Minnesota's Shared School Services Proposal

Joe Kimball, via a kind reader's email:

Some details emerged today from the proposal by Gov. Tim Pawlenty and several lawmakers for what they call a bipartisan effort to require Minnesota school districts and charter schools to combine efforts to reduce costs.

Under their Minnesota K-12 Shared Service proposal, school districts and charter schools will be able to pool their purchasing power for information technology, food services, supplies and equipment, operations, transportation and other goods and services. All Minnesota public school districts and charter schools will be required to participate in shared services.

The proposal calls for the Minnesota Department of Education to create and maintain a list of preferred vendors for various shared services. Once the list was compiled, the ed department would create contracts with the preferred vendors on behalf of the state and work with school administrators, educators and other stakeholders on a two-year shared-services plan to best realize cost savings.

Discussion here:

he bill would require (note the "require" part) all public K-12 and charter schools to purchase services in the following areas from a list of approved vendors: all school materials, supplies, tools, and equipment for school facilities operations and maintenance; technology equipment and communication services; food services; and transportation services. MDE would be responsible for approving the vendors and maintaining the list. The bill would be effective July 1, 2009. A consultant would be hired for the first two years to help the department implement the program. The consultant would be paid on a percentage of realized savings not to exceed 5%. The consultant's fee would be paid from the savings realized by individual school districts, so each district would have to calculate how much their participation in the shared services program had saved them. MDE would reduce their state funding by a certain amount to recover the funds to pay the consultant. Each district's savings would be required to be allocated to "classroom education."

The senators quickly moved to the heart of the matter, and Sen. Bonoff introduced a Mr. Dahl from Deloitte, the accounting firm. Apparently Deloitte had done some work on shared services in schools in Pennsylvania. He shared a PowerPoint with the committee describing the benefits and anticipated savings. He estimated a potential savings for MN schools of $1M/week. The questions starting coming right after he was done.

Sen. Hann (R-Eden Prairie) wondered how the new bureaucracy would not consume all of the potential savings. Dahl recognized the work of the OET and existing service coops and said that their work would be made more effective.

Sen. Hann asked if it was possible that some schools in the state would see an increase in their costs because they had already negotiated very favorable contracts. Dahl said possible, but not likely.

Sen. Hann asked what constitutes "classroom use" for the allocation of savings. Sen. Bonoff said that the intent of the legislation is to be "loose" with the classroom use restriction.

Sen. Saltzman (DFL-Woodbury) asked if the bill would have curriculum implications for textbooks, etc. Bonoff said no.

Posted by Jim Zellmer at January 27, 2009 6:11 AM
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