Cost of Prince George’s school construction public-private partnership skyrockets

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Highlights

  • A school board member is questioning the exploding cost of a public-private partnership (P3) to build and maintain schools for decades in Maryland’s Prince George’s County.
  • Billionaire Education Secretary Betsy DeVos’s rule requiring public schools to share coronavirus relief funds with private schools has been deemed unlawful.
  • A ballot initiative to privatize St. Louis Lambert International Airport has been pulled by its supporters.

1) NationalAssociated Press reports that ahead of Labor Day “unions representing millions across several working-class sectors are threatening to authorize work stoppages in support of the Black Lives Matter movement amid calls for concrete measures that address racial injustice.” AP reports that “labor leaders who represent teachers, autoworkers, truck drivers and clerical staff, among others, signaled a willingness Friday to escalate protest tactics to force local and federal lawmakers to take action on policing reform and systemic racism. They said the walkouts, if they were to move forward with them, would last for as long as needed.”

Racine Educator United president Angelina Cruz, who represents teachers in a community that abuts Kenosha, said “are we striking tomorrow? No. Are we in conversation with our members and the national labor movement about how we escalate our tactics to stop fascism and win justice? Yes.” 

2) National: In a major victory for public education, Judge Dabney Langhorne Friedrich of the U.S. District Court for DC has ruled that Trump education secretary Betsy DeVos’ rule requiring public schools to share corona relief funds with private schools is unlawful. DeVos’ rule “coerces school districts to use an illegal process to inflate the amount of federal COVID-19 aid they must share with private schools.” 

The ruling states, “In enacting the education funding provisions of the CARES Act, Congress spoke with a clear voice. It declared that relief funding shall be provided to private schools “in the same manner as provided under section 1117.” CARES Act § 18005. Contrary to the Department’s interim final rule, that cannot mean the opposite of what it says.”

In the Public Interest filed an amicus brief in the case together with National Education Association, AASA, The School Superintendents Association, American Federation of Teachers, Americans United for Separation of Church and State, National School Boards Association, Network for Public Education, and Professors of Education.

3) National: A coalition of 21 states is suing the Trump administration over its rollback of the National Environmental Policy Act (NEPA), “which for 50 years has required the government to weigh environmental and community concerns before approving pipelines, highways, drilling permits, new factories or any major action on federal lands.” Trump’s rewrite of NEPA “opens the door for more industry involvement in reviewing the environmental effects of their projects or nixing reviews entirely for some projects that receive little federal funding.” California Attorney General Xavier Becerra says “we’re able to succeed because on the substance we’ve got those great allies—the facts, the science and the law with us—but it also helps that these guys are just plain sloppy and impatient. And it really helps us have a record of success.” 

4) NationalWill taxpayer investments in sports infrastructure translate into racial justice action in the public interest?“NBA player leaders want the franchise owners to put some ‘skin in the game,’ writes Dave Zirin in The Nation. “They want the billionaire owners—who are not only wealthy but politically connected to every municipality where they have a publicly funded stadium—to push for legislation and using their influence to fight back. As NBA insider Shams Charania from The Athletic reported on Twitter from a meeting between players and owners, ‘Players challenged owners to be proactive, not reactive, to social justice changes; create actions, not simply financial commitments.’”

5) National: The next event in the Songs for the Common Good series being organized on a voluntary basis by In the Public Interest’s Donald Cohen will be on Saturday, September 26 at 8pm ET/5pm PT and features Amythyst Kiah from Our Native Daughters. Get tickets early.

6) Maryland: Rachel Fritts of Inside Climate News reports on how Maryland’s preference for burning trash galvanized environmental activists in Baltimore. “According to Kunze, a zero-waste success story has already played out surprisingly close to home. Prince George’s County in Maryland was courted by the incinerator industry in the late 2000s, but decided it wouldn’t be in its best interest to build a new incinerator. ‘And so, they decided a decade ago to invest in compost infrastructure instead,’ Kunze said. ‘Now, Prince George’s County has the largest compost facility on the east coast and it actually turns a profit for the county.’” 

