University of Tennessee campuses will not outsource facilities jobs

In a move celebrated by state workers on college campuses, University of Tennessee administrators announced Tuesday they will not be participating in a proposed facilities outsourcing plan pushed by Gov. Bill Haslam.

The announcements by UT Chattanooga, UT Knoxville, UT Martin and the UT Health Science Center ended more than two years of speculation about whether campuses in the UT system would participate in the plan.

Still in question is whether other public campuses across the state will follow suit.

"Today’s news signals relief for the thousands of UT employees across the state whose jobs were imperiled by the plan," said United Campus Workers, the union representing state university employees, in a statement. "Millions of square feet of real estate and tens of millions of dollars will stay in the public interest."

State officials continue to defend plan

The plan, first announced by the state in August 2015, seeks to add public college campuses, state parks and prisons to a contract with Chicago-based Jones Lang LaSalle for an estimated savings of more than $35 million annually.

"Using the expertise of the private sector is not a new concept to the state; outsourcing has been used to supply a variety of quality services for many years," said Haslam, who is also chair of the UT board of trustees. "This most recent professional contract is no different and it’s already proven to provide excellent service at a low cost to taxpayers. 

"We continue to support this concept and look forward to seeing how these universities work to keep tuition and other fees low for our students and families.”

The state will be reviewing campus decisions and discussing them with "the appropriate people," Finance and Administration Commissioner Larry Martin said in an email.

"This administration fully believes there are significant cost savings to be gained through our contract with JLL for facilities management, particularly on the University of Tennessee - Knoxville campus," Martin said. "Nonetheless, and even as obvious as the savings are to us, we respect the independent decision each campus has made or will make in the coming days."  

Union: privatization 'a bad deal'

United Campus Workers and others have fought vehemently against the plan, expressing concerns about hidden costs and a loss of benefits and job security for employees.

In a news conference at the Knoxville campus Tuesday afternoon, more than a dozen union members gathered to celebrate the decisions not to opt in.

"This is a victory not only for facilities service workers but for our community, for local businesses who would have lost out on contracts and also for taxpayers who rely on oversight and transparency with contracts," said Diana Moyer, president of the union. 

The union said it remains concerned about loopholes in the JLL contract that may allow campuses to opt in at later points, decisions on other public campuses outside the UT system that have yet to be announced, and the state's admission it will be reviewing the campus decisions.

"For two years, UCW has had a clear message: Privatization is a bad deal for the public," it said in a statement. "It’s bad for public employees whose jobs are lost, and for the workplaces they service where standards decline. It’s bad for taxpayers, who lose accountability and oversight of their tax dollars as shadowy multinational corporations take over." 

“We respect the decisions announced today by the University of Tennessee Knoxville and Chattanooga campuses, and express our thanks for the collaborative review of our service proposal," said Tom Foster, JLL's director for the state of Tennessee contract, in a statement Tuesday. “The JLL facilities management contract with the state has achieved $40 million in taxpayer savings through four years and scored consistently high marks for service performance. We continue conversations to extend these benefits to other state agencies, and to public universities who can achieve major savings and lower their education costs.”

Davenport: 'Not the best option for our campus'

Tuesday's announcements come a few days before the UT board of trustees is scheduled to meet in Knoxville, where individual campus leaders in the UT system are expected to present their decisions to the board.

"My decision to opt out was based on the extensive analyses of the financial considerations, the complexity of the work done on our research-intensive campus, and our commitment to the East Tennessee economy and our workforce," UT Knoxville Chancellor Beverly Davenport said in an announcement on UT's website Tuesday. "It is for these reasons that I have decided outsourcing facilities management is not the best option for our campus."

Since 2011, UT Knoxville has increased the amount of building space it maintains through investments in infrastructure while also reducing operating costs and increasing efficiency, Davenport said. 

She said UT Knoxville currently ranks among the lowest in the SEC in administrative and maintenance costs per square foot and that five-year projections indicate an additional $3.3 million in savings.

The UT Health Science Center in Memphis, which stood to save the most by percentage within the UT system, announced it will shift already-outsourced mechanical services to the state's proposed contract, but will not use outsourcing for overall facilities management.

Lawmakers praise decisions 

Both Republican and Democrat lawmakers who have been critical of the proposal praised the decision Tuesday.

“I would like to complement (UT President Joe DiPietro) and Dr. Davenport for making what I think was the right decision," said State Sen. Richard Briggs, R-Knoxville. "It was the right decision for the people who work over there and I think ultimately it will be proven to be the right financial decision.”

“I fought hard with the campus workers to keep that from happening," said State Rep. Rick Staples, D-Knoxville. "I will always stand with working-class men and women when it comes to their jobs and feeding their families.

“You have to hope (other schools and institutions) make the best decision for their workers and their family of support and listen to what their workers say … I think the University of Tennessee laid a great path for other state institution for others to follow.” 

In a news conference in Nashville, other Democratic leaders also praised the decision. 

“I’m here to commend the UT system for putting their state employees first and sticking with their campuses workers,” said Rep. Darrin Jernigan, D-Old Hickory. “It’s something that you get from possibly going to a subcontractor and none of us have control over, none of us can see the numbers. Frankly, we don’t know what kind of harm they would do to our workers.”

Jernigan, along with Rep. John Ray Clemmons, D-Nashville, and Rep. Mike Stewart, D-Nashville, decried the idea of outsourcing, saying more often than not such moves result in companies subcontracting the contracts they obtain and working over government entities to pay more over time.

“The notion that outsourcing saves money is very controversial,” Stewart said. “There is not a lot of evidence for it. Typically, these companies get in, they get a grip on the government, and they spend all their time trying to get more and more dollars siphoned off into their pockets.”

Clemmons called the announcement “a huge win for Tennessee in many ways.”

Proposals for individual campuses within the UT system were made public earlier this month indicating UT Knoxville could save as much as $5.2 million in the first year of outsourcing with JLL. 

Yet UT faculty, facilities workers and others have fought against the plan, saying there are too many unknowns and that the plan would put workers' pay and benefits in jeopardy. 

Only one other public university, Austin Peay State University, has signed on to the outsourcing plan to date. At least one other campus, East Tennessee State University, has said it will not participate. 

USA TODAY NETWORK - Tennessee staff writers Jordan Buie and Tyler Whetstone contributed to this story.