Facilitating savings

What competitive sourcing can do for CCSD

By Patrick R. Gibbons
  • Monday, November 16, 2009

The Clark County School District not only struggles in the classroom but also when it comes to maintenance and cleanliness. According to a recent Las Vegas Sun article, the district this summer had a backlog of 12,937 work orders — three times more than a year before.

CCSD blames budget cuts that have reduced staff, and officials of the district's Facilities Division claim they need another 773 employees to do the job. But what government agency does not constantly claim that it is underfunded and understaffed?

Of CCSD's $3.7 billion education budget for 2009-2010, the Facilities Division will spend $210 million (page 87). It is responsible for school maintenance (repairmen), landscaping, energy conservation and operations (custodians). Across all of its subdivisions, CCSD Facilities spends $122 million annually, employing over 2,400 people — some seven full-time people for each school building in the district.

Is the division underfunded? Or are resources being misallocated? Given that the Facilities Division operates in a protected monopoly, without the need to satisfy independent customers, the most likely explanation is that the division is wasting money.

One district insider notes the division paid $170,000 — or 213 percent over a private company's bid — for landscaping at a district school. This kind of thing is common since schools don't select the providers of their service nor how much is paid — the central office makes all the decisions.

Not only is the Facilities Division wasteful, it is unresponsive as well. Principals say division people are routinely late in completing maintenance orders. On at least one occasion they were late by over a year, while in another case it was three years.

When principals need repairs at their schools, they must submit requests to the division. A facilities service representative (FSR) then determines if, how and when the problem will be fixed. Principals can't even use their schools' limited discretionary budgets to hire contractors without FSR approval. Through its control, the inefficient facilities monopoly inside the inefficient CCSD monopoly ensures Southern Nevada students, teachers and principals get no assistance unless Facilities gets a taste.

CCSD even employs several more bureaucrats in the division to make surprise visits to local schools, monitoring energy usage. Naturally, such micromanagement — as these monitors dictate when lights should be turned off or whether computers can remain on — annoys principals.

Like any monopoly, the Facilities Division treats requests for help as nuisances rather than opportunities for customer service. If the air conditioning doesn't work in some school on a hot summer's day, the Facilities Division still retains its monopoly. Bearing the brunt are the students and teachers in the classrooms — and the taxpayers who foot the bill.

Such problems could easily be rectified through privatization or competitive sourcing. Private-sector firms — which must provide quality service at reasonable prices to stay in business — regularly do more work, with a smaller staff, at a lower cost than government divisions.

In 1992, Union Public Schools in Tulsa, Okla., hired ServiceMaster to mow 300 acres of lawns. ServiceMaster agreed on a flat fee of $350,000 per year, saving the district $75,000. Before the private outsourcing, it took 10 government employees 14 days to complete the job. With ServiceMaster, the job was completed in five days using eight people.

According to the Mackinac Center for Public Policy, almost 45 percent of school districts in Michigan have privatized at least one support service — food, custodial or transportation. The Richmond Public district estimates it will save over $823,545, or about $435 per pupil. Dewitt Public expects to save $255,591, or $86 per pupil. Troy Public will save the most, with $2.7 million — about $220 per pupil — through privatizing custodial work.

One innovative way the Clark County School District could make such services competitive would be to divide most of the $210 million currently funding the Facilities Division among all CCSD schools. Principals could then either select the division or private firms to provide landscaping, maintenance or custodial services. Moving selection to the actual client school would generate providers competing to provide superior services at reasonable prices. The savings — used by principals — could then fund superior education in Southern Nevada classrooms.

The CCSD Facilities Division doesn't need more employees or a bigger budget. It needs to be reformed and placed under an entirely different set of incentives, ones much more friendly and accountable to consumers of the division's services.

The way to accomplish this is to introduce competitive sourcing of services.

Patrick R. Gibbons is an education policy analyst at the Nevada Policy Research Institute.

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