7) Revolving Door News/TexasNicole Conley, chief financial officer for the Austin Independent School District, will join the investment bank Siebert Williams Shank as managing director for infrastructure and public finance in Texas. The bank is a women- and minority-owned firm. [Sub required]

8) Journalism for the Common Good: Capital & Main just won Online Journalist of the Year and Best Website for a News Organization Exclusive to the Internet at the 62nd annual Southern California Journalism Awards. “Joe Rubin won the prestigious Online Journalist of the Year award for his investigation into the state of California’s mishandling of lead contamination at a gun range and children’s gymnastics center. The investigation also won top prize for Local Political/Government Reporting and 2nd place in the Online Hard News category. The judges wrote, “Rubin’s damning portrait of two public health agencies’ failure to protect the public, especially children, from the gun range’s lead contamination is a fine piece of public service writing.”

Education

9) National: Good Jobs First reports in its Covid Stimulus Watch that private and charter schools received approximately $5.7 billion in PPP loans, raising questions about equity in education. “In other words, private and charter schools are getting six times more per facility than public schools. This gap will likely widen, as charter and private schools are also entitled to a portion of federal funding for public education. Additional analysis will be needed to determine the exact size of this gap, but there is clearly a significant disparity in CARES Act funding for different kinds of schools.”

10) NationalThe student housing “public-private partnership” sector is facing a major crisis because of the pandemic, threatening some municipal bonds. “‘This is where we could see more credit stress first, and the reason is because of the bond securitization,’ said Jessica Wood, a higher education analyst at S&P Global Ratings. ‘Student housing projects are structured very lean.’ S&P warned it may have to lower its credit rating on 16 privatized student housing projects. Municipal Market Analytics, an independent research firm, said more student housing projects are likely to default in addition to four already this year. One of the defaults includes a municipal-bond financed luxury dorm at the University of Oklahoma that was struggling before Covid-19.” For an in-depth discussion of this subject listen to Kevin McClure of UNC Wilmington on the August 25 Bond Buyer podcast

11) NationalThe coronavirus pandemic has left the private school bus industry in crisis, with some predicting “the end of the line.” The New York Times reports that “privately owned bus companies, which carry nearly 10 million children to school a year, account for roughly 40 percent of the school bus industry—and now are facing an unparalleled threat to their survival. In school districts that are adopting remote learning, bus companies worry about getting any income at all. In places that are returning fully to in-person instruction or a hybrid model, companies project increased cleaning costs and operational overhead expenses that will skyrocket because of the need to run more buses to ensure students remain socially distanced. In response, bus company owners and industry leaders are urging Congress to pass $10 billion in emergency aid to prop up school buses and motor coaches.” 

12) National: Politico has a piece looking at the positions of Donald Trump and Joe Biden on charter schools. “Trump cited school choice as a top second-term priority during a recent interview. The president’s signature school choice proposal, which has gone nowhere, would create a $5 billion federal tax credit for donations to scholarship-granting organizations to pay for students to attend private schools or expand their public education options.” 

As for Biden, his spokesperson Matt Hill “said the Democratic presidential nominee’s plan ‘will not close all charter schools,’ as Trump alleged during the GOP convention. But he said the plan is designed to do everything possible to help traditional public schools, ‘which is what most students attend. As president, Biden will ban for-profit charter schools from receiving federal funds,’ Hill said in a statement. ‘He will also make sure that we stop funding charter schools that don’t provide results. In addition, he will ensure that charter schools are held to the same levels of accountability and transparency as traditional public schools.’”

13) CaliforniaThe Santa Monica City Council has unanimously endorsed State Proposition 16, which would repeal Proposition 209 passed in 1996, banning affirmative action in public employment, public education, and public contracting for persons on the basis of race, sex, color, ethnicity, or national origin. “Eliminating barriers to affirmative action to increase opportunities for historically underserved or underrepresented groups aligns with Santa Monica’s longstanding values of equity and inclusion,” the council said in a press release.

