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Ohio Association of Public School Employees AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL

EMPLOYEES/AFL-CIO

Cleveland/Canton Field Office

3380 Brecksville Road, Richfield Ohio 44286

(330) 659- 7335 Joseph P. Rugola

(855) 607-6554 Executive Director

OAPSE OHIO ASSOCIATION OF PUBLIC SCHOOL

EMPLOYEES

In light of Madison Local School District’s issuance of a request for qualifications (RFQ) for

student transportation services, RFQ number 2014-001, the Ohio Association of Public School

Employees (OAPSE/AFSCME Local 4) hereby submits its proposal for the Madison Local

School District to directly operate student transportation in cooperation with the Ohio

Association of Public School Employees and its members, for financial savings and an

improvement in service.

In the years since the current contractor, Community Bus Service, has taken over student

transportation, annual costs have increased on a regular basis even as the number of students and

bus routes decreased from when OAPSE members last provided the service in 2008. This

proposal shows that the school district can save nearly $240,000 annually by returning the work

in-house. What’s more, by creating secure, living-wage jobs in the community, the school

district will be able to attract and retain quality, long-term employees. This results in a superior

transportation service and stands in sharp contrast to the high turnover and churn of unfamiliar

faces under the current, contracted service.

As noted above, this is a proposal for the Madison Local School District to return to direct

operation of student transportation service and not a statement of qualifications from a

respondent company offering to provide the service for a fee. As such, the respondent

requirements listed under the RFQ, including a license to operate a school bus service and proof

of insurability, do not apply at a corporate level. Of course, all personnel employed by the school

district to operate student transportation will meet state and federal legal requirements as well as

the district’s own standards.

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Returning student transportation service to Madison Local School District offers a genuine

opportunity to save the school district money, improve transportation services to our kids and

families, and create good jobs in our community. OAPSE stands ready to work cooperatively

with the district to make this a reality.

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Madison Local School District Student Transportation Insourcing Proposal

OAPSE / AFSCME Local 4 October 10, 2014

OAPSE proposes to return Madison Local School District student transportation to district-operated

service in the 2015-16 school year to save the school district nearly $240,000 per year. This proposal

details all aspects of returning student transportation service to district operation, including:

Staffing the operation to cover all current bus routes;

Paying drivers and assistants at current collectively bargained levels;

Employing a supervisor and secretary for administrative duties;

Providing substitute driver hours;

Providing full benefits to all bargaining unit and non-bargaining unit regular employees; and

Accounting for other costs associated with district operation.

Just as important, returning to in-house drivers and assistants will provide Madison students and

families with better service by attracting and retaining quality, long-term employees through better

compensation and by reducing turnover.

Routes and Staffing The school district currently operates 31 bus routes, which includes four special-education routes.1 This

requires 31 drivers and four bus assistants for special-education students. (Substitute driver hours are

included in “Wages and Hours,” below.)

In addition to the published routes above, certain students are provided transportation on an individual

basis. District records indicate that in the 2013-14 school year, the school district contracted with Re-Ed

Transportation for individual services for four students, at an aggregate full school year cost of $40,548.

The district indicates it also has contracted with Elite Fleet for individual services for up to two students.

These costs are excluded from both the union’s proposal and the cost of CBS’s contract.

Wages and Hours OAPSE proposes to use the wage schedule in the Local 238 collective bargaining agreement to set driver

and assistant wages. This proposal assumes that three-quarters of drivers and assistants will come in at

the entry rates of $16.30 per hour for drivers and $10.25 for assistants, and one-quarter will be paid at

the step closest to the midpoints of $19.99 and $13.04 per hour, respectively. Under this assumption,

weighted average wages are $17.22 per hour for drivers and $10.95 per hour for assistants.

1 Madison Local School District, “RFQ Information Session Questions and Answers Submitted by October 6, 2014.”

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Substitute driver hours are assumed to total five percent of driver hours, the same as in school year

2007-08.2 For the purposes of this proposal, substitute drivers’ hourly wages are assumed to be equal to

regular driver wages.

The number of daily hours is based on the 2007-08 school year, when drivers worked an average of 6.28

hours per day and assistants worked an average of 5.55 hours per day. There are 186 work days in the

school year. Table 1, below, shows individual and total payroll for drivers, assistants and substitutes

based on the number of employees, wages, hours and days. Total annual payroll will be $623,163 for 31

drivers, $45,213 for four bus assistants and $31,158 for substitute driver hours.

Table 1. Driver and Assistant Hours and Wages

Drivers Assistants Substitutes

Employees 31 4

Daily Hours 6.28 5.55

Work Days 186 186

Total Annual Hours 36,182 4,129 1,809

Average Wage $17.22 $10.95 $17.22

Annual Payroll 623,163 45,213 31,158

Supervisor and Secretary Salaries This proposal provides one supervisor and a secretary to manage the administrative needs of insourced

student transportation. When the school district last performed this service in-house, in 2007-08, it paid

approximately $45,000 for a supervisor and $19,118 for a secretary. Adjusting these figures for inflation,

as shown in Table 2, below, results in an estimated $50,500 salary for a supervisor and $21,250 for a

secretary.

Table 2. Supervisor and Secretary Salaries Adjusted for Inflation

2007-08 Salary

Inflation 2008-2015

Inflation-Adjusted Salary

2015-16 Salary Estimate

Supervisor $45,306 11.1% $50,335 $50,500

Secretary 19,118 11.1% 21,240 21,250

Sources: Madison T-2 Reports; U.S. Bureau of Labor Statistics; Moody’s Analytics.

