Update: Upcoming Outsourcing Issues. January 5, 2015
1) National: A private contractor is claiming that it owns the names of a number of historic landmark sites in Yosemite National Park, which the National Parks Service disputes. “Park concessions are under contract to DNC Parks & Resorts at Yosemite, a subsidiary of Delaware North, a privately held Buffalo, N.Y., company that also operates concessions at more than 30 airports, 60-plus sports and entertainment venues and a number of state and national parks. DNC Parks has told park officials it owns the names and should be paid up to $51 million for them if another company takes over the concession contract.”
2) National: The Bond Buyer takes an in-depth look at the market for “public private partnerships” in 2015. Jonathon Gifford, director of the Center for Transportation Public-Private Partnership Policy at George Mason University, says Congressional inaction on infrastructure spending will spur P3s. “I don’t think we’ll see a dramatic change in the U.S. P3 market in 2015. We might see more P3s expanding into other applications, such as government buildings. Money is not just tight for transportation, it’s tight for other government functions.” P3s accounted for only 1.5% of spending on road projects from 1989-2013. [Sub required]
3) National: New census numbers will lead to an increased capacity for states to issue private activity bonds (PABs). Texas and Florida will see the greatest increase, while Illinois and Puerto Rico, which experienced population declines, will have a smaller amount of new capacity.
4) National: Henry Giroux looks into the forces driving education privatization. “As public schools are privatized, succumbing to corporate interests, critical thought and agency are erased, and education emphasizes market values rather than democratic ideals.”
5) Connecticut: Jonathan Pelto looks into the way information about a charter school scandal was released. “Now, months after the investigation was called for, an incredibly damning report has been made public. But in typical move designed to limit political fall-out and protect the guilty, Governor Malloy’s State Department of Education failed to lease the stunning report until late in the afternoon on Friday, January 2, 2015.”
6) Kentucky/National: Danny Weil digs into the lack of transparency by financial firms that manage state teachers’ pension funds in Kentucky and elsewhere. “Although some of the fine print of the public-pension investments has occasionally oozed through to pensioners, the agreements are tightly retained in the majority of states and cities where teachers work, live and breathe. Reviewers say such secrecy prevents lawmakers and the public from evaluating the propriety of the increasing fees being paid to private financial firms in the interest of privatization of pension-fund-management services. Transparency and open public records are now a thing of the past.”
7) Maryland: Sanitation workers continue their strike against Montgomery County private contractor Unity Disposal for higher pay. “Nearly seven months ago, workers at the plant, which serves nearly 60,000 residents in suburban Washington and central Maryland, voted to join the Laborers International Union of North America (LiUNA). Workers at the plant make a daily rate of $84 for a helper and $120 for drivers, roughly a quarter the amount a worker needs in order to live comfortably in the Washington, DC region.”
8) Missouri: The Highway and Transportation Commission recommends tolling 200 miles of interstate highway to help fund the expansion and improvement of I-70 as either a “public private partnership” or public project. “Options outlined in the report include an arrangement in which a public entity would issue the debt needed to fund the project as well as a long-term concession almost entirely financed by private partners.” Missouri is one of only three states authorized to toll interstates under an FHWA pilot program. [Sub required]. Columnist Bob Satnam opposes the toll idea, instead proposing a tax increase.
9) New Jersey/New York: Govs. Christie and Cuomo propose privatizing the PATH train linebetween New Jersey and New York, and shutting down service between 1 a.m. and 5 a.m. The ideas provoke forceful opposition. “‘This is one of the dumbest ideas that has been proposed in the last six years and again illustrates how out of touch the leadership of the Port Authority and Trenton is with the both the economic needs of state residents and the day to day demands of New Jersey’s working families,’ said Jersey City Mayor Steven Fulop.”
10) New Jersey/New York: Panel proposes a massive sell off of the Port Authority’s real estate assets. “John Degnan, Port Authority chairman, told the Wall Street Journal, ‘We’ve spent billions of dollars to build the World Trade Center—I’m not getting rid of it on a fire sale.’ He told the newspaper he believed it would eventually be a ‘profitable venture’ for the Port Authority.”
11) New Jersey: A bill that permits municipalities to privatize their water systems without a public vote is on Gov. Christie’s desk awaiting his signature. “Activists don’t disagree that more needs to be spent on the state’s water infrastructure, but they say that should be the responsibility of the state, not private companies. Christie cut $85 million from the Department of Environmental Protection’s 2014 budget, limiting the amount the agency can spend on water infrastructure improvement projects. And he has offered property tax rebates and tax caps that critics say starve the state’s infrastructure budget.”
12) New Jersey: The Asbury Park Press says “for a governor who came to office touting transparency and accountability, [Gov. Christie] spent a lot of energy fighting attempts to shed light on deals to privatize public services and a small fortune defending himself from lawsuits over open records.”
13) New Jersey: Jersey City Mayor Steve Fullop and the Newark Star-Ledger denounce Gov. Christie for moving to privatize Liberty State Park by transferring control from the Department of Environmental Control to the Meadowlands commission. The provision was quietly slipped into a bill the week before Christmas. “So you can see why skeptics believe that the backdrop for our most universal symbol of freedom, the Statue of Liberty, is one signature away from being transformed into, say, a polystyrene monument to glitzy showgirls and Fat Elvises and roulette wheels.”
