The town of Andover made a crucial mistake in the outsourcing the Spring Grove Cemetery positions. Most nonprofit organizations, private and public, should not outsource essential services.
I have been observing with utter amazement the Andover Board of Selectmen’s preposterous demand that the town manager reduce budget costs by $225,000 in order for Buzz Stapczynski to obtain an increase in salary and pension benefits. Stapczynski’s response to the selectmen’s requirement was to cut an employment position at the town cemetery. The cut to the town employment position would save the town a little more than $48,000. Mr. Stapczynski then hired a private contractor at the expense of $29,000 to cut the grass.
The town employment position was for 12 months and the employee performed the duties of cutting the grass and other important services to the town, while the $29,000 for the private contractor would be for less than six months and the contractor would only cut the grass. Applying a simple mathematical model, the $29,000 amount projects out to almost $70,000 per year. Clearly, this is a serious contradiction to the best interest of the citizens and taxpayers of the town of Andover.
Stapczynski and the Board of Selectmen have placed the town in serious financial jeopardy by allowing a private contractor to perform certain duties at the cemetery. An employee of the town that was harmed on the job and placed on workers’ compensation would be barred from filing a civil action against Andover by operation of law. An employee of a private contractor that was injured while working at the cemetery and placed on workers’ compensation would be barred from filing a civil action in tort against the private contractor. Nevertheless the private employee could file a costly civil action against the Andover in tort.
The outsourcing of employment situations to save money is not for every organization. The Pennsylvania corporation United Health Services is a for-profit entity that owns 25 hospitals and 205 mental health facilities in the United States. The UHS’ Board of Directors ordered the CEO to reduce costs and increase profits. As a result of the cost-cutting measurers on April 15, 2010, Medicare sent a letter of termination to UHS’ hospitals in California, citing multiple failures for lack of proper infection control, lack of pharmacists to handle medications, a lack of competent health rules for hospital staff and among other safety concerns. The CEO received a $3.4 million bonus from UHS for increasing earnings-per-share and return on capital. UHS’ hospitals paid in excess of $27 million to settle claims from 1999 to 2006 it committed fraud and paid bribes to doctors in Texas. The settlement with the Justice Department involved allegations that the UHS’ hospitals had turned to financial relationship with several doctors to induce them to refer patients to UHS’ hospitals. The government alleged that these payments were designed through a series of sham contracts including medical directorships and lease agreements.