Board Work Session March 8, 2018 Custodial Program Update - - PowerPoint PPT Presentation

Custodial Program Update

Board Work Session March 8, 2018

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

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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 Service Solutions Full-Time Employees Hourly Wage $15 Paid Sick Leave Paid Holidays Annual Leave 5-10 annually Health Insurance $121/month for individuals; $407/month for families Retirement 401K: Employer contributes max of 2.1% Part-Time Employees (less than 30 hours per week) Hourly Wage $8 - $9 for most employees Paid Sick Leave Paid Holidays Paid Annual Leave Days Health Insurance N/A Retirement N/A

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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

Service Solutions GCA Vendor’s Updated Quotes with $11/hr. minimum part-time wage; 5 paid sick days and 5 paid holidays for all custodians $7,578,806 $7,813,135 Additional Cost to the District Above FY 2017-18 Budget $616,762 $851,091*

*The additional cost would rise to $1.2 M if all full-time employees elect health care benefits 4

Comparison of Vendor & DPS Wages and Benefits

Contractor's Salary & Benefit Structure Under Option 2 w/ Comparison to DPS Benefits

Service Solutions GCA Durham Public Schools Full-Time Employees Hourly Wage $15 $15 $13.07-$16.00 Paid Sick Leave 5 annually 5 annually 1 per month; 10-12 per year Paid Holidays 5 annually 5 annually 11 per year Vacation Days 5-10 annually 5 annually 1.17 per month; 12-14 per year Health Insurance $121/month for individuals; $407/month for families $247/month for individuals; ~$1,500/month for families $25/month for individuals; $598/month for families Retirement 401K: Employer contributes max of 2.1% 401K: Employer contributes max of 3.5% Defined Benefit (pension): employer contributes 18.44% Part-Time Employees (less than 30 hours per week) Hourly Wage $11 $11 $13.07-$15.52 w/ DPS schedule; $11.22 - $14.86 w/ state salary schedule Paid Sick Leave 5 annually 5 annually 1 per month; 10-12 per year (prorated) Paid Holidays 5 annually 5 annually 11 per year (prorated) Paid Annual Leave Days 1.17 per month; 12-14 per year (prorated) Health Insurance N/A N/A N/A Retirement N/A N/A NA 5

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

Service Solutions GCA Vendor’s Updated Quotes with $11/hr. minimum part-time wage; 5 paid sick days and 5 paid holidays for all custodians $7,738,372 $8,093,181 Additional Cost to the District Above FY 2017-18 Budget $776,328 $1,131,137*

*The additional cost would rise to $1.5 M if all full-time employees elect health care benefits 6

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 10-12 paid sick days,

12-14 paid vacation days, and 10-11 paid holidays annually

• Full-time staff would also receive state employee health and retirement benefits

DPS Custodial Pay and Benefits Full-Time Employees Hourly Wage $13.37-$16.00 Paid Sick Leave 1 per month; 10-12 per year Paid Holidays 11 per year Vacation Days 1.17 per month; 12-14 per year Health Insurance $25/month for individuals; $598/month for families Retirement Defined Benefit (pension): employer contributes 18.44% Part-Time Employees (less than 30 hours per week) Hourly Wage $13.07-$15.52 w/ DPS salary schedule Paid Sick Leave 1 per month; 10-12 per year (prorated) Paid Holidays 11 per year (prorated) Paid Annual Leave Days 1.17 per month; 12-14 per year (prorated) Health Insurance N/A Retirement NA

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Option 4: In-House Model with DPS & State Salary Schedules

• If budget constraints preclude moving forward with Option 3 in FY

2018-19, 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

DPS Custodial Pay and Benefits Full-Time Employees Hourly Wage $13.37-$16.00 Paid Sick Leave 1 per month; 10-12 per year Paid Holidays 11 per year Vacation Days 1.17 per month; 12-14 per year Health Insurance $25/month for individuals; $598/month for families Retirement Defined Benefit (pension): employer contributes 18.44% Part-Time Employees (less than 30 hours per week) Hourly Wage $11.22-$14.86 w/ state salary schedule Paid Sick Leave 1 per month; 10-12 per year (prorated) Paid Holidays 11 per year (prorated) Paid Annual Leave Days 1.17 per month; 12-14 per year (prorated) Health Insurance N/A Retirement NA

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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.

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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

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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

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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

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DISCUSSION

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