14) Florida: State Democrats have targeted some hot school board races and have racked up key wins. “In Brevard County, another incumbent school board member, Tina Descovich, also was unseated by a first-time candidate, Jennifer Jenkins, who also said she’d fight against the push for more private school vouchers and the expansion of for-profit charter schools.” 

15) MarylandA Bowie school board member is questioning the exploding cost of a “public-private partnership” to build and maintain schools for decades in Prince George’s County. “District 5 Board Member Raaheela Ahmed said she does not like how the cost of the private-public partnership project is increasing over what she said board members were initially told, and the transparency of negotiations. ‘At the beginning we were at a nine hundred million dollar project, 30 million over 30 years. Now we’re at a place where, according to my calculations, it’s looking like it could be up to, if not more than, $1.165 billion,’ she said. She said the proposed cost is too much higher than a typical school. If the cost of ‘availability payments’ are limited to $30 million for 30 years, that would mean approximately $150 million would go toward each project.” 

16) South Carolina: The Sumter Branch NAACP has released a statement questioning approval of the new Liberty STEAM Charter School to operate in Sumter County beginning in the 2021 school year. “Based on the South Carolina education per-pupil funding formula, the Sumter School District would not be eligible for more than $518,000, which would be re-directed to Liberty STEAM Charter School in its first year of operation. The school expects to end up with a total school population of 976 students pre-K through 12th grade. Built out to 976 students would equate to $3,513,600 annually of taxpayer dollars directed to the school. The NAACP opposes privatization of public schools and public subsidizing or funding of for-profit and charter schools. The NAACP has historically been in strong support of public education, and we denounce any movement toward privatization that diverts public funds to support non-public school choices.”

Infrastructure

17) National: The perennial debate and battle over who is going to push risk off onto whom in infrastructure projects has survived the rather dramatic exit of several large firms from the “public-private partnership” sector in the past few years. Not surprisingly, the construction and finance industries have again returned to their rather traditional self-interested position that the public sector must take on more risk, though this time by loosening or ending the fixed-price aspects of EPC contracts in P3 agreements. Public Works Financing has a lead article this month mulling over the pros and cons. “There have been fewer exit announcements 2020,” PWF says, “but the market is still adapting to find an appropriate risk balance between public sponsors, concessionaires, and their EPCs. As with any market shift there are multiple issues at play, but clearly one of them involves some expectation adjustments occurring on the part of public sponsors.” [Public Works Financing, August 2020, sub required]. So, if fixed pricing disappears, is the public supposed to eat the cost overruns and looming losses that created the P3 crisis in the first place? Or engage in interminable dispute resolution? How are those Purple Line negotiations going, Governor Hogan?

18) National: Nick Sifuentes, executive director of Tri-State Transportation Campaign, a nonprofit organization fighting for sustainable transportation in New York, New Jersey and Connecticut, says that without public transit, there will be no economic recovery. “This spring, New Yorkers did the hard work, at great cost, of getting the virus under control. Now it’s time for Congress to do its part. New York’s economic output is almost as big as Canada’s. If New York were its own country, it would be the world’s eleventh largest economy. If the Senate and the White House fail to act responsibly and save transit, the long-term ramifications for our country’s business sector will be catastrophic. For a White House that has been singularly focused on reopening our economic engines, neglecting the transit that brings workers, tourists, shoppers and diners to our cities will doom a successful recovery.” 

19) Hawaii: Honolulu Civil Beat’s Frank Genadio is waving the red flag warning Honolulu not to sign a new “public-private partnership” contract for a rail system extension and a 30-year operations and maintenance agreement. “The primary reason for not signing a new contract is the ongoing U.S. Department of Justice investigation of the rail project, a follow-up to a directed state audit that was marred by a perceived lack of cooperation by HART. The residents of Oahu must see a full disclosure of the results of the federal investigation before accepting continuation of any activity on rail past Middle Street. At this point, we have no knowledge of whether or not any fines or possible criminal charges will ensue from that investigation. What if personnel currently involved in evaluating proposals from rail bidders are subjects of the investigation? The FTA should continue to withhold federal funding until we see a clear resolution of all the problems plaguing the project. At this point, we do not even know if there will be further investigative steps taken such as (what is usually referred to as) a forensic audit, one recommended by a former member of the HART Board.”

