Budget concerns and the advent next year of new health insurance requirements have caused some of the bigger school districts in the Kansas City area to rethink one of their largest logistical problems — the hiring of substitute teachers.
The result: Privatization. Substitutes in Lee’s Summit, Hickman Mills, Kansas City and North Kansas City schools who had been hired and paid by public school districts in the past are now employed by Kelly Educational Staffing, an arm of one of the country’s largest temporary employment agencies. The change, which has happened in just the past two years, is part of a nationwide trend as districts look at how to keep expenses low and prepare for the new federal health insurance law known as the Affordable Care Act.
But while the trend seems to be taking hold on the Missouri side of the state line, most Johnson County school districts have been unaffected. Only one district, De Soto, uses a temporary employment agency, but it has done so since 2007 — well before the health insurance law was even considered by Congress.
Missouri district officials say the change allows them to find more quality substitutes — especially long-term ones — without incurring the extra costs of health insurance that will be required next year.
But the trend is controversial with some, who say it could pave the road to a loss of local control over teacher hiring and may put a drain on the state retirement fund.
While Missouri districts also say they use the temporary services because they sometimes have trouble finding substitutes, Johnson County districts say they have no such problems.
Officials at the large districts all reported having large pools of qualified subs to draw from and little trouble filling any day-to-day vacancies that come up.
Shawnee Mission schools usually fill around 97 percent of the 115-120 vacancies that come up each day, said Ginny Lyon, human resources administrator for the district.
Likewise for Blue Valley, which may need 100 substitutes per day.
“It’s rare to have a day when every position is not filled,” said Scott McWilliams, executive director of human resource for Blue Valley. “We are very fortunate to have a high quality substitute candidate pool.”
In Johnson County, De Soto was alone using an outside agency for substitutes. It has contracted with Morgan Hunter Education Division since 2007, said spokesman Alvie Cater.
De Soto decided that using the agency was a more efficient way to manage substitutes than putting an in-house staffer to work on it in a relatively small district.
Of course, personnel officials will keep eyeing the effects of the Affordable Care Act. But so far, at least, the number of long-term substitutes who might qualify for health insurance has not been high enough to cause a significant impact on the budget, they say.
Kelly Educational Staffing has been on a roll the past couple of years, said Scott Apsey, senior director of operations. Currently Kelly Educational Staffing works with 4,500 schools in around 800 districts. In 2010-11, it was in 2,800 schools. He attributes that less to the new health care law than to the positive reviews the districts are spreading of the services’ advantages.
The Lee’s Summit and Hickman Mills districts are the latest to outsource its substitute duties to Kelly. Kansas City schools started in the 2013-14 school year.
Jeff Miller, Lee’s Summit’s associate superintendent in human resources, said the change will allow the district to have more quality substitutes without limiting hours or providing the costly health insurance.
“This is a positive story without a doubt,” Miller said. “This is going to work out very advantageously for the students and staff because we are going to have quality substitutes for the district.”
Managing the substitutes is a crucial but time-consuming job for school districts. Although many of them have software to match substitutes with upcoming vacancies, the substitute pool has to be recruited and interviewed, payroll has to be managed and last-minute calls have to be made. Lee’s Summit estimated it would cost the district $338,000 to handle substitutes for the 2014-15 school year.
Lee’s Summit schools need, on average, around 112 substitutes per day. At Hickman Mills, the need ranges from around 20 to 55. But finding someone to fill those spots is not always possible. Sometimes, school districts end up short. When that happens, teachers may be asked to do double duty, or to give up their planning time to fill one of the missing spots.
If that happens often enough, it affects teachers’ morale, said Casey Klapmeyer, associate superintendent at Hickman Mills.
It has been a problem at Hickman Mills. Last year that district filled only about 82 percent of the vacancies on average, Klapmeyer said. “But some days it would go to the mid to low 60s and those were the days that were killing us,” he said.
Lee’s Summit fared better with about a 90 percent fill rate. But Kelly boasts a 95 percent fill rate, and that has made it attractive to districts.
“It’s very disruptive to schools to have people running around at five o’clock in the morning figuring out how to get classrooms filled,” said Apsey. “It diverts much needed resources away from the mission of the school.”
Add to that the expenses of health insurance under the Affordable Care Act and outsourcing becomes even more desirable, according to some school district officials.
Under the new law, districts will have to offer health insurance to employees who average 30 or more hours per week. The calculation for school districts excludes all the breaks when school is not in session.
This mostly affects substitutes who take over for a long-term absence. District officials all said it’s better for the students to have one long-term substitute than a series of teachers when a full-time teacher must be absent for an extended period of time.
But the health insurance was an issue. Lee’s Summit estimated, conservatively, that 50 substitutes might qualify for health insurance, adding $355,000 to the budget, Miller said.
The Affordable Care Act was the catalyst that convinced North Kansas City schools to opt for Kelly in the 2013-14 year, said assistant superintendent Dan Clemens.
When North Kansas City looked ahead to the new law, it saw a dramatic increase in costs. According to figures presented to the school board, it would have added $660,000 to the $1.7 million substitute teacher budget to provide health insurance for an estimated 110 teachers who would qualify. Paying Kelly to do the subbing would still add to the total budget, bringing it to about $1.9 million, but it will be cheaper in the long run, Clemens said.
The districts can avoid paying health insurance because the substitutes are considered Kelly employees. Some district officials considered that a bonus for teachers because Kelly pays weekly, offers training and benefits such as 401(k) retirement accounts and health insurance. In Missouri, being a Kelly employee means retired teachers aren’t limited to 550 hours to continue to draw state retirement benefits.
In Kansas, though, retirement hours are not calculated the same way. Neither the retirement issue nor the problems finding substitutes has compelled Johnson County districts to look to private agencies.
The idea of outsourcing substitute teachers is not a good one, according to the Missouri National Education Association.
Peggy Cochran, executive director of the Missouri NEA, said the districts give up local control over hiring and evaluating of teachers when they outsource. “Public services should be public,” she said.
“They’re giving up local control over who they’re getting, how they’re being hired and how they’re being evaluated,” she said.
The danger, Cochran said, is that districts could begin to replace full-time teachers with long-term substitutes.
Cochran pointed out that districts still pay the health insurance indirectly through their fees to an employment agency. Those districts that outsource could find themselves with higher fees down the road, she said.
But the Kansas NEA has not seen enough examples of it in Kansas to form an opinion yet, said spokesman Marcus Baltzell.
“We just want the best teachers we can get in Kansas classrooms,” he said.
Ditto, said Jeremy McFadden, director of business and finances for Gardner schools. “We’re not going to outsource what has worked well for us in the past because of the Affordable Care Act,” he said.