Roanoke City Public Schools will become the first area division to outsource its substitutes to a New Jersey-based company.

Beginning Jan. 5, Source4Teachers will staff the city’s substitute teachers, substitute aides and substitute clerical workers.

The move to privatize subs will cost about $1.6 million, and it is unclear whether it will save money. Officials have said it will help tame costs associated with the Affordable Care Act, as well as the law’s tracking and reporting requirements .

The Roanoke School Board voted unanimously during a meeting Tuesday to authorize the superintendent to enter into a contract with the firm, which has a state contract, and currently provides substitutes for two divisions in the Hampton Roads area.

The board first talked about outsourcing last month. Officials have said they were exploring the idea because the system faces escalating costs linked to the health care law’s mandate that beginning Jan. 1 employees working an average of 30 hours or more a week be offered health insurance.

“It is certainly a budget impact in terms of offering eligible substitutes health benefits,” said Sandra Burks, the system’s executive director for human resources.

Burks estimated that adding benefits for 15 substitutes would cost about $165,000.

Roanoke subs currently do not receive benefits. They will be eligible for some health care benefits after 90 days working for Source4Teachers.

As part of the arrangement, the school system will still set pay rates, have the ability to select preferred subs and be involved in the substitute selection process. Burks said she anticipates the process under Source4Teachers being very similar to how subs are found and placed now.

The division already contracts with Mountain Valley Transportation for busing services and with Carilion Clinic for school nurses.

The move to outsource substitutes continues a trend by systems in the area to privatize services. This year, Salem City Schools opted to outsource nutrition services, and Roanoke County outsources some maintenance work. Neither district outsources substitutes.

While the board unanimously signed off on contracting with the company Tuesday, the move was not without some criticism.

Scott LeCates, Virginia Education Association UniServ director who advocates for VEA members, spoke during the meeting’s public comment period where he questioned the decision to outsource.

“I’m here to discourage any further privatization in Roanoke City Public Schools,” he said, adding he would like outcome reports for the services that have already been privatized.

He asked if the board has considered alternatives and asked officials to take a hard look at the proposed outsourcing company Source4Teachers. LeCates said at least two divisions have had issues with the company, including cost and allegations of child abuse.

According to local media reports, a Source4Teachers substitute in Jersey City was accused of slapping a student, though a spokesman for the company said the claims were unsubstantiated.

Owen Murphy, Source4Teachers vice president of marketing, said in an email that the incident was investigated by New Jersey’s department of child services and the Jersey City Police Department with cooperation from Source4Teachers, and it was determined the child had not been struck or slapped by the employee.

The school board in New Jersey’s Washington Township voted in July 2012 not to renew its contract with Source4Teachers, citing effectiveness and lack of cost savings, according to local reports. However, a week later, the board rescinded its vote and renewed its contract after board members found difficulties of bringing subs back in-house.

Murphy said the Washington Township School Board is a client and has been since 2010. He said in 2012 the board voted to end the contract, but reconsidered a week later.

Source4Teachers Chief Operating Officer Andrew Hall was on hand at Tuesday’s meeting and pointed out the company works with more than 170 school districts and has been in business since 2006.

Two of those divisions are Hampton and Newport News . Roanoke officials said their counterparts in Hampton have been pleased with the company.

Superintendent Rita Bishop said she was not concerned about the company.

“We have done pretty good due diligence,” she said, adding the contract can also be terminated with or without cause.

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