In an in-depth analysis of the project in its latest issue, Public Works Financing also seems to be, if not waving red flags, at least flashing yellow warning lights from the private side of the equation. “If HART is able to award the current P3, the concessionaire will face the challenge of rescuing a project in dire need of a win. The last phase will be the most difficult of the system, and the concessionaire will need to integrate with all of the past construction work. Local opposition, which has always been vocal, is at this point reaching a fever pitch. The future is very uncertain for this project, except, perhaps, the likelihood of more audits.” [Public Works Financing, August 2020; sub required]

20) Missouri: In a major victory for a labor-community coalition, a ballot initiative to privatize St. Louis Lambert International Airport has been pulled by its supporters. SEIU Local 1 says “Local 1 members came together with allies like STL Not For Sale, Coalition of Black Trade Unionists – CBTU Saint Louis Chapter, APWU – The American Postal Workers Union, Missouri Jobs with Justice, Organization For Black Struggle, St. Louis Democratic Socialists of America to defeat this bad deal for St. Louis working families.” 

Josie Grillas of STL Not For Sale says “what it tells us is what STL Not For Sale has been saying all along—that this is really a project that is only pushed by a few special interests, that it doesn’t serve the needs of St. Louisans and there is not grassroots interest.” In recent weeks, “her opposition coalition has grown substantial union support, including from the Greater St. Louis Labor Council, the Coalition of Black Trade Unionists, SIEU Local 1, Unite Here Local 74, American Federation of Teachers Local 420, the A. Philip Randolph Institute, the American Postal Workers Union St. Louis Gateway District and Communications Workers of America Locals 6300 and 6355. While Grillas said she’s pleased with this outcome, she cautioned it would be shortsighted to think the fight is over.”

21) West Virginia: How have privatization, corporate greed, captured public structures, political cronyism and environment deregulation come together to undermine a well-performing public water company? The tale is recounted by Dr. John David, director of the Southern Appalachian Labor School, professor emeritus of economic at West Virginia University Tech and an occasional columnist for The Register-Herald. 

“Suddenly, WVAW, sensing a profit opportunity, filed to intervene and the business-leaning PSC lent a sympathetic ear,” David reports. “Instead of approving a funded project set for construction and by this time could have been completed, the PSC ordered a take-over using the offensive fantasy of mismanagement by us. In fact, one of the three planned new filters that was installed has done an incredible job and, aside from a few short duration line breaks experienced by all systems, we have again provided quality water. (…) The proposal by WVAW is extremely problematic. The firm wants to push water from the contaminated New River with huge lines over a mountain for a gigantic cost and provide water at rates that are excessively high, with higher rates on the horizon.”

Criminal Justice and Immigration

22) National19 of the 20 largest COVID clusters are prisons or jails. “I am very concerned,” said Adamu Chan, an inmate at San Quentin State Prison in California, which has become one of the nation’s largest coronavirus clusters with more than 2,500 infections and 27 deaths. “There’s no way to social distance. We all eat together. We have a communal bathroom. There’s no way to address a public health issue in an overcrowded facility.”

23) National: Steve Bannon, Trump’s erstwhile extreme right strategist, was arrested for fraud related to his role in a privatized border wall scheme. “The indictment was unsealed by the U.S. Attorney’s Office for the Southern District of New York. Three other individuals were also arrested for their roles in the privatized border wall scheme that raised over $25 million, the federal prosecutors said, naming campaign leader Brian Kolfage, Andrew Badolato, and Timothy Shaw.” But there’s more. “Now it turns out that the president actually ordered Homeland Security to make a $400 million payment to the construction company linked to the border funding scheme. (He’s also reportedly been working with Bannon on re-election matters.)” Meanwhile, a new report reveals that the privately-built wall will fail. The next court hearing regarding the pending federal lawsuits is scheduled for this Thursday.

