Consultants paid more than staff in outsourcing effort

Gov. Bill Haslam’s administration is paying more each month to three consultants retained to develop plans for privatizing management of all Tennessee government-owned real estate than paid in salaries to four state employees assigned to the effort, state figures show.

The team is operating under the title Strategies for Efficiency in Real Estate Management, or SEREM, and is led by Terry Cowles, who is director of the governor’s Office of Customer-Focused Government.

It was set up earlier this year and has a goal of implementing a broad new outsourcing plan by July 1, 2016, according to SEREM documents initially obtained by WTVF-TV, though Haslam insisted last week the idea is to just explore options for saving taxpayer dollars and that he has no bias toward privatization.

In response to a request last week, SEREM spokeswoman Michelle Martin provided a list of the seven individuals working on the project and payment arrangements for the three who are consultants.

Of the four state employees, the two with the highest salaries are Cowles and John Stites, who holds the title of director for real estate process improvement. They earn $12,500 per month each, or $150,000 per year.

Reen Locker Baskin, who has the title of director for alternative workplace solutions, has a monthly salary of $10,444, according to state government’s website, while Martin’s salary is $8,333 per month.

Total monthly salaries for the four state employees thus total $43,288. Martin noted that the employees may have other responsibilities in addition to SEREM. Baskin, for example, is deputy director of the state Department of General Services.

The combined average monthly payment to the three consultants total $47,288 under the arrangements explained by Martin, though she said precise figures of payments actually made were not available Friday.

The consultants are Mike Ledyard, Kate Vitasek and Bob Balzar.

Vitasek has written a book on “vested outsourcing” with Ledyard as a co-author and they now both work with Vested Way, a company promoting the idea. The firm’s website described “Vested” as “a business model, methodology, mindset and movement for creating highly collaborative business relationships that enable true win-win relationships in which both parties are equally committed to each other’s success.” The concept is based on research conducted by the University of Tennessee College of Business, according to Vested Way’s website.

Ledyard’s contract, which began July 1, calls for payments of $221.78 per hour and anticipates him working four days a week for eight hours per day — or a total of $28,387 per month if the standard is met. His travel expenses are included, Martin said.

Vitasek’s contract — which began just this month — calls for payments of $191.33 per hour and anticipates her working just two eight-hour days per month, which would be $3,061 in monthly payments.

Balzar, a former TVA vice president who oversaw energy efficiency efforts there, is paid $165 per hour under his contract, which began in October 2014. It envisions Balzar working three eight-hour days each week, which would mean payments of $15,840 in a four-week month.

NOTE: Martin’s salary was stated incorrectly in the original post, an error that also made the total staff salaries incorrect. The figures have been corrected. The post also originally said all consultant contracts included travel expenses in their base payments; actually, Martin says, only Ledyard’s contract includes travel expense.