Foodservice remains the most popular department to privatize among Michigan school districts, according to the Mackinac Center for Public Policy's annual privatization survey. The study gauges privatization among the state’s 551 districts in three areas: foodservice, custodial and transportation.
Privatization of foodservices increased by one net district (six privatized and five reverted to self operation) in the past year, with 162 districts (29.4%) now using an outside contractor to run their meals programs. Meanwhile, 111 districts (20.2%) contract for custodial service and 38 (6.9%) for transportation. Both of those areas are privatizing much faster than foodservice. Custodial contracting added 16 new districts in the past year and has more than doubled since 2005. Meanwhile, transportation contracting increased from 32 to 38 districts in just the past year, an increase of nearly 19%.
Overall, 246 Michigan districts (44.6%) contract with private companies for one or more of the three support services, up from 42.4% in 2008. The Mackinac Center has surveyed Michigan school districts since 2001, when only 31% of districts contracted out for one of the "big three" noninstructional services.
The reason for the increases: money. For example, Richmond Public Schools expects to save $823,545 by contracting out its custodial operations, while Dewitt Public Schools expects to save $255,591 this year. Benton Harbor Area Schools estimates it could save $2 million over the next five years by contracting out transportation (since districts are not mandated to provide transportation services, some other districts have simply stopped providing it to save money).
The district that saved the most from privatization the the past year was the Troy School District, which contracted out all three services and expects to save $3.8 million in the first year alone, with the largest savings come from custodial services, at $2.7 million. Troy also expects its foodservice provider to run its dining program at a surplus of $414,625. Under last year's in-house staff and management, the district spent $100,000 more than revenues when indirect costs were considered.