- Associated Press - Monday, September 21, 2015

NASHVILLE, Tenn. (AP) - Three part-time consultants in a new state office that’s heavily focused on outsourcing some government services stand to be paid at a combined annual rate of $612,000 even as Republican Gov. Bill Haslam insists no decision has been made about whether to privatize anything.

The top paid contractor is Mike Ledyard, who gives his title as director of facilities management outsourcing. He receives $222 an hour for an average of four full days a week, which would come to about $369,000 over the course of a year.

Ledyard’s projected annual income surpasses by more than $100,000 the salary of the top earning state employee in Tennessee government, Chief Investment Officer George Brakebill in the Treasury Department. Haslam declines to take his own salary of about $185,000.

As for the two other consultants, outsourcing adviser Kate Vitasek is paid $191 an hour to work two days a month, and energy cost reduction specialist Bob Balzar earns $165 per hour for three days a week. The hours are described as averages and there are no guarantees the consultants will work a full year, as they can be dropped at any time by the state. The jobs don’t include health benefits.

The contractors work in the new offices for Strategies for Efficiency in Real Estate Management, or SEREM.

Democratic state Sen. Jeff Yarbo of Nashville questioned why the state is turning to highly paid contractors to evaluate privatization efforts.

“Why are we outsourcing our outsourcing?” Yarbro said.

Haslam defended seeking outside help.

“One of our functions is to make certain we’re doing things the very best way we can,” he said after a higher education conference on Monday morning. “We’ve got to bring bright people in to look at that and attack it.”

Haslam stressed that the SEREM office also works on areas like reducing energy costs and finding “alternative workplace strategies” to improve efficiency at existing state offices.

The governor told reporters last week that any decision is still months away on whether to outsource building management the state’s colleges and universities, prisons, armories or parks.

“Everybody thinks, well, Haslam has some bias toward privatizing. I really don’t,” Haslam said. “My only bias is how are we going to run this the very best we can for the very lowest amount of money.”

State General Services Commissioner Bob Oglesby said Monday that the outside consultants bring “subject matter” knowhow to state government.

“When don’t have the expertise, we need to go out and get it,” he said. “They’re brought on board not necessarily to get it done, but to help us do the evaluation and make the business case for the state to see if it makes sense.”

Consultants Vitasek and Ledyard, who are outsourcing advocates, have written a book titled “Vested Outsourcing” and have worked as lecturers on outsourcing at the University of Tennessee’s business school.

Four state employees also work at SEREM.

They include Terry Cowles, director for the Haslam administration’s Customer Focused Government initiative; John Stites, director of real estate process improvement; Reen Locker Baskin, who splits her time between alternative workplace solutions and as deputy commissioner of general services; and Communications Director Michelle Martin.

Cowles and Stites are paid $150,000 per year, Baskin earns $125,328 and Martin’s salary is $100,000.

The United Campus Workers have criticized what they call Haslam’s “outsourcing frenzy” for targeting benefits-paying jobs at public colleges and universities. And University of Tennessee President Joe DiPietro has raised concerns that the model espoused by the SEREM office would make it difficult for the school to opt out of the program.

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