24) National: Democracy Now! reports that “immigrants detained at the LaSalle and Jackson Parish correctional centers in Louisiana are denouncing unlivable conditions inside the Immigration and Customs Enforcement prisons after Hurricane Laura battered the state. According to prisoners, the two facilities have flooded with urine and feces, don’t have electricity, clean food or water, and don’t have air circulation, forcing prisoners to sleep outside, many in their underwear.” 

Mother Jones has reported that “three women detained about an hour away at an immigration detention center in Jena, Louisiana, run by the private prison company GEO Group, said Monday that they had running water but not light or air conditioning. Kerlys, a Colombian woman who was part of a group that got pepper-sprayed by guards in April during a confrontation over COVID protections, said the heat was suffocating. María García, a 63-year-old from Mexico whose age makes her more vulnerable to COVID at the jail, described similar conditions.

Jorge Sarat, a Guatemalan man detained at another LaSalle detention center in Louisiana, said on Tuesday that his facility didn’t have electricity or running water for three nights. It was so hot that the detainees couldn’t sleep, he added. ‘It was horrible,’ Sarat said. ‘I thought we were going to die.’”

25) Texas/National: A dozen women at an immigrant detention center in Conroe operated for profit by GEO Group “have complained staff mishandled a fire evacuation in July and ignored or dismissed health complications they say they suffered in the days that followed.” 

Public Services

26) NationalThe Trump administration’s privatization of Covid-19 data tracking is wreaking havoc on the public health system during the pandemic. “The disclosure of the demand in April is the most striking example to surface of the department’s efforts to expand the role of private companies in health data collection, a practice that critics say infringes on what has long been a central mission of the C.D.C. Last month, the federal health department moved beyond financial incentives and abruptly ordered hospitals to send daily coronavirus reports to TeleTracking, not the C.D.C., raising concerns about transparency and reliability of the data.” 

27) National: Herbert J. Hoffman, president of Veterans for Peace Chapter No. 63, says that privatization puts the Veterans Administration and US Postal Service at risk. “Do not allow the (VAHS) to become another insurance company rather than a provider of health care. In the words of Will Fischer, a retired Iraq veteran of the U.S. Medical Corps, ‘Privatization is a fancy way of saying we’re taking tax dollars out of the VA and putting it into the pockets of millionaires and billionaires.’ This exact sentiment applies to the post office equally. Contact members of your congressional delegation and tell them to save our VA and the Postal Service.”

28) National: The federal government is spending massively on temporary workers, driving an outsourcing of good government jobs. “The NIH has dramatically increased its spending on staffing services over the past 10 years, from $1 million in 2008 to $95 million in 2018, according to an analysis of USASpending.gov data conducted by the National Employment Law Project. And NIH is not the only agency that has done so.” Paul Light, a contracting expert and professor of public service at New York University, says “we know nothing about these contractors, especially in the temp agencies. They come and go, come and go. I think that speaks to a blind spot, especially in a department like VA.”

29) Alaska: In a major victory for public health, the public interest and public unions, the private, for-profit company Wellpath ended its contract with the Alaska Psychiatric Institute in June. “The plan met backlash from critics of Wellpath’s roots in the private prison industry and scrutiny over the no-bid contract that led to the initial deal. The state pulled back, cancelling the long-term, no-bid contract and progressively decreasing the contract from $1 million monthly to $700,000 monthly and finally to $200,000 per month in the final quarter. So what did the $12.25 million the state paid Wellpath over the course of the 18-month contract pay for?” 

30) California: As California suffers through another brutally hot weekend and fires rage across the state, people are asking whether there is a better way to cope with this perennial problem—which is getting worse because of climate change—and change the private economic incentives and public strategies currently being used. “The only real path toward meaningful change looks politically impossible. Goulette said we need to scrap the system and rethink what we could do with Cal Fire’s annual budget: Is this really the best thing we could do with several billion dollars to be more resistant to wildfire? Goulette knows this suggestion is so laughably distasteful and naive to those in power that uttering it as the director of a nonprofit like the Watershed Research and Training Center gets you kicked out of the room.”

