North Little Rock school outsourcing dims as path

Cost cuts needed, but board cools to bus, services option

The possible outsourcing of bus transportation, custodial work and other support services is losing support among members of the North Little Rock School Board, which is looking for ways to cut millions in district expenses.

At a work session Thursday in the North Little Rock High School's new auditorium, board members asked their financial adviser about removing items -- including privatized support services -- from a working list of proposed cost-saving measures for the 2017-18 school year.

Scott Beardsley, senior vice president of First Security Beardsley Public Finance, said the district could draw money from its construction fund in each of four or more years to minimize the need for operating budget cuts. Drawing from the construction fund, however, could delay district plans to extensively renovate North Little Rock Middle School, which is the final piece of the district's multiyear, $266.5 million school-building and -renovation program. The current middle school is made up of the former Northeast High and Lakewood Middle school campuses.

The 9,000-student district is considering budget cuts for next school year to offset the loss of $7.6 million a year in state desegregation aid that will end after the 2017-18 school year.

Absorbing the loss of the special desegregation aid is particularly difficult because the district is already financially stretched by its capital improvement program, which is financed in part by about $8 million that would otherwise go to the operating costs.

[EMAIL UPDATES: Get free breaking news alerts, daily newsletters with top headlines delivered to your inbox]

District leaders proposed earlier this school year that outsourcing of support services be explored as a way to save an estimated $1.5 million.

To that end, district administrators are drafting requests for proposals from private companies for school bus transportation as well as for custodial, maintenance, child nutrition, technology, accounting and lawn services. Currently, district employees do that support work, and outsourcing those jobs would put an end to their district employment and benefits.

North Little Rock School Board member Dorothy Williams said she has repeatedly asked the district staff for the pros and cons of outsourcing services but has not received those.

Beardsley said the advantages and disadvantages can't be accurately determined until companies actually submit proposals for the cost of doing the work.

Williams said that "outsourcing is off the table for me."

Different board members also said Thursday that they are reluctant to cut longevity pay and unused sick-leave pay that is distributed to eligible employees when they resign or retire from the district, which is an estimated cost of $450,000 a year. Board members also balked at cutting employee holiday pay at a savings of $71,000 and cutting the International Baccalaureate high school academic program at a savings of $37,282.

Beardsley said preserving those budget items, combined with anticipated yearly employee raises for experience and education, could result in the district drawing $930,000 a year from its construction fund for the North Little Rock Middle School. That would take the fund from $14 million to about $8.8 million in four years, he said.

Unlike drawing from operating fund reserves, drawing down the construction fund will not put the district in jeopardy of being labeled by the state as fiscally distressed, Beardsley said.

School Board President Darrell Montgomery cautioned against outsourcing district jobs to support construction, saying that the district is more likely to come out on top when it favors its people.

Board member Sandi Campbell said the community was promised a renovated middle school. She also asked that Karli Saracini, the district's director of human resources, put together some options for minimizing the effect of budget cuts on employees.

Board member Tracy Steele said he wanted a breakdown of the proposed cuts to know how the potential savings are generated. He also noted that some significant work has been done on the middle school.

Board member Scott Teague said that the state's rejection of the district's application for middle-school construction funding was a game-changer."

Teague said he would like to "pump the brakes" on all but essential middle school construction until the district "can grow our revenue" and even reapply to the state for building money.

The School Board, which approved a $2.2 million expenditure for roofing projects at the middle school and at North Little Rock Academy, will hold its regular monthly meeting this month on Feb. 28. That date change was necessary to accommodate a local chamber of commerce banquet on the board's regular Feb. 16 meeting night.

Metro on 02/03/2017

Upcoming Events