In the first article on University of Wisconsin-Superior outsourcing of their custodians and groundskeepers we looked at what happened to the laid-off workers and the situation for the incoming new workers. It is obvious that any “savings” for the taxpayers came from the reduced wages and benefits of workers.

In the second article, we asked if taxpayers actually save money from outsourcing. For many reasons, taxpayers often do not benefit.

This final article looks at the difficulty of finding real numbers, puts the projected savings in perspective and asks, “Was it worth it?”


Getting the real numbers is a challenge. The author spent several months seeking answers to two basic questions. What is the final total cost of the contract? What is the historical cost of doing the work in-house? State Senator Janet Bewley of District 25 (D-Ashland) and Representative Beth Meyers of District 74 (D-Bayfield) were helpful in getting this information from UW-Superior.

UW says the “total estimate annual contract value” for the winning contractor is $975,994.40. This is with the University continuing to own all equipment. UW-Superior estimates the projected savings annually as $212,315.94. The contract is for five years total with an estimated cost of $4.8 million and a savings of $1.06 million. Historical spending was $1.18 million annually or $5.9 million over five years.

The UW-Superior admits that the savings came from reduced labor costs. UW stated, “The cost savings is coming from a reduction in labor costs, both through the quantity of people used in this service and the labor and benefit rates.”

It is interesting that over time the publicly stated “savings” keep getting smaller. In earlier press reports UWS claimed they would save $500,000 per year. This indicates a need for an outside audit to provide definitive numbers.

In addition to the accounting complexities, other contract issues further muddy the waters. The original Request for Proposal (RFP) states that the contractor would be responsible for providing their own equipment and supplies. The final contract allows the contractor to use $1.4 million of UWS owned equipment and supplies. This includes janitorial equipment at $310,000, grounds equipment $1,062,758 and supplies at $59,343.

Is this subsidy to the contractor being paid for by a reduction in the contract price? In addition, UWS is paying a fee of $113,385 per year to the contractor to “manage” the use and maintenance of these resources. It is not clear how this cost is factored into the total contract price.

The bottom line is that a professional audit is needed to accurately determine if the taxpayer has benefited from outsourcing. The Legislative Audit Bureau or an organization with the needed expertise and resources needs to do a complete audit.


UWS says it will save $212,000 each year by outsourcing. Accepting this figure, what does this mean to the taxpayer and the community?

Wisconsin Idea says that the university exists for “improving peoples’ lives beyond the classroom.” UWS generates approximately $41.2 million in annual spending and income for Superior and Douglas County, and is responsible for sustaining about 785 full and part-time jobs (minus 27) for the local economy. It is a major contributor to the local economy.

In addition, many NW Wisconsin residents have earned degrees and increased their education because of UWS. Many of these people may not have had the resources to go to school elsewhere. Many working, non-traditional students have been helped through night and weekend classes. The University Extension has helped many individuals, farmers, and small business owners. UWS is a major asset to the region.

Given these facts what is the magnitude of the “savings” from outsourcing? UWS has an annual budget of about $74 million. Reducing that by $212,000 represents less than 0.02% savings.

UWS has a budget shortfall of $4.5 million. If the 107,000 people in the six northwestern Wisconsin counties passed the hat, they could solve that problem with $42 per person. If everyone in the state pitched in, it would cost 79 cents.

If UWS does save $212,000 by outsourcing that is a $1.98 tax break for each person in the six counties. Statewide everyone saves 4 cents! Is this too much to pay for the educational benefits and the economic boost provided by the UW Superior campus?

Our government does need to be as efficient and as low cost as possible, but cutting the budget can be counter- productive. We may be better off taxing ourselves to have quality education and good jobs. Penny-wise but dollar-foolish budget cuts hurt us all.