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District gives up on Source4Teachers, poised to hire new firm

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

The School District has thrown in the towel with Source4Teachers to provide substitute service to schools after a disastrous year, but it is poised to hire another firm that has more experience dealing with large urban areas.

The School Reform Commission plans to vote on a contract with Kelly Educational Staffing at its next meeting on May 19.

Officials expressed hope that Kelly, a national firm – unlike Source4Teachers, which is mostly regional and based in Cherry Hill – will be able to do better. Source4Teachers, hired last summer, set ambitious goals for providing substitutes but never met them, leaving tens of thousands of students without consistent instruction and throwing schools into chaos as other teachers scrambled to cover for absent colleagues.

Kelly has experience in providing substitutes for large districts, including Duval County, Florida, which includes Jacksonville, the capital city.

"I am committed to resolving the substitute teacher staffing challenges long facing our schools," said Superintendent William Hite in a statement. "Our effort to improve substitute coverage this year fell woefully short. I am confident that Kelly Services will be successful given its track record with large, urban school districts."

The Source4Teachers contract will run through the end of the year, but will not be renewed. The firm sought to renegotiate it, but the District declined.

SRC Chairwoman Marjorie Neff said that she thought ending the Source4Teachers contract was the right thing to do, but that she wasn’t sure yet whether she would vote to hire Kelly.

"Based on this year’s experience, the decision to discontinue the Source4Teachers contract was the right one," she wrote in a message. "I will reserve judgment on the decision to hire Kelly Services until there has been a full briefing for the Commission."

District spokesman Fernando Gallard said that the contract under consideration for Kelly would pay the firm $21 million in each of the next two years, more than the $17 million set aside for Source4Teachers. Kelly will be paying the substitutes the same daily rate – $160 for certified teachers and $125 for uncertified teachers – that the District paid when subs were under its management.

Source4Teachers was paying those rates only to so-called "District originals," or people who had previously subbed for the District. The daily rates for everyone else, including retirees, were between $90 and $110 a day for certified subs and $75 to $90 a day for uncerfied subs.

Kelly will also have a larger staff on the ground working on recruitment and placement, Gallard said – 10 full-time recruiters, plus seven to nine managers.

Denise Ridenour, a spokeswoman for Kelly, emailed that the firm is "cooperating with the School District of Philadelphia as they internally evaluate options for managing their substitute teacher workforce in advance of making a recommendation" to the SRC. "We have provided them information regarding the services provided by KES to assist them in their decision processes. As always, KES is focused on assisting teachers and school administrators to reach the education goals of the district by filling classrooms with qualified substitute teachers who are dedicated to continued student achievement and learning."

Kelly did not respond to the District’s original Request for Proposal last year, Gallard said.

A spokeswoman for the Duval County district said that Kelly "has been able to provide support for a district our size. Their fill rate for us has been between 95.8 % (current year) to 99.5% (12-13)." Duval has just under 130,000 students, almost as many as Philadelphia District schools.

Source4Teachers spokesman Owen Murphy said that the firm wanted to continue the partnership with Philadelphia, despite the problems this year. It told the District on March 29 that it didn’t want to renew next year under the present terms.

"We felt that the contract really didn’t reflect the reality on the ground," Murphy said.

He said that one problem Source4Teachers faced is a higher daily teacher absentee rate than expected. In addition, he said, "on a daily basis, 20 percent or more of teacher absences were logged within the hour before school started (with many coming in after the school day had already begun). It’s virtually impossible to fill these types of vacancies, yet these absences were counted in the fill rate, dragging it down."

Plus, at one time, there were about 400 vacancies requiring long-term subs that the firm was held responsible for. The District later took back the task of filling those long-term vacancies itself, but has had only partial success.

"The most telling thing is … the District with the new partnership is going to go back to the same pay rates prior to the Source4Teachers involvement," he said. "That is a clear signal of the awareness that they simply couldn’t be successful and reach fill rates they had hoped to with those types of pay rates."

Source4Teachers, he said, had advocated to increase the pay rates to help with recruitment. "We gave a variety of suggestions and ways to improve outcomes for both parties, but it would appear at this point that they are using those recommendations in a new partnership," Murphy said.

Under the terms of the contract, Source4Teachers was paid only for the the jobs it filled and had to eat some of the District’s costs, paying teachers for lost prep times. The firm has been paid just under $6 million so far this year. Part of the reason the District expects to end the fiscal year with a fund balance is unwanted savings from the substitute contract and the failure to fill all its teacher vacancies.

Opponents of outsourcing substitute service said that they didn’t expect things to improve under another private company.

"The fact that the District never canceled the contract shows that the Hite administration was willing to allow the chaos brought on by its disastrous plan to continue at the expense of the students," said Lisa Haver of the Alliance for Philadelphia Public Schools (APPS), a consistent opponent of privatizing any District services. "The fact that they would take a risk on another unproven private company confirms that this is a desperate attempt to replace union workers at any price."

There are several problems with returning substitute service to the District, according to Gallard and other officials. One is a low fill rate under the District – between 55 and 70 percent – which is the reason that the SRC turned to private firms to begin with. Source4Teachers promised 75 percent on the opening day of school and 90 percent by January – but on its best days it barely hit the District’s minimum, never going higher than 55 percent on any given day.

Another barrier is the the cost and logistics required to comply with the Affordable Care Act – also known as Obamacare – which requires employers to offer health-care benefits to employees who work more than a certain number of hours a week.

"That is a large challenge for us. We do not have infrastructure to do that type of work," on top of having to pay the benefit costs themselves, Gallard said.

And a third barrier has to do with teacher placement – who gets to decide where teachers go. Under the District, many subs declined to work in the hardest-to-staff schools. Under Source4Teachers, not only perenially hard-to-staff schools, but also schools that traditionally had no problem getting subs found themselves scrambling. How a new substitute contract would solve this is unclear.

The resolutions for the May 19 meeting will be posted on the District’s website Monday. They were supposed to be posted Friday, but were delayed, Gallard said.

Murphy said that Source4Teachers had 1,100 people in its pool and 700 others in various stages of vetting. Gallard said that he expected Kelly would be able to hire those people and that if their credentials were current, they would not have to repeat the time-consuming process, which includes fingerprinting, background checks, and child abuse checks.

"Just like Source4Teachers, the District was not doing the job necessary to fill all the vacancy spots with subs," said Gallard. "We were not doing the job. Source4Teachers has been given a year, they didn’t do it. Now we feel like Kelly has the experience and the resources to get it done."