District 15 Outsource Sales Pitch Falls Flat

On Wednesday the District 15 Board of Education, and Board President Tim Millar, put on their slickest public dog and pony show, designed to wow residents and drive home the case for outsourcing transportation services. Sales pitchmen from Durham, the one private company still under consideration, talked up their company, and the district’s outsourcing guru Michael Adamczyk paraded a finely honed PowerPoint presentation.

The overall effect was imposing. But as the evening progressed the razzle-dazzle dimmed considerably under pointed questioning from board members. Manjula Sriram in particular, although not necessarily considered friendly to the union in the past, cut through the smoke with some withering questions. Residents and several union members, at roughly five minutes each, also took the opportunity to respond. If you blinked you might have missed it. But in those brief remarks, DTU president Carin Ulrich and others delivered crippling blows to the district’s position.

Durham intended to prove itself on three grounds: cost, safety, and resources. The local in-house drivers’ union (the District 15 Transportation Union, or DTU) answered effectively in each area. In the end Durham’s pitch, as such shills go, was not very effective.

The financial analysis presented by Adamczyk was, as has become the pattern, resoundingly debunked by the union. Several glaring errors in the numbers themselves came to light. First, the overall district numbers changed, yet again, and they were shown not to be internally consistent. For one thing, some double accounting became apparent as a number of salaried employees were counted being paid two times over the same time period. In fact, these employees were only paid once – the numbers were wrong.

Even more embarrassing for the district was their miscalculation of escalating cost projections. The district’s numbers seemed to show large increasing annual costs of the in-house drivers. Eliminating these costs through outsourcing, they claimed, would result in escalating savings each year. However, the union pointed out that only the drivers, two dispatchers, and about 20 aides will actually be outsourced. The district was including rising costs for buses, garage, mechanics, administrators and every other aspect of the program. Since all of these other departmental costs will be retained the effect was - the district’s projected savings were greatly inflated.

Finally, it was shown that the budget attributed to the in-house program was itself inaccurate. The program has come under budget consistently over the years, with actual surpluses of about $744,000 over the last two years. So in calculating what the district actually pays, the cost of the in-house transportation program is much lower than the district claims.

Of course, the pivotal cost issue remains whether the state can legally reimburse the district for Durham’s exorbitant management fees. Durham is a private company from Warrenville – whose parent company is in the UK. The district believes they can wiz this through because of questionable legal advice they’ve received.

The actual basis for this belief is that the illegality of the practice has yet to be tested in the courts. The district might even have believed that the local DTU did not have the legal resources to contest the reimbursement. In fact the DTU falls under the umbrella of the larger IEA, which has significantly more legal firepower. The union reiterated their resolve to litigate the district’s reimbursement claims as far as necessary. In the end the union will win that point. The law itself is very clear. In fact, once the letter of the law has been verified, Durham might be vulnerable in other Illinois districts where they currently have a foothold.

Probably sensing imminent defeat on the issue of cost – D15 BOE President Tim Millar has recently shifted his argument. Now, he says the real issue is safety. Of course – that has been the union’s position all along.

Here are the actual numbers comparing local union’s safety record to Durham’s:

District 15 Drivers:
  - 15 accidents between Jan-1 2012 and Mar-19 2013, or about .79 accidents every million miles
  - 50 injuries in over 6 years, 90,000,000 miles, or 0.56 injuries every million miles.
  - Zero student injuries requiring overnight hospitalization
  - Zero fatalities, ever in the district’s 67 year history. Well over 500 million miles.
  - 13 years average experience, all in District 15
  - Awarded “Best Fleet in America” (Bus Fleet Magazine 2001)
  - Received Malcolm Baldrige National Quality Award (2003)

 
Durham (over the last 24 months, just over 200,000,000 miles in Illinois):
  - 276 accidents, or about 1.4 accidents every million miles (almost twice as many)
  - 182 injuries, or .91 injuries every million miles (almost twice as many)
  - ? injured students hospitalized overnight – unknown
  - 3 fatalities in the last 24 months.
  - 3 years average experience
  - 100% turnover every 3 years

In the last 90 day alone, in Illinois, Durham has had two major accidents within 25 miles of Palatine. In those accidents there have been 47 children injured badly enough to require emergency room care. These injuries included skull fractures and broken bones. In the most recent major accident the bus flipped on its side. One motorist was killed.

