Lunchtime supervisors in Ann Arbor Public Schools likely to retain pay under privatization contract

The Board of Education reviewed the proposal received for contracting the work on Wednesday during its regular meeting. Professional Contract Management Inc. (PCMI) is also the company the district uses for its athletics coaches.

If approved, the three-year contract would have a renewal option for two additional years and is projected to save the district $55,000, or 6 percent of its expenditures for the noon-hour supervisors.

The board voted to privatize the noon hour supervisor jobs in June because for each of the 250 to 300 non-union employees that work two hours a day supervising lunch and recess activities at schools in the district, the district pays into a state retirement fund for each of the employees, said Robert Allen, deputy superintendent for operations for the district.

Employees are only vested in the state pension system should they work 1,000 hours in a year with at least 10 years of service. For noon hour supervisors, they work a maximum of about 360 hours per year.

“You’re paying into a system for folks that will never see that benefit,” said Allen.

Most noon hour supervisors are parents who have gotten involved because their children attended at the school, Allen said. Most also have been working for the district about five to eight years, though the longest an employee has been there is 40 years, Allen said.

Under the new contract, employees would keep their same pay rate - about $10 to $14 per hour - and still be responsible for the same duties. They would still be under the authority of the principal in the school in which they work.

Trustee Simone Lightfoot asked Allen if there was a way for the district to recoup the costs from the state since that the district funded retirement contributions for employees that weren’t eligible - to which Allen responded that state legislation would be needed for the district to be reimbursed.

The district pays 24.37 percent of the gross wages in that retirement contribution, as well as an additional 7.5 percent for FICA.

PCMI would charge the district about 25.83 percent of gross wages for the employees - meaning if an employees is paid $10 an hour by PCMI, the company will charge the district a rate of $12.58 per hour for that employee.

Board of Education President Deb Mexicotte said she doesn’t understand why there isn’t a way for the district to circumvent the 25 percent markup.

“What is it that keeps us the 25.83 percent administrative fee, and keeps us from contracting separately with each of the noon supervisors?” Mexicotte said. “That 25 percent administrative cost is huge … I have trouble wrapping my mind around how we can’t do better than this, since almost nothing’s changing.”

Trustee Andy Thomas said the IRS’ definition of an independent contractor would not fit with the way the district would need to define the hours and schedule of the noon hour supervisors.

Mexicotte then offered a solution of classifying the noon hour supervisors as temporary employees, but Allen said that the district would still have to pay into the state retirement fund.

An implementation plan is being worked out between PCMI and the district. It's likely to be finalized before the end of 2012 should the Board of Education approve a contract, Allen said.

Employees will be notified of the switch and given the right of first refusal for the job, Allen said.

About 30 minutes of training would be required of the noon hour supervisors hired by PCMI.

The Board will have a second briefing on the contract and put it to a vote at its Oct. 10 meeting.