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Posted on Thu, Sep 20, 2012 : 6:58 a.m.

Lunchtime supervisors in Ann Arbor Public Schools likely to retain pay under privatization contract

By Amy Biolchini

Noon-hour supervisors could keep their pay rate but lose a state pension option as the work is privatized under a new contract with the single company that responded to Ann Arbor Public Schools’ request for proposals.

The Board of Education reviewed the proposal received for contracting the work on Wednesday during its regular meeting. Professional Contract Management Inc. (PCMI) is also the company the district uses for its athletics coaches.

If approved, the three-year contract would have a renewal option for two additional years and is projected to save the district $55,000, or 6 percent of its expenditures for the noon-hour supervisors.

The board voted to privatize the noon hour supervisor jobs in June because for each of the 250 to 300 non-union employees that work two hours a day supervising lunch and recess activities at schools in the district, the district pays into a state retirement fund for each of the employees, said Robert Allen, deputy superintendent for operations for the district.

Employees are only vested in the state pension system should they work 1,000 hours in a year with at least 10 years of service. For noon hour supervisors, they work a maximum of about 360 hours per year.

“You’re paying into a system for folks that will never see that benefit,” said Allen.

Most noon hour supervisors are parents who have gotten involved because their children attended at the school, Allen said. Most also have been working for the district about five to eight years, though the longest an employee has been there is 40 years, Allen said.

Under the new contract, employees would keep their same pay rate - about $10 to $14 per hour - and still be responsible for the same duties. They would still be under the authority of the principal in the school in which they work.

Trustee Simone Lightfoot asked Allen if there was a way for the district to recoup the costs from the state since that the district funded retirement contributions for employees that weren’t eligible - to which Allen responded that state legislation would be needed for the district to be reimbursed.

The district pays 24.37 percent of the gross wages in that retirement contribution, as well as an additional 7.5 percent for FICA.

PCMI would charge the district about 25.83 percent of gross wages for the employees - meaning if an employees is paid $10 an hour by PCMI, the company will charge the district a rate of $12.58 per hour for that employee.

Board of Education President Deb Mexicotte said she doesn’t understand why there isn’t a way for the district to circumvent the 25 percent markup.

“What is it that keeps us the 25.83 percent administrative fee, and keeps us from contracting separately with each of the noon supervisors?” Mexicotte said. “That 25 percent administrative cost is huge … I have trouble wrapping my mind around how we can’t do better than this, since almost nothing’s changing.”

Trustee Andy Thomas said the IRS’ definition of an independent contractor would not fit with the way the district would need to define the hours and schedule of the noon hour supervisors.

Mexicotte then offered a solution of classifying the noon hour supervisors as temporary employees, but Allen said that the district would still have to pay into the state retirement fund.

An implementation plan is being worked out between PCMI and the district. It's likely to be finalized before the end of 2012 should the Board of Education approve a contract, Allen said.

Employees will be notified of the switch and given the right of first refusal for the job, Allen said.

About 30 minutes of training would be required of the noon hour supervisors hired by PCMI.

The Board will have a second briefing on the contract and put it to a vote at its Oct. 10 meeting.

Amy Biolchini covers Washtenaw County, health and environmental issues for AnnArbor.com. Reach her at (734) 623-2552, amybiolchini@annarbor.com or on Twitter.

Comments

Carole

Fri, Sep 21, 2012 : 2:45 p.m.

Really, having served as a noon supervisors for over 17 years, I did not enter the job hoping I would be able to retire on what little I made. It was because it was a fun job working with the children, and provided a little spending dollars. I so very strongly oppose privatizing the noon hour folks -- most of those in place presently have been doing the job for some time, and are very well acquainted with what the job entails. There are administrators at the AAPS who should be taking care of any administrative costs which entail doing pay roll and the hiring forms. The principals at each of the schools does all the rest of the stuff -- which is to ensure that they have proper staff to provide a safe and secure lunch time for the children. This is definitely no savings.

gofigure

Thu, Sep 20, 2012 : 2:27 p.m.

They work the lunch 'hour' while school is in session - approx 280 days a year. So, 2 hours a day times 280. They work 560 hours a year and are eligible for a Pension. Seriously???

Dan Ezekiel

Thu, Sep 20, 2012 : 3:25 p.m.

For what it's worth, a few lunch supervisors are pension-eligible; I am one of them. In college, I was an AAPS lunch supervisor for several years, now I have been a teacher for 30 years. I gain a fraction of a year's credit on my pension for the years I was a lunch supervisor. Obviously, this doesn't apply to most lunch supervisors.