Benefits and Total Compensation Medical benefit and payroll-based required payment costs are shown in Table 3, on the next page, and

consist of the following:

Medical benefits cost an average of $10,391 per employee when coverage options are taken

into account. In the current fiscal year, Plan B family coverage costs the employer $13,593,

2 Madison Local School District T-2 Transportation Cost Analysis Report, Fiscal Year 2007-2008.

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single coverage costs $5,343 and employees waiving coverage receive a $1,250 stipend. In 2007-

08, 72 percent of transportation employees chose family coverage, 6 percent chose single

coverage and 22 percent waived coverage. Applying these same coverage selection percentages

produces this weighted average cost per employee;

Life insurance costs $3.60 per employee per month;

Medicare is 1.45 percent of payroll;

The SERS employer contribution is 14 percent of payroll;

The SERS surcharge is 14 percent of the difference between an employee’s annual pay and the

SERS minimum of $20,450 (see additional detail below in Table 4); and

Workers’ Compensation is 1.5 percent of payroll.

Table 3. Benefit Costs

Drivers Assistants Substitutes Supervisor Secretary Total

Total Payroll $623,163 $45,213 $31,158 $50,500 $21,250 $771,284

Medical Benefits 322,136 41,566 0 10,391 10,391 384,485

Life Insurance 1,339 173 0 43 43 1,598

Medicare 9,036 656 452 732 308 11,184

SERS Employer Contribution 87,243 6,330 4,362 7,070 2,975 107,980

SERS Surcharge 1,510 5,122 1,454 0 0 8,086

Workers' Compensation 9,347 678 467 758 319 11,569

Total Compensation 1,053,775 99,737 37,894 69,494 35,287 1,296,187

SERS imposes a surcharge on employers for lower-paid members. The surcharge is 14 percent of the

difference between the member’s annual pay and the minimum threshold of $20,450. Madison Local

School District will pay significantly less in SERS surcharges than CBS, because district drivers and

assistants on average will earn salaries closer to the SERS minimum. As shown in Table 4, below, this

proposal estimates the school district will pay a surcharge of $1,510 for all drivers, $5,122 for all

assistants and $1,454 for substitute driver salaries (prorated for an estimated 60 work days). This

produces a total SERS surcharge of $8,086.

Table 4. SERS Surcharge Calculation

Drivers Assistants Substitutes Total

Employees 31 4

Annual Payroll $623,163 $45,213 $31,158

Average Annual Pay 20,102 11,303

SERS Surcharge threshold 20,450 20,450

Pay below SERS Surcharge threshold 348 9,147 31,158

14% of payroll below threshold 49 1,281 4,362

Subtotal 1,510 5,122 4,362

Substitutes prorated 60 of 180 days

33%

Total Surcharge 1,510 5,122 1,454 $8,086

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Other Costs The school district would be responsible for certain costs under insourced bus service. These include:

Criminal background checks, which are required once every six years. The cost of a complete

state and federal criminal records check is $65.3 The maximum cost Madison Local School

District could incur if all 38 new staff required a new background check would be $2,405.

Pre-employment, probable cause and random drug testing of employees. The typical cost of a

drug screening test is $30.4 One test for each of 38 employees would cost $1,110.

Bus parts. Based on the records provided by the district, the average annual cost of bus

purchases in the last five years is $57,522.

Office and restroom trailers are currently provided by CBS with all operating costs borne by the

district. Sample prices for used trailers of these types was obtained from online auctions,

providing a total cost of $13,000.

Offsetting these additional costs are savings the school district would gain from insourcing field trip and

special trip duties. CBS charges $34.96 per hour for field trips. The hourly cost of a district driver would

average $25.17, or $9.79 less than CBS’s hourly rate.5 The district uses approximately 2,800 hour of field

trip and special trip time (equal to the FY 2011 total and proportional to the 920 hours of field trip time

charged in the first three months of FY 2014). This generates $27,402 in savings on field trips and special

trips. Each of these other costs and the offsetting savings is shown in Table 5, below.

Table 5. Other Costs and Offsetting Savings

Item Amount

Background Checks $2,405

Drug Tests 1,110

Bus Parts 57,522

Trailers 13,000

Field Trip Savings -27,402

Total Other Costs (Net of Field Trip Savings) 46,635

Additional costs related to operating bus service have continued to be borne by the school district under

the contract with CBS and would continue under district operation, including buses, fuel, operating

3 Lake County Educational Service Center, “FBI/BCI Information,”

http://www.lcesc.k12.oh.us/public/ESC/personnel_fingerprinting.cfm. 4 Society for Human Resource Management, as reported in “Think The Cost of Drug Testing is Too High? Think

Again,” HireRight (blog), February 6, 2012, http://www.hireright.com/blog/2012/02/think-the-cost-of-pre-employment-drug-testing-is-too-high-think-again/. 5 The cost of a regular hour of driver time is $20.14, consisting of the $17.22 average salary and adding Medicaid,

SERS and Workers’ Compensation payroll-based costs. For purposes of this proposal, we assume half of the driver hourly cost would be paid at the regular rate and half at the 1.5-times overtime rate, producing an average hourly cost of $25.17.

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facilities, insurance and utilities, mechanics and related vehicle maintenance supplies.6 Therefore these

costs are not included in this comparison.

Total Cost Vs. CBS Contract Combining payroll, benefits and other costs, this proposal estimates a total district cost of $1,342,822

per year to operate student transportation service. The school district’s 2014-15 contract with CBS costs

$1,582,575. The district can therefore save $239,753 by insourcing student transportation.

6 Bus insurance is not included as an additional cost of insourcing because records provided by the school district

indicate the district has maintained bus property insurance and auto liability insurance covering school buses in the years since student transportation service was outsourced with CBS.