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Contents of this issue:
State officials investigate lottery privatization
Rackham Golf Course sale stalled
Royal Oak to sell golf course to balance budget
Buchanan Community Schools explores contracting
Ann Arbor schools looks to food service contracting
Brandywine district switches service providers
Monroe Public Schools votes against privatization possibility
Cedar Springs contracts for cleaning
Jackson PublicSchools Contracts for Substitute Teachers
Dowagiac Schools are investigating private custodial services
Mattawan Schools considering food privatization
Ypsilanti contemplates contract for busing
Bullock Creek employees agree to concessions to stave off contracting
State officials investigate lottery privatization
LANSING — Lawmakers recently discussed selling Michigan’s lottery to help resolve its projected budget deficit, according to the Michigan Information and Research Service.
The lottery is currently being used to supplement the School Aid Fund. Since the creation of the lottery, it has added almost $13 billion to schools, MIRS noted.
Illinois plans to lease its lottery for $10 billion, according to the Associated Press. Data from the Census Bureau shows that Michigan’s lottery provides 37 percent more proceeds than Illinois receives from its lottery.
There are logistical hurdles to selling the lottery, however. Proposal 1 of 2004 may require that a statewide vote be held if officials wanted to sell the asset, MIRS reported. Prop 1 dictates that the state cannot expand gambling without a statewide vote.
The idea was promoted in the winter 2003 Michigan Privatization Report.
Rackham Golf Course sale stalled
HUNTINGTON WOODS — The Detroit-owned Rackham golf course will be back on the auction block after an agreement with a potential buyer dissolved, according to The Detroit News.
Premium Golf LLC had offered to purchase the course for $6.25 million and promised an extra $5 million to the city if it could repeal a deed restriction that prevented the course from being developed into other uses, according to The News.
The city of Huntington Woods bid $6.25 million for the course.
Premium Golf pulled its bid before the sale was finalized and Detroit will look to receive new offers for the property, The News reported.
Royal Oak to sell golf course to balance budget
ROYAL OAK — City officials in Royal Oak are planning on selling one of its money-losing golf courses, according to the Oakland Press. The two courses combined have lost more than $500,000 since 2002, the Press reported, but the city is only considering selling Normandy Oaks Golf Course.
The city has received 17 bids from developers with bids ranging up to $18 million for the property, the Press reported.
The city has been trying to reconcile a string of general fund deficits. In the last year alone, the city’s financial report showed that its general fund revenues were about $1 million less than expenses.
Buchanan Community Schools explores contracting
BUCHANAN — After finishing its fiscal year with an amended $228,000 deficit, Buchanan Community Schools began soliciting bids for custodial and transportation services, according to the St. Joseph Herald-Palladium.
The district issued a request for proposals to provide these services. The district will stop accepting bids at the end of March. District officials will then review the bids and provide recommendations to the school board. A decision whether to accept a contract is estimated to occur in early May, according to district business manager Rick Bell.
"We cannot raise taxes locally to get more money, and we are required to have a balanced budget at the end of the school year. Funds must be spent wisely to prepare our children for their futures," school board members wrote in the Berrien County Record.
Recall petitions against board members have been circulated, the Herald-Palladium reported.
Ann Arbor schools looks to food service contracting
ANN ARBOR — The Ann Arbor Public Schools have issued a request for proposals to re-contract its food services, according to The Ann Arbor News. The district currently contract with Chartwells for the food service management.
The school board is also asking that companies bid for staffing the food service program. Currently, the district employs 76 workers to provide the service, The News reported.
School board president Karen Cross told The News, "Everything has to be on the table, at least for observation, and then we have to make wise decisions. Those decisions don’t always come down to just money."
The school board is facing an estimated general fund deficit of $11 million over the next two years, and has been providing food service at an average annual loss of $200,000, The News reported.
Food service programs are regulated by the United States Department of Agriculture and any profits cannot be transferred to a school’s general fund.
Brandywine district switches service providers
NILES — Brandywine schools in southwest Michigan has changed custodial companies, according to the Niles Daily Star.
The new firm, D.M. Burr, already performs services in two Flint-area districts, and has opened an office in South Bend, Ind., close to the district.
At the board’s request, the district agreed to increase the hourly wage of its workers by one dollar, according to the Daily Star. The district will also increase the amount of time that the buildings are serviced, the Daily Star reported.
