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Michigan’s school districts have saved money by turning to the private-sector to provide support services. This 2013 survey shows that 65.5 percent of districts now contract out food, custodial or transportation services to private-sector vendors. This is an increase from 31.0 percent in 2001. The survey covers the three services, satisfaction and insourcing among Michigan’s public school districts and has been performed in 2001, 2003, and annually since 2005.
Many of Michigan’s public school districts are under substantial fiscal pressures from a combination of declining enrollment and increasing costs, particularly related to employee benefits. But most districts are responding to these challenges. One of the ways that districts can stretch their resources further is through competitive contracting for support services. Indeed, this 2013 survey of school districts shows that two-thirds of Michigan school districts contract out to private companies at least one of the three noninstructional services nearly all districts finance — food, custodial and transportation services.
In 2013, 65.5 percent of districts contracted out at least one of these three support services. This is up from 60.7 percent in 2012. In 2001, the first year we started surveying districts, only 31 percent of school districts contracted out one of these services.
Transportation contracting, the least frequently of these services to be contracted out, is increasing rapidly. The proportion of districts using private companies to provide transportation services increased from 16.4 percent to 20.9 percent from 2012 to 2013. Thirty districts began new contracts for transportation services in 2013. In 2008, only 6 percent of districts contracted out the service.
Custodial services are the most frequently contracted service, with 45.5 percent of districts using private contractors in 2013. This is an increase from 39.2 percent in 2012. These figures have grown steadily since 2003 when just 6.6 percent of districts used private contractors to clean and maintain district buildings.
Food service contracting is not growing as quickly as the other two services, but remains quite common. In 2013, 21 districts began new contracts for these services. The rates increased slightly, from 34.6 percent in 2012 to 36.5 percent in 2013.
Similar surveys were performed in 2001 and 2003, and have been done annually since 2005.
The Mackinac Center calls every public school district to find out whether it contract out for food, custodial or transportation services. If requested, the survey can be completed via email, fax or through a Freedom of Information Act request.
This survey was conducted between May 28 and Nov. 12, 2013.
Districts are considered as having contracted out services if they use a private vendor for any part of their regular and routine food, custodial or transportation services. Thus, for instance, hiring a contractor to refinish school gymnasium floors would not be considered contracting out for custodial services as this is for a specialized service provided to the district. Likewise, some schools use contractors to provide substitute employees for certain services — this also is not consider contracting out a service per this survey.
Using an employee-leasing service, where districts hire private companies that provide the district with employees, is considered contracting, since a private sector employer provides employees performing regular and routine services. Districts that use a private food service manager are considered to contract out food services even when the district still employs some of its own food service workers.
There have been some changes to the composition of Michigan school districts since we conducted our 2012 survey. Inkster Public Schools and the Buena Vista School District have been dissolved, and students living in those former districts have been assigned to attend neighboring districts. Ypsilanti Public Schools and Willow Run Public Schools also merged into a single district.
Graphic 1: Outsourcing by Michigan School Districts
* Data were not collected for the years 2002 and 2004.
As Graphic 1 shows, the portion of districts privatizating at least one of these three noninstructional services increased from 31 percent in 2001 to 65.5 percent in 2013, a 111 percent increase.
Graphic 2: Districts Contracting Food Service
* Data were not collected in 2004.
Graphic 3: Districts New to Food Service Contracting
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Atherton Community Schools |
Maple Valley Schools |
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Bellaire Public Schools |
Mason County Eastern Schools |
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Carsonville-Port Sanilac Schools |
Montrose Community Schools |
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Cass City Public Schools |
Pewamo-Westphalia Community Schools |
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Cassopolis Public Schools |
Port Hope Community Schools |
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Chippewa Valley Schools |
Riverview Community Schools |
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Forest Area Community Schools |
Saranac Community Schools |
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Fowler Public Schools |
Tekonsha Community Schools |
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Freeland Community Schools |
Vanderbilt Area Schools |
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Fruitport Community Schools |
White Pigeon Community Schools |
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Holt Public Schools |
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School districts that participate in the National School Lunch Program have their operations highly regulated. The food service programs are supposed to be self-sustaining and any surplus from the food program cannot be spent on general school operations.
Because of these regulations, private providers of this service tend to be larger, nationwide firms. Chartwells is perhaps the largest school support service contractor in the state, but Sodexo, Aramark and Taher also provide schools food service.
Of the districts that began food service contracts in 2013, nine were with one of these four firms. Ten of the districts new to contracting were employee-leasing arrangements.
Vanderbilt Area Schools and Port Hope Community Schools began using local vendors for food services in 2013.
Custodial service is the most frequently contracted service. It has grown from 6.6 percent of school districts in 2003 to 45.5 percent of school districts in 2013.
Graphic 4: Districts Contracting Custodial Service
* Data were not collected in 2004.