14) New York: Nassau County turns over control of its massive sewage treatment plant to a private company. “So far, only 10 DPW employees, all members of the Civil Service Employees Association, have taken the offer to leave county service and sign on with United Water because of their reluctance to give up county benefits, particularly their state pensions, said CSEA president Jerry Laricchiuta. Another 20 DPW workers are completing employment paperwork with United and will begin working for the company within the next two months, said Gary Albertson, vice president and general manager of United Water Long Island.” [Sub required]
15) New York: New York City issues a request for information from potential bidders for mobile payment options for parking tickets. “City officials have been moving slowly on parking technology enhancements over the years, possibly to avoid the kind of fallout seen in Chicago, where many taxpayers believe then-Mayor Richard Daley’s $1.15 billion, 75-year public-private partnership deal for parking meters sold taxpayers short.” Responses are due January 15. [Sub required]
16) Pennsylvania: Following the placing of York’s school system in receivership, privatization looms. Receiver David Meckley, “president and owner of Strategic Advantage Inc., could proceed with his goal of turning all district schools into charters under a privatization draft agreement with Charter Schools USA of Fort Lauderdale, Fla., a proposal the local school board tabled in November. ‘It is possible that the judge’s decision could lead to the privatization of the entire district to a charter school, but we expect the move to be contested.’ Kozlik wrote in a commentary.” Unions are opposing the idea. [Sub required]
17) Pennsylvania: David Fillman, executive director of AFSCME Council 13 in Swatara Township, refutes the case for privatizing the state’s liquor stores. “The PFM report also estimated that the state would have to come up with $408 million in new revenue each year to make privatization fiscally neutral. The report does not provide any guidance on how, exactly, the state will make up that shortfall. There is no pot of gold at the end of the privateer’s rainbow and thousands of jobs will be lost. PFM says that at least 2,302 full-time equivalent employees who work for the PLCB will go on unemployment.”
18) Texas: The state HHS commissioner continues to push for the privatization of Terrell State Hospital. “In October 2013, The Joint Commission ranked the Terrell hospital as one of the top third hospitals in the nation accredited by the commission. “‘If you read what Janek’s spokesperson said, it is all about improving care,’ Booth said on Tuesday. ‘Geo Care has never had a survey that ranked the company this high.’” A state lawmaker is opposing the privatization.
19) West Virginia: The state gets its first road “public private partnership,” a three-mile section of the Coalfields Expressway. The project moved forward under 2013 legislation.
20) International: The Ontario Public Service Employees Union will rally today to build public support for its position in contract negotiations. “Among the contract issues are wage disparity with other agencies, a two-year wage freeze and privatizing government services.” The union received a strike mandate last month.
21) Revolving Door News: David Meckley of Strategic Advantage Inc., the pro-privatization receiver for York’s financially troubled school system (see above), was “previously the chief recovery officer under Pennsylvania’s workout program for distressed school districts.” [Sub required]
Legislative Issues:
1) National: The new Republican-controlled 114th Congress may loosen rules on municipal financial advisors. “‘I don’t know that the Republicans have a clear sense of what they want to do,’ said a House staffer who asked not to be identified. ‘You’re going to have a more conservative Congress.’ [SIFMA CEO] Bentsen said earlier this year that SIFMA would like to see Congress reexamine the MA rule to allow more freedom for investment bankers to contact issuers without having to become MAs and lose their ability to underwrite the resulting bonds.” [Sub required]
2) National: As the new Congress convenes, tax reform legislation will be on the agenda, including a possible reduction or elimination of municipal bond exemption. “I think the muni bond community needs to properly define what the use of proceeds of municipal bonds are, and how the economic activity that occurs as a result of the issuance of tax-free municipal bonds would be curtailed if the tax exemption were further restricted from current law,” said Micah Green of Squire Patton Boggs.
3) Montana: A battle over the future of public education is shaping up in the state legislature as two supporters of charter schools will take over the House Education Committee. For now, Democratic Gov. Steve Bullock is likely to block their efforts. “‘They probably see themselves one governor away from having what they want: to privatize Montana public schools,’ said Eric Feaver, head of the Montana Education Association-Montana Federation of Teachers.”
4) New Jersey/New York: Govs. Christie and Cuomo oppose greater accountability at the troubled Port Authority. “The veto threats drew criticism from lawmakers in both states including New Jersey Assemblywoman Valerie Vainieri, D-Bergen, who issued a statement emphasizing the bipartisan support achieved for the reforms. ‘It’s appalling and disappointing that these basic common sense bills were not signed into law, especially considering the serious problems we’ve seen at the Port Authority under these governors,’ said Vainieri, one of the sponsors of reform legislation. ‘The Legislatures of New Jersey and New York crossed party lines to pass Port Authority reform. The governors crossed party lines to obstruct it.’” [Sub required]. The Journal News denounces the governors for caving in to power and money.
5) New York: The battle for education funding between advocates of public and privatized education kicks off as teachers protest in Albany, demanding adequate funding for public schools and challenging the drive toward charterization. “The annual battle over public education funding in New York will pit teachers and school boards against a strong charter school lobby with deep pockets and backing from Democratic Gov. Andrew Cuomo, who is talking about breaking what he calls the public school ‘monopoly.’”
6) Pennsylvania: Although incoming Gov. Wolf (D) and the Republican legislative leadership will be at loggerheads over their priorities, “one area where there seems to be considerable and growing agreement is with transparency and open government. (…) Work to tighten the gaping loopholes in the Right-to-Know Law also would be an area where both sides of the aisle should be able to find common ground. And work toward accountability for all government spending to be posted online and timely also has a lot of traction.”
7) Wisconsin: A Republican lawmaker is exploring the possibility of creating a school “recovery district” in Milwaukee, opening the door “for privatization of schools if charter school management companies take over.” The Milwaukee Journal Sentinel reports “conservative-leaning organizations such as the Wisconsin Policy Research Institute have championed the idea of a recovery district in Wisconsin in recent years. The Metropolitan Milwaukee Association of Commerce hosted private meetings on the concept in fall 2013. Those meetings featured speakers from Louisiana and Tennessee.”