 Option 2: Contracted Services with Enhanced Pay & Benefits DPS requested quotes from bidders to increase the minimum part-time wage to $11/hr. and add 5 paid sick days and 5 paid holidays for all custodians The quoted additional cost to the district is $620k with Service Solutions and $850k with GCA Vendor s Updated Quotes with $11/hr. minimum part-time wage; 5 paid sick days and 5 paid holidays for all custodians Additional Cost to the District Above FY Budget Service Solutions GCA $7,578,806 $7,813,135 $616,762 $851,091* *The additional cost would rise to $1.2 M if all full-time employees elect health care benefits 4

5 Comparison of Vendor & DPS Wages and Benefits Contractor's Salary & Benefit Structure Under Option 2 w/ Comparison to DPS Benefits Full-Time Employees Part-Time Employees (less than 30 hours per week) Service Solutions GCA Durham Public Schools Hourly Wage $15 $15 $13.07-$16.00 Paid Sick Leave 5 annually 5 annually 1 per month; per year Paid Holidays 5 annually 5 annually 11 per year Vacation Days 5-10 annually 5 annually 1.17 per month; per year Health Insurance Retirement $121/month for individuals; $407/month for families 401K: Employer contributes max of 2.1% $247/month for $25/month for individuals; individuals; $598/month for families ~$1,500/month for families 401K: Employer contributes max of 3.5% Hourly Wage $11 $11 Defined Benefit (pension): employer contributes 18.44% $13.07-$15.52 w/ DPS schedule; $ $14.86 w/ state salary schedule Paid Sick Leave 5 annually 5 annually 1 per month; per year (prorated) Paid Holidays 5 annually 5 annually 11 per year (prorated) Paid Annual Leave Days per month; per year (prorated) Health Insurance N/A N/A N/A Retirement N/A N/A NA 5

6 Option 2.1: Contracted Services with Enhanced Pay & Benefits The vendors also included quotes to increase the full-time wage to $16.12/hr., add 5 paid sick days and 5 paid holidays for all custodians, and increase the minimum part-time wage to $11/hr. The quoted additional cost to the district is $776k with Service Solutions and $1.1 M with GCA Vendor s Updated Quotes with $11/hr. minimum part-time wage; 5 paid sick days and 5 paid holidays for all custodians Additional Cost to the District Above FY Budget Service Solutions GCA $7,738,372 $8,093,181 $776,328 $1,131,137* *The additional cost would rise to $1.5 M if all full-time employees elect health care benefits 6

7 Option 3: In-House Model with DPS Salary Schedules Moving to an in-house model under Option 3 would increase program costs by approximately $1.5 M, but would provide parity with other classified staff (e.g., cafeteria workers) All custodians would earn at least $13.07/hour and receive paid sick days, paid vacation days, and paid holidays annually Full-time staff would also receive state employee health and retirement benefits Full-Time Employees Part-Time Employees (less than 30 hours per week) DPS Custodial Pay and Benefits Hourly Wage $13.37-$16.00 Paid Sick Leave 1 per month; per year Paid Holidays 11 per year Vacation Days 1.17 per month; per year Health Insurance $25/month for individuals; $598/month for families Retirement Defined Benefit (pension): employer contributes 18.44% Hourly Wage $13.07-$15.52 w/ DPS salary schedule Paid Sick Leave 1 per month; per year (prorated) Paid Holidays 11 per year (prorated) Paid Annual Leave Days 1.17 per month; per year (prorated) Health Insurance N/A Retirement NA 7

8 Option 4: In-House Model with DPS & State Salary Schedules If budget constraints preclude moving forward with Option 3 in FY , Option 4 presents the possibility of paying part-time employees based on the state salary schedule with a minimum wage of $11.22/hr All other parameters are the same as in Option 3. The estimated cost increase under Option 4 is $1.1 M Full-Time Employees Part-Time Employees (less than 30 hours per week) DPS Custodial Pay and Benefits Hourly Wage $13.37-$16.00 Paid Sick Leave 1 per month; per year Paid Holidays 11 per year Vacation Days 1.17 per month; per year Health Insurance $25/month for individuals; $598/month for families Retirement Defined Benefit (pension): employer contributes 18.44% Hourly Wage $11.22-$14.86 w/ state salary schedule Paid Sick Leave 1 per month; per year (prorated) Paid Holidays 11 per year (prorated) Paid Annual Leave Days 1.17 per month; per year (prorated) Health Insurance N/A Retirement NA 8

9 In-House Considerations Key considerations for a transition to in-house custodial services include: Budgetary Risk > Reallocation of $1.1 M to $1.5 M in existing funds or a new money request will be required to implement an in-house model > The district would also incur a one-time start-up cost of approximately $1.2M to purchase durable custodial cleaning equipment along with fleet vehicles and phones > Unforeseen overages could push actual program expenditures above staff estimates Cost Escalation > Annual program costs may increase more rapidly under an in-house model, due in part to salary increases and the rapidly escalating cost of state health insurance and retirement contributions Logistics > The district will need to establish a transition team, determine staffing schedules, hire and train management personnel, hire and train head custodians, hire and place nearly 300 additional custodians, and procure all necessarily equipment and supplies Timeline > Senior staff cannot realistically envision clearing all of the logistical hurdles to properly implement an in-house model by June 1st. 9

10 Principal Survey The administration surveyed all DPS principals to gather their input on satisfaction with current custodial services and decision points moving forward Roughly half of principals (23 out of 45 responding) expressed dissatisfaction with the quality of service provided by Service Solutions > Elementary school principals were mostly dissatisfied, while secondary principals were mostly satisfied. Similarly, a majority of elementary school principals could support moving to an in-house custodial program, while a majority of secondary principals could not In addition to the DPS principal survey, 13 principals also responded to a supplemental survey administered by DAE: > The most commonly expressed concerns voiced by principals in the DAE survey included high turnover among evening custodians, inadequate staffing, and inadequate cleaning > Ten out of thirteen principals responding to the DAE survey support bringing all custodians under the DPS umbrella if there was a centralized, in-house management team > All thirteen respondents stated that it is very important for all employees working in their building to receive living wages and good benefits 10

11 Custodial Meetings Senior DPS staff conducted two meetings with approximately 60 contract and DPS custodians to discuss options moving forward Most custodians favored moving to an in-house model Some common concerns and allegations under the current program include: > Inadequate pay and benefits, especially paid time off > Lack of manpower and supplies to perform the work efficiently > Lack of help during the summer months > Lack of regular evaluations by supervisors > Performing extra work without pay 11

12 Human Resources Feedback HR concerns staffing hardship for schools; managing absences; risk management Custodial pay should not be determined in isolation inextricably linked with classified salary study > Must look at other jobs within classified study and avoid getting off track with other classifications (bus drivers, cafeteria, TAs, etc.) If DPS decides on in-house custodial services, then HR strongly recommends going with a pilot of a small group of schools, then scaling up HR would have to hire 250 (part and full-time) employees by May 31 at a time when the district is hyper focused on teacher recruitment and new teacher contract system The district would have to properly train/prepare 50+ lead custodians by May 31 supervisory skills and leadership are critical to an in-house model HR would have to quickly hire at least 1 FTE to assist with staffing 12

13 DISCUSSION 13