The state Civil Service Commission approved four more state contracts with private businesses that will result in the layoff of more than 100 state employees — most of them in the Baton Rouge area.
Employees will lose their jobs as the state gets private contractors to pursue delinquent student loans, provide dietary services at four health agency facilities as well as potentially take over security for the Old State Capitol and State Archives Building.
The fourth contract, involving environmental services at the LSU Health Sciences Center in Shreveport, will not result in employee layoffs. The contract, with Sodexo Operations of Gaithersburg, Md., is structured so that state employees remain state employees who work under the management and supervision of the contractor until they quit. An estimated $1.6 million in annual savings is projected.
Civil Service Commission member Curtis “Pete” Fremin said the LSU contract should be a model for other agencies considering contracting out services currently provided by state employees. “I want to thank you for protecting Civil Service employees, not throwing them to the wolves,” said Fremin, the commission’s elected state employee representative.
Fremin later was the only one of seven commissioners to vote against the state Department of Health and Hospitals’ proposed contract to privatize dietary services at Eastern Louisiana Mental Health System and the Villa Feliciana Medical Complex, both located at Jackson; and Central Louisiana State Hospital and Pinecrest Supports and Services Center, both at Pineville.
The institutions provide care for the mentally ill, those with developmental disabilities as well as people with complex medical and rehabilitative needs.
Kindred Hodge, DHH program manager, said the contract with the Health Care Services Group of Bensalem, Pa., will result in an annual savings of $1.4 million. Hodge said 101 positions are impacted at the four institutions, of which 12 positions are vacant and others are retirement eligible. He said a layoff of up to 80 people could be necessary. Hodge said the contractor will be required to give preference in hiring to current state employees.
The company is scheduled to take over the services Aug. 1.
Commission action will allow the Louisiana Office of Student Financial Assistance to enter into a five-year contract with Sallie Mae to handle oversight and collections involving federal student loans.
Melanie Amrhein, LOSFA executive director, said the program is becoming too expensive to handle in-house. The contract will save an estimated $1.3 million in LOSFA operating expenses the first year rising to $3.3 million in year five, she said.
Amrhein said 58 positions are impacted. She said all but 31 employees have already retired, left for other state employment or for jobs in the private sector. The 31 employees would be subject to layoff on June 29, with the Sallie Mae contract starting by July 1.
Today, Amrhein said her agency is collecting on about 12 percent of the loan portfolio while Sallie Mae is expected to collect about 24 percent.
She said the agency will split certain fees and thus gain revenues for its reserve fund.
Meanwhile, the state Secretary of State’s office has received 13 bids for the contracting of security services for the Old State Capitol and the State Archives.
First assistant secretary Kyle Ardoin said the agency has chosen Gallagher Security, but has not yet entered into the contract, which is estimated to save $270,000 a year. Nine employee jobs would be affected.
“This would be a tool the secretary believes he may need” depending on final budget cut numbers, Ardoin said. “We are asking for approval to be in the tool kit for the next six months.”