Expensive Janitorial Contract Forces Cuts

Ortonville-Brandon school board guaranteed 90 percent of $17K health insurance with union despite economic uncertainties

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Editor's note: A previous version of this story reported that Ortonville-Brandon custodians and maintenance workers paid none of their health care costs for the new contract. They  were paying 0 percent for the first year of the contract (2009-10) and began paying 10 percent starting in the 2011-12 school year. The story has been corrected.

While the state of Michigan was facing a $1.5 billion deficit in 2009, the Ortonville-Brandon Public School Board of Education signed a four-year deal with its custodians and maintenance people that would pay for 90 percent of their health care premiums.

The family plan for the luxurious MESSA health plan cost $17,171 in 2010 or about $2,000 less than what it could have cost the district to pay the salary of a new custodian.

The four-year contract meant that Gov. Rick Snyder's education reform law that says public employees have to pay 20 percent of their health care premium couldn't be imposed until after the contract expires in 2013.

The plan, however, became too expensive, and this week the district announced that it was privatizing its custodians.

That announcement triggered a student protest.

In a press release, Superintendent Lorraine McMahon said subcontracting custodian services would save the district $250,000 a year.

Michael Van Beek, education policy director at the Mackinac Center for Public Policy, questioned how a district could promise such luxurious benefits at a time the state’s economic woes were so well publicized.

"I'd like to see the projections the school district was looking at that led them to believe they could continue to pay 90 percent of the health insurance for its custodians for four years, after being in the midst of the Great Recession," Van Beek said. "They made a big mistake in 2009 by promising this level of compensation for four years. Now, they are realizing this mistake by really reducing their cost by privatizing or hiring new employees at $7 less per hour because it is an unsustainable model."

The original agreement had custodians making $17.35 an hour in 2009-10 after the first year, or roughly a $36,000 annual salary. That’s in line with other public school districts in the state, according to documents received in a Freedom of Information Act request.

However, after that first year, custodians would have their salaries slashed by 7.6 percent to $16.03 an hour. But even more interesting was that any new custodians hired after July 1, 2010 would start at $9.50 an hour — a 45 percent reduction from the starting salary in 2009-10.

School and union officials didn’t respond to requests for comments. However, the Oakland Press quoted custodian Doug Grubbs as saying the contracted custodians would make between $8.40 and $9 an hour.

Van Beek said that because the district can now get rid of the MESSA insurance plan, Ortonville-Brandon may be able to save money and still have more custodians.

McMahon didn't respond to an email seeking comment. 

Teamsters Local 214 Steward Randy Carpenter didn’t respond to a message left on his voice mail. Information from the story was taken from the union contract and an analysis of documents posted on the school district’s website.

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See also:

A Tale of Two Districts: Responding To Severe Fiscal Problems

School Union Denounces "Dangerous Trend" Toward Private Food, Busing and Janitors

West Bloomfield Tackles Costs With Aggressive Privatization Strategy

Private Contractors Pilloried at School Union Rally