DTU is safer in basic categories such as minor accidents with Durham showing roughly twice as many accidents per mile as does DTU. Even more telling Durham has recorded serious injuries and even fatalities in the last few years in Illinois. The in-house program has never had a fatal accident in its entire history (~60 years and billions of student miles). The current transportartion department has won numerous awards as a safe and efficient transportation solution.

In the last few days Millar has also begun to mention safety policies and practices that, he says, are in place with private companies and give them a safety advantage. Interestingly, many of these safety measures - touted by Mr. Millar as private company hallmarks - are actually things he and his crew have been stripping away from the in-house department. This is a department that was already coming in under budget every year, and won awards for safety.

One indication that Millar's and Superintendent Scott Thompson’s roll back of these measures has affected safety is the hit and run accident we saw last week. A new (2 week) driver hired on the basis of minimal experience – having worked previously only with a private company much like Durham - was hired by the district. With little more training here than an afternoon’s drive, he was put out on the streets. That driver then backed his bus into traffic, hitting a car, left the scene, didn’t call in to report, and generally failed to follow any of the established procedures. The driver was fired, with the union’s blessing.

The safety related cut-backs by the district include among other things firing the on-staff trainers and reducing the required training period to virtually nothing. It seems certain the union will be discussing what measures are possible to immediately put those things back in place. There should be no disagreement, considering the district's recent conversion to the safety first banner - and their now expressed faith in these very same measures.

The vaunted technological resources claimed by Durham might not provide the advantages advertised, considering the result. Durham is a company with three fatal accidents in Illinois in the last 24 months. Their employees flee in droves (100% turnover every 3.2 years) while those remaining file human rights violations complaints by the hundreds - and unionize. Durham continues to rack up complaints from parents and even from the districts who are their clients. If these cutting edge resources are deployed, they don’t seem to be helping much. The policies and standards Durham brags about are largely the same ones that Thompson and Millar have worked recently to strip away from our in-house department.

A recent Patch article included statements from BOE President Tim Millar about DTU absenteeism. He claimed the DTU rates are 2-3 times that of Durham, and other groups in and around the district. In fact the average DTU absenteeism rate is 8.7% in the last 3 months of 2012 - based on FOIA information. This includes several people out on long term disability. Without those disability absences, the average would be considerably lower. By comparison, national averages were at 8% in 2010, although they’ve dropped recently. National averages do not include long term disability. So unless 211 and Durham are beating the national average considerably, Millar’s claims do not add up. 

These numbers are probably fairly representative for the DTU, and might even have gone down. One (unnamed) patch user with experience in the transportation department had this to say "… I [was] personally involved a few years back studying about 10 years of our average number of drivers and aides being absent. The number averaged 10% on any given day, and it had been the same almost every year. It also turned out that private companies over the United States had a similar average, and the majority of them do not even pay for sick days taken. “

Other fascinating new information came out at Wednesday’s meeting as well. The Durhm bid is actually illegal on two points, in addition to the reimbursement fallacy. Comparable compensation of current drivers is required by state law. The Durham bid substitutes a 401K plan for the existing 100% funded  (pay-as-you-go) pension plan. Also, Durham reps openly talked about shifting current drivers among various districts to supplement hours. This directly contradicts the terms of the RFP on which Durham bid. The RFP explicitly stated that current drivers would be retained within district 15. 

Of course Durham salesmen refused to confirm that the current in-house drivers would be offered jobs anyway. We found out that in the cases of any current drivers rehired benefits could completely disappear when the contract is rebid in three years. This partially explains the 100% turnover experienced by Durham. We also know from experience in neighboring districts that, when Durham takes over, they usually release existing drivers within 30 days - per the terms of their standard 'at will' employment contracts. We learned that for this, among other reasons, hundreds of employee human rights grievances throughout the country against Durham have led, increasingly, to unionization of Durham drivers.

With the reelection of returning board members, and union supporters, Babcock, Bokor, Seiffert and Ekeberg – the writing seems to be on the wall. A majority of residents appear to have made up their minds in favor of the proven union position. Many of Superintendant Scott Thompson’s comments in recent days have begun to sound like expressions of abject surrender. It is not surprising that, at this late date, Thompson wants to refocus on negotiations with the DTU.

If Mr Thompson wants to wave the belated olive branch ... here are some thoughts. Formally reject the Durham bid which won't survive litigation anyway. Rescind the district's previous 'offer' to the DTU of a 90% 'redacted' contract. It’s looking more and more as if all of these things are going to happen anyway.