AMOC

Thu, Sep 20, 2012 : 2:42 p.m.

Gofigure - No. The school district is required to pay a percentage of the pay of all employees IN TO the pension fund, but employees are eligible to claim pensions on retirement only if they have worked 1000 hours / year or more over several (I believe it's at least 5) years. The school district wants to save that 26% contribution, since the noon-hour supervisors mostly can't ever claim the pension benefi=ts the district pays for on their behalf.

andys

Thu, Sep 20, 2012 : 2:38 p.m.

I don't think they work Saturdays and Sundays when the the kids are not there.

Macabre Sunset

Thu, Sep 20, 2012 : 2:37 p.m.

No. It's just badly written. Though school is more like 180 days a year. The point is that education in this state is so poorly administrated that we have to pay for the pension they're not receiving anyway. Sigh. And people wonder why we don't want to pay higher taxes for this.

LXIX

Thu, Sep 20, 2012 : 2:07 p.m.

If the $55k saved by PCMI is 6% then the Noon Hour Supervisor (NHS) program costs about $917k. PCMI gets $917k - $55k = $862k to manage the entire program including all of those same pay folk. If ALL the NHS are re-hired (AAPS is vague on the new staffing level requirement) and are paid the same (according to AAPS) then Mexicotte's whopping 25% overhead - 6% is the amount gained by PCMI or 19% of $917k = $175k. So, for $175k PCMI is going to hire and manage 300 NHS workers, do their weekly scheduling & sickday swaps for all schools, weekly payroll & taxes, security vetting costs, and train all 300 in emergency response (fire, tornado, kid allegies, food choking, seizures, anger management, wounds, broken bones, drowning etc. - the kids do play during lunchtime too), and any relevant public school policies/procedures - all within a single 1/2 hour session (ha, ha ha, sure). How about this thought Mexicotte - For every whopping $55,ooo dollars savings which puts all kids at corporate risk, you have also managed to rob the shakey Public School pension fund of the $230.000 every year paid on behalf of the NHS staff. They never see it but some teachers might need it. The very same fund that you might depend upon when you retire - soon.

LXIX

Fri, Sep 21, 2012 : 1:06 a.m.

Corporations are great organizations for making money, mein fuhrer. Profit corporations normally act to minimize any other value which costs their monetary value. School children are the human value put at risk of being minimized for the sake of PCM Incorporated monetary value. People are always free in this country to pay private corporations to educate their kids. Most have chosen not to. AMOC- Thankyou for the correction. It really didm't make any sense why an AAPS Board member would vote to cut their own pay or pension. But then why would the Teacher's bosses cut $230K out of the teacher's fund every year to save $55k? Corporate inability to do any real human "value" math? or just trying to fake accountability. out of a $188M budget,this $55k cut is not "worth" it value wise. UM Academics like Mexicotte et al should know that. Maybe someone else is working on their fund?

AMOC

Thu, Sep 20, 2012 : 2:45 p.m.

LXIX - School board members are not eligible for pensions from the Michigan teachers' retirement fund unless they also are or have been school district employees. Deb Mexicotte has worked for UM, but not a public school district.

GoNavy

Thu, Sep 20, 2012 : 2:10 p.m.

What does it mean to be "put at corporate risk," comrade?

Tony Livingston

Thu, Sep 20, 2012 : 12:32 p.m.

So instead of paying into the state retirement fund, we will be paying into the pocket of a private company.

andys

Thu, Sep 20, 2012 : 2:09 p.m.

"The district pays 24.37 percent of the gross wages in that retirement contribution, as well as an additional 7.5 percent for FICA." PCMI is charging a total of 25.83% of base wage, so employer FICA and Unemployment Tax have to come out of the 25.83%. There is a savings to the district. PCMI is only adding on about 15% for admin, seems reasonable to me.

dotdash

Thu, Sep 20, 2012 : 12:40 p.m.

Yes, that seems to be it. On the one hand, at least other Michigan workers will benefit from the retirement fund; on the other hand, the company will (presumably) earn the money and pay for overhead and administrative salaries.

Tom Todd

Thu, Sep 20, 2012 : 11:12 a.m.

is the life expectancy dropping in this state?

Basic Bob

Thu, Sep 20, 2012 : 5:53 p.m.

This is not the obesity story.