Graphic 5: Districts New to Custodial Service Contracting
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Beaver Island Community School |
Montrose Community Schools |
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Bellevue Community Schools |
Orchard View Schools |
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Carsonville-Port Sanilac Schools |
Peck Community Schools |
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Charlotte Public Schools |
Pine River Area Schools |
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Chippewa Valley Schools |
Pontiac School District |
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Clio Area Schools |
Redford Union Schools |
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East Detroit Public Schools |
Rochester Community Schools |
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Erie-Mason Consolidated Schools |
Roscommon Area Public Schools |
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Flint Community Schools |
Saranac Community Schools |
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Galesburg-Augusta Community Schools |
Springport Public Schools |
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Genesee School District |
Sturgis Public Schools |
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Godwin Heights Public Schools |
Tahquamenon Area Schools |
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Hagar Township School District 6 |
Tekonsha Community Schools |
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Johannesburg-Lewiston Schools |
Tri County Area Schools |
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Kingsley Area Schools |
Van Dyke Public Schools |
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Lake Fenton Community Schools |
Westwood Heights Schools |
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Lincoln Park Public Schools |
Whitefish Township Community School |
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Mason County Eastern Schools |
Whiteford Agricultural Schools |
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Memphis Community Schools |
Whitmore Lake Public Schools |
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Monroe Public Schools |
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There was both an increase in full-service custodial contracting and employee–leasing contracting in 2013. Of the 39 districts that began contracting out these services, 10 were with employee-leasing agencies and the others were with full-service contractors. Some districts chose to contract out these services through attrition, whereby they gradually replace employees who terminate their employment with new contracted, private employees.
Graphic 6: Districts Contracting Transportation Service
* Data were not collected in 2004.
Graphic 7: Districts New to Transportation Service Contracting
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Addison Community Schools |
Monroe Public Schools |
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Airport Community Schools |
Montrose Community Schools |
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Buckley Community Schools |
Perry Public Schools |
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Clintondale Community Schools |
Portland Public Schools |
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East Lansing Public Schools |
Rapid River Public Schools |
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Flint Community Schools |
Redford Union Schools |
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Frankenmuth School District |
Richmond Community Schools |
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Frankfort-Elberta Area Schools |
Riverview Community Schools |
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Galesburg-Augusta Community Schools |
Rochester Community Schools |
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Godwin Heights Public Schools |
Saranac Community Schools |
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Goodrich Area Schools |
Trenton Public Schools |
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Grosse Pointe Public Schools |
Van Dyke Public Schools |
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Kenowa Hills Public Schools |
Walled Lake Consolidated Schools |
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Lake City Area Schools |
Whitefish Township Community School |
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Mason County Eastern Schools |
Wyandotte Public Schools |
Transportation is the least frequently contracted service. The rate of contracting is rapidly growing, however. There was only slight growth in the number of districts that contracted out for these services from 2003 to 2009, but a substantial increase since then — nearly a tripling in the number of districts.
A total of 15 districts ended their contracts with private-providers for either food, custodial or transportation services and brought those services back in-house in 2013.
Graphic 8: Districts That Brought Services Back In-house
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District |
Noninstructional Service |
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Bloomingdale Public Schools |
Food, Custodial |
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Bridgman Public School District |
Food |
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Capac Community Schools |
Transportation |
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Coloma Community Schools |
Custodial |
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Constantine Public Schools |
Custodial |
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Glenn Public Schools |
Food |
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Grand Ledge Public Schools |
Transportation |
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Hemlock Public Schools |
Food |
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Houghton Lake Community Schools |
Transportation |
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Mayville Community Schools |
Food |
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Potterville Public Schools |
Food |
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Richmond Community Schools |
Food |
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Swartz Creek Community Schools |
Food |
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Ubly Community Schools |
Food, Custodial, Transportation |
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White Pigeon Community Schools |
Transportation |
Bridgman contracted through an employee-leasing agency to hire new employees in its food services and ended this arrangement.
Capac had been contracting for a transportation director and now shares a director with another district instead.
Constantine Public Schools reported being dissatisfied with its custodial service contractor and brought the service back in-house.
The Glenn school district had bought a hot meal for its students once a month from a local restaurant. It stopped purchasing these meals in 2013.
Houghton Lake Community Schools had been using a leased transportation director and now uses an in-house employee.
The Richmond district had used a leased food service director and this position is now in-house.
Swartz Creek had used a contracted food service manager but now shares a manager with the Durand school district.
Ubly Community Schools had been dissatisfied with its employee-leasing agency and the positions for food, custodial and transportation services are now all done in-house.
White Pigeon Community Schools had leased a transportation manager and now shares one with Centerville Public Schools.
Satisfaction remains high among districts that contract out for services, with districts reporting a satisfaction rate of 93 percent — the highest recorded level in all of our surveys. Two percent of districts reported being unsure about their satisfaction with their contracted services (some of these contracts had just begun), and another 2 percent did not respond to this question. Just over 3 percent reported being dissatisfied with their contracted service provision.
Graphic 9: Satisfaction From Outsourcing
Graphic 10: Satisfaction Over The Years
Since districts can end their contracts with private providers and bring services back in-house, it only makes sense that there is a high level of satisfaction with their decision to contract out.
Some districts provided information about their contracts with private providers of food, custodial and transportation services that require us to make some corrections to the way these districts’ responses were categorized in previous publications. These are listed below.