"We’re hearing rave reviews from classroom teachers," director of business and finance Sue Furney told the Daily Star.
The agreement will still save the district $170,000 annually from its estimated in-house cost, according to Furney. The contract with D.M. Burr came within a few dollars of its previous contract.
Monroe Public Schools votes against privatization possibility
MONROE — Monroe Public Schools Board of Education voted 4-3 to deny the investigation of custodial service contracting, according to the Monroe Evening News.
Contracting with an outside vendor had been suggested as a way for the district to save money, the Evening News reported. The district already contracts for food services, according to the Mackinac Center’s 2006 school privatization survey.
The district is facing a projected deficit of $5 million for its next fiscal year. Officials are now looking into closing two or three schools, the Evening News reported.
Cedar Springs contracts for cleaning
CEDAR SPRINGS — The Cedar Springs Public Schools will save about $190,000 a year after voting to approve a competitive contract for its custodial services, according to the Rockford Advance.
The district is facing a $1.6 million deficit for the upcoming fiscal year, the Advance reported.
According to the Mackinac Center’s 2006 school privatization survey, the district already was contracting to clean its middle school.
The district’s custodians make between $10.94 and $18.13 per hour, according to information obtained by the Cedar Springs Post. Less than half of the districts 24 custodians live in the community and two-thirds have been employed by the district for seven years or less, the Post reported.
"The board is in a very difficult position," Superintendent Andrew Booth told the Rockford Advance. "We’ve got to cut something. Do we increase class sizes and cut teachers? The priority has to be the kids at this point."
Jackson Public Schools Contracts for Substitute Teachers
JACKSON — The Jackson Public Schools school board voted to use Professional Education Service Group to dispatch its substitutes, according to The Jackson Citizen Patriot. The move is expected to save the school district $163,000 annually.
The district currently employs around 300 substitute teachers, The Patriot reported.
Districts save money through substitute contracting because teachers employed by the private firm do not participate in the Michigan Public School Employee Retirement System and instead can contribute to a 401(k) plan.
Dowagiac Schools are investigating private custodial services
DOWAGIAC — The Dowagiac Union Schools are looking into privatizing its custodial services, the South Bend Tribune reported.
The district has received six bids to serve the district in response to its request for proposals, according to Hal Davis, assistant superintendent of business services. Savings of the bids range between 13 and 32 percent of the cost of the services.
The next step in the contracting process is checking the financial circumstances and the references for the bidders. "We don want to be in the business and then have to retract," Davis said.
The district currently contracts for food services, according to the Mackinac Center’s 2006 school privatization survey.
Mattawan Schools considering food privatization
MATTAWAN— The Mattawan Consolidated School District is considering food service privatization, according to The Kalamazoo Gazette. The district’s food manager plans to retire and the district is looking to replace her with a contracted manager.
The district has issued a request for proposals and are currently considering bids for food service management.
Superintendent James Weeldreyer told The Gazette that the advantages of using a food service contractor include greater buying power, more food marketing and the use of a company’s nutritionist.
Ypsilanti contemplates contract for busing
YPSILANTI — Ypsilanti Public Schools are considering a contract with Durham School Services to provide transportation for the district, according to The Ann Arbor News. The move could save the district $500,000 annually, The News reported.
Last year, the district explored privatizing and consolidating its transportation services with Willow Run and Lincoln school districts. However, the deal fell through after meeting stiff opposition in Willow Run and after an accelerated request-for-proposal schedule left vendors struggling to meet deadlines.
The district looked to privatization again this year to help resolve a projected $4.2 million deficit, The News reported.
Durham would purchase all of the district’s buses and replace a few of them under the contract, The News reported.
Bullock Creek employees agree to concessions to stave off contracting
MIDLAND — The Bullock Creek custodian’s union agreed to benefit concessions that will save the school district $60,000, according to the Midland Daily News. The school board was exploring the possibility of contracting for custodial services. The district also will offer retirement incentives that may save the district up to $150,000, the News reported.
Michigan Privatization Digest is a service of the Michigan Privatization Report, a twice-yearly publication of the Mackinac Center for Public Policy with a circulation of more than 22,000. The Mackinac Center for Public Policy is an independent, non-profit research institute located in Midland, Michigan.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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