WHILE STUDENTS headed home for the summer yesterday, the School Reform Commission approved the first of two staff outsourcing plans with the intent to cut costs and staff empty classrooms.

The SRC voted unanimously to give Source4Teachers, based in Cherry Hill, N.J., a $34 million contract to manage substitute staffing services for two years.

Chairwoman Marjorie Neff and Commissioner Sylvia Simms missed the meeting but cast their votes in a conference call.

"The vendor was able to commit to us to provide high quality substitutes at a 90 percent fill rate by January of next year," said Naomi Wyatt, the district's head of human resources. "They have extensive experience in Pennsylvania and in the mid-Atlantic."

But, the idea of privatization of more than 1,000 union-held substitute staff positions in addition to a proposal to outsource health services, did not sit well with the Philadelphia Federation of Teachers. There's no date set yet to vote on outsourcing health services.

"Once again, the School Reform Commission is using the budget crisis as an excuse to privatize public education, one position at a time," said PFT president Jerry Jordan in a statement yesterday following the vote. He added that the the union is considering filing an Unfair Labor Practice against the district.

On average, the district is only able to fill about 64 percent of the empty classrooms created by vacancies and teacher absences, leaving about 407 classes without substitutes to staff them each day.

Under the new agreement, Source4Teachers will incur penalties if the firm is unable to fill 90 percent of the vacancies.

"A large part of this for me is about providing more and better services to our students," Commissioner Bill Green said.

The district said its goal is to fill classrooms and lower costs from $18 million annually to the projected $15.9 million that it would pay to outsource the hiring of substitute teachers.

Source4Teachers will be able to hire anyone, free from the district's restrictions on hiring retirees based on state regulations regarding pensions. It plans to pull from the current pool of subs and offer benefits, retirement plans and unemployment.

Retired teachers "are very dedicated and know the schools," Wyatt said. "It would be a huge advantage to have them go into the classroom first."

Substitutes would be given pay incentives to work in the typically harder-to-staff schools in certain areas of the city, Wyatt said.

She said there isn't a teacher attendance issue, but rather an issue with the district's ability to procure the substitutes.

Eight vendors were considered for the job, Wyatt said, but two of them didn't have the ability to staff at the scale the district needed and four weren't able to provide the "quality and quantity" of teachers needed. Source4Teachers was chosen from the remaining two applicants.

The SRC also granted charters for five schools that were given conditional approval in February.

It also approved the closure of Kensington Urban Education Academy High School and its merger with Kensington Business, Finance, and Entrepreneurship High School after the 2015-16 school year.