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Tennessee contract with colleges might save taxpayer money

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Bureau Chief’s Note: This is the second of a four-part series about the state of Tennessee outsourcing maintenance services to a private provider. You may read the first part of the series here.

Tennessee officials were so pleased with the outcome of a 2013 contract to outsource maintenance work to a private company that they signed a second contract with the same provider earlier this year.

As reported, that first contract was soaked in controversy.

Given the evidence, people will likely quarrel just as much over the second contract, if not more so.

Outsourcing government services to private providers reportedly saves taxpayer money. Published reports say state officials need to save as much taxpayer money as they can and that the outsourcing program is one way to do it.

According to the terms of the second contract, Jones Lang LaSalle will maintain additional state government buildings, including state colleges and universities.

Mark White

Any state employee who helps maintain state colleges will keep their jobs as they transition to JLL, said David Roberson, spokesman for the Tennessee Department of General Services.

They must pass a background check and a drug test first.

The leadership of Tennessee’s State Employees Association dislikes this agreement. The people who head up Tennessee’s Campus Workers union don’t like the deal either.

“A lot of accommodations have been made for them, but the concern is partly the fact that I think they don’t believe they will be protected in the second contract, even though it’s written in there. There is a general concern this is something new and hasn’t been done before,” Roberson said.

In fact, there’s already a well-known precedent, he added.

“They make a big deal about this but their food services are already outsourced and have been for 30 years. It’s not like it’s new. It’s just that now that something is being looked at for facilities management and now people are saying it’s terrible, but it didn’t bother them for 30 years that their food services were being provided by a private company.”

Members of the Campus Workers Union did not return repeated requests for comment.

Right now, only two colleges are contracted with JLL, said Randy Stamps, TSEA’s executive director.

“Those schools are Tennessee Tech and the Tennessee School for the Blind — and we know JLL is pursuing other contracts with the University of Tennessee,” Stamps said.

“The reason we oppose it is because there are folks who have been there maintaining the higher education facilities for years. They have a relationship with the professors and the buildings they maintain. They know about confidentiality and what goes on in a professor’s office. They are also in the apartments and dorm rooms of students and they have developed relationships with those people too. In that area, we consider it a security issue.”

Profits before employees?

State Rep. John Ray Clemons, D-Nashville, says this outsourcing deal amounts to nothing more than misplaced priorities.

“Profits are a private company’s priority.  When profit takes the stage, everything else plays second fiddle,” Clemons told Tennessee Watchdog.

“By inserting these (drug test and background check) contingencies, these companies are essentially questioning the character of state employees and betting that a certain percentage will fail.  You will note that there is no contractual requirement to replace a terminated employee or fill their role with another duly qualified worker.”

Justin Owen, president of the Nashville-based Beacon Center of Tennessee, a free-market think tank, said a company that doesn’t treat its employees right won’t succeed.

“Those who say that companies don’t care about their employees have a fundamental misunderstanding of how the free market works,” Owen said.

Photo courtesy of the Tennessee General Assembly's website.

John Ray Clemons

“Companies have just as much an incentive to treat their employees as well as government does.”

State Rep. Mark White, R-Memphis, said in a Memphis Commercial Appeal column that total state funding costs are increasing at about 6-8 percent each year. State revenues, meanwhile, “have increased at less than 3 percent over the last couple of budget cycles.”

White vice chairs the state’s joint Fiscal Review Committee.

“Recently, the University of Tennessee forecast a $122 million budget gap for its system campuses (Knoxville, Chattanooga, Martin and Memphis) by 2025. This is a gap that cannot be made up solely from tuition hikes and state appropriations,” White wrote.

“Initial analysis by JLL and the state project that the UT system could save about $12 million annually, enough to address the current budget gap. Given that outsourcing of non-core services is commonplace on university campuses, such a step certainly is not risky.”

In a column for the Tennessean, JLL’s Executive Vice President Tom Foster said Texas A&M saved millions of dollars by contracting with a private provider.

As reported, the first JLL contract was to maintain state office buildings in downtown Nashville, and that has reportedly saved Tennessee taxpayers about $40 million.

That first contract was for five years and gives JLL the right to manage 10 percent of state properties.

The next part of this series will examine complaints over how well JLL has maintained Legislative Plaza in downtown Nashville.

Contact Christopher Butler at chris@tennesseewatchdog.org

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Disclaimer:

Opinions posted on TennesseeWatchman.com are those of the individual posters and do not necessarily represent the opinion of TennesseeWatchman.com or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
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