CPS officials back $155M annual building maintenance deal for private vendors, despite budget woes

By Jonathan Bilyk | Jan 24, 2017

In the wake of a decision by Illinois Gov. Bruce Rauner to kill a $215 million state bailout for Chicago Public Schools’ pension funds, the Chicago Board of Education is expected to vote on whether to dole out about $155 million annually to two private vendors to take charge of building maintenance at about 470 Chicago public schools.

The Chicago school board could approve the measure as soon as Wednesday, Jan. 25. The board has included an action item on its agenda for that meeting calling on the board to “authorize a new agreement with various vendors for Integrated Facility Management Services.”

The “various vendors” listed in the agenda item are SodexoMagic and Aramark Management Services.

SodexoMagic is owned in part by NBA legend Magic Johnson, who is a noted supporter of Chicago Mayor Rahm Emanuel. Published reports indicated Johnson and his associates donated hundreds of thousands of dollars to Emanuel’s reelection campaign against Cook County Commissioner Jesus “Chuy” Garcia. And Johnson also helped raise $10 million in donations to a summer jobs program administered by the city.

CPS hired SodexoMagic and Aramark in 2014 to take maintenance and custodial responsibilities at 33 schools under an Integrated Facilities Management (IFM) “pilot program.” The pilot program was expanded to 87 Chicago schools for the 2016-17 school year.

After initial problems and numerous complaints from CPS principals and others at the schools covered by the pilot program, CPS said in a document prepared and distributed by its spokespeople that those issues were addressed, and principals and others at the schools maintained by CPS’ IFM vendors have reported greater satisfaction with the results than those at schools maintained under the in-house “distributed model” of building maintenance. Under that maintenance model, principals are required to engage “multiple points of contact in their school building” to handle maintenance issues, whereas under the IFM model they would, in theory, need to make just one call. The memo said this would increase efficiency and effectiveness.

Further, the CPS memo maintained the IFM approach, if applied to all of the city’s public schools, would save about $16 million annually compared to the more inefficient model employed at the beginning of the pilot program. The document did not directly compare the proposal’s costs to those of CPS’ current maintenance program.

The CPS memo also indicated the city “intends” to keep the approximately 470 building engineers covered by this change working at their current schools, but as employees of SodexoMagic or Aramark.

The proposal has generated opposition from CPS’ building engineers and the union that represents them, International Union of Operating Engineers Local 143.

Local 143 members have maintained CPS won’t save money by implementing the IFM proposal – and the proposal was never about saving money, despite CPS’ current budget problems.

An analysis, provided to The Cook County Record, of the current labor costs of the building engineers covered by the change indicated those 470 workers now collectively earn a little more than $54 million annually.

Further, the proffered analysis asserted that, even if CPS took back the schools now in the pilot program, labor costs would only rise to about $65 million per year.

And the move could have the potential to make the CPS pension hole even larger, as 470 more workers now contributing to the pension funds are removed and some who are eligible begin drawing pension payments, placing more demand on the already troubled pension funds.

In the agenda item, CPS officials indicated the formal written contracts for the vendors are still being negotiated.

However, CPS said it will require the vendors to employ building engineers who are represented by unions. The document does not specify which union will represent the workers.

But under the vendors’ other contracts, that representation has gone to IUOE Local 399, which, like Magic Johnson, prominently backed Mayor Emanuel over Chuy Garcia.

Local 143 had joined with the Chicago Teachers Union and others to support Garcia.

A representative of Local 143 could not be reached for comment Tuesday, and a CPS spokesman by the time of publication had not replied to questions submitted Tuesday afternoon.  

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