31) New York: As New York City Mayor Bill De Blasio warns of massive cuts in the city’s workforce, the city is still spending millions in consulting fees to some of the world’s biggest corporations. “The city should cancel contracts with multinational businesses like Deloitte and review the rest of the contracts with an eye to trimming or eliminating them, says NYC Councilman Ben Kallos, who chairs the Council’s Committee on Contracts. ‘Before we start threatening to lay off and reduce wages for city employees, we should trim the fat and cut these bloated consulting contracts,’ Kallos told The News.” 

32) InternationalOutsourcing firms are missing 46% of Covid contacts in England, the Guardian reports. “In the country’s 20 worst-hit areas, Serco and Sitel – paid £200m between them – reached only 54% of people who had been in close proximity to an infected person, meaning more than 21,000 exposed people were not contacted. (…) The figures will prompt further scrutiny of Serco and Sitel’s roles in running a large chunk of the system. The two private firms were paid an initial £192m for the first three months of the programme, with the value of the contract reaching £730m over 12 months. Their contracts had been due to expire on [August 23] but have been extended by the government.”

33) Think Tanks: In the new issue of New Labor Forum, University of Miami Prof. Max Fraser looks at the devastating effects of private equity on rural hospitals and the people they serve during the current public health crisis. Fraser describes the extent to which private equity speculation in healthcare networks has led to dozens of hospital closures across rural America. These closures have brought panic and tragedy to hundreds of patients “and their families in the midst of the pandemic. And Fraser reports that, with the formation of the powerful Healthcare Private Equity Association, private equity investment appears bound to continue profiteering from the decline in healthcare access.” Next month New Labor Forum will start a podcast, Reinventing Solidarity.

Everything Else

34) National: The Intercept has an unbelievable public-private tale of malfeasance and failure in the nursing home sector. “In August of 2018, the Department of Housing and Urban Development faced the biggest default in its history. Rosewood Homes, which operated a chain of nursing homes in Illinois, defaulted on a $146 million mortgage that was backed by HUD. (…) Then HUD took them over and spent $30 million maintaining and upgrading the facilities, and appointed a receiver to administer the homes. When the homes were ready to go back on the market, the buyer was Greystone, which had already managed over 30 nursing homes in Florida. HUD has refused to disclose the asking price, according to the New York Times. (…) Greystone also apparently maintained close ties to President Donald Trump. On the same day that bids were due in a federal government auction of the troubled $95 million Rosewood nursing home chain — May 31, 2019 — Greystone’s CEO donated $360,600 to the president’s reelection fund, Trump Victory, using a shell company that omitted his name.”

Where did this all lead to? “Greystone’s nursing homes have now become epicenters of death in the coronavirus crisis.” 

35) Alabama: Inside Climate News has an expose on a utility regulator, a very underreported sector. “The Alabama Public Service Commission, which regulates the investor-owned Alabama Power Co., not only rejected a petition by the Southern Environmental Law Center to end the company’s extra monthly fee for customers with their own solar systems, but raised that fee by 8 percent.” In South Africa, they call this “state capture.”

36) California: Harold Meyerson of The American Prospect offers a brief commentary on the disappointing end of the California legislative session, which failed to pass widely popular police reform and housing measures. “Part of the problem was the legislature’s inability to finish its work before its self-imposed deadline for adjournment,” says Meyerson, “which was exacerbated by having some legislators working remotely and also by Republican delaying tactics. But part was due to the baffling timidity of some Democrats to support such police reforms as stopping the practice of cities or counties hiring officers who’d been fired for brutality in other cities or counties. Part of it was due to the NIMBYism of some Democrats who blocked a bill that would have permitted duplexes—duplexes, O the horror!—in neighborhoods zoned solely for single-family dwellings.” For more dive into the hour-long wrap-up on the session by LA Podcast