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This Week’s Outsourcing Scan 10-10-2016

1) National: A week after the federal government announced $245 million in new grants to charter schools, the Education Department’s Inspector General reports that charter schools and their management organizations pose a potential risk to federal funds even as they threaten to fall short of meeting the goals of an array of programs. The IG directs department brass to come up with possible corrective actions within 30 days, and recommends the creation of a high level working group. U.S. News’ Lauren Camera reports that “the self-regulating nature of the proposals and other stances leading advocates in the sector have recently taken, like speaking out against poor-performing virtual charters, comes as the entire sector finds itself in the crosshairs of a burgeoning and wide-scale debate over whether charters are really the best option for the country’s most underserved students, namely students of color. Nowhere is that more on display right now than in Massachusetts, where voters are set to decide whether they support a ballot measure that would raise the cap on the number of charters allowed in the state.”

2) National: Donald Cohen of In the Public Interest reports that government outsourcing is increasing inequality by allowing for-profit corporations to charge people directly, often after tacking on fees. Failure to pay can land people in jail. “It’s illegal to be poor,” said David Jackson after he couldn’t afford a $100 fine for speeding. Collection had been outsourced to a private contractor, and his bill quickly ballooned to $2,200 with court costs, jail fines, and the contractor’s extra fees. [How privatization increases inequality]

3) NationalAnother security breach rocks contractor Booz Allen HamiltonThe New York Times says the incident “could renew scrutiny of the firm’s operations and, more broadly, the lucrative contracting business that American intelligence now relies on to run its vast, global surveillance operations.” Undeterred, the DIA awarded a new $143,931,988 five-year time and materials Enterprise Platform Services (EPS) task order to Booz Allen.

4) National: Dan Caplinger takes a look at Republican Presidential candidate Donald Trump’s position on Social Security. “One such reform would be to privatize all or part of the Social Security program. In his 2000 book The America We Deserve, Trump said, ‘privatization would be good for all of us. Directing Social Security funds into personal accounts invested in real assets would swell national savings, pumping hundreds of billions of dollars into jobs and the economy. These investments would boost national investment, productivity, wages, and future economic growth.’”

5) National: The GAO has issued a report on the limited role of “public private partnerships” in disposing of and managing excess real property. Michael G. Scheininger and Kayleigh Scalzo of Covington & Burling report that “despite recent high profile projects—such as the 60-year lease of the Old Post Office in Washington, DC to be converted into Trump International Hotel—the General Services Administration consider PPPs for fewer than ten cases each year. And while GAO identified three state governments that might use PPPs to dispose of unneeded real property, none was able to point to any recent instances.” [Report]

6) National: The American Postal Workers Union re-elects President Mark Diamondstein, who says “now is the time for unity as we fight a hostile Congress, corporate privatizers, Wall Street greed and some in postal management who are bent on destroying the Postal Service through piece-by-piece privatization and by degrading mail service.”

7) Arizona: Human rights, civil rights, and faith-based groups are demanding that Gov. Ducey launch an independent investigation of private prisons in the state. The American Friends Service Committee is leading the charge, and is backed up by 42 organization. including the American Civil Liberties Union, the National Association for the Advancement of Colored People, Arizona Jews for Justice, and a number of Arizona churches. “The State of Arizona does not currently have a statutory requirement to regularly monitor the cost, safety, performance and/or quality of the private prisons under contract, leaving elected officials and the public with no way to ensure that these prisons are safe or effective,” reads part of the letter.

8) ConnecticutDisabled clients worry about Gov. Malloy’s plan to privatize the state’s supportive living services program. Hakim Foster “remains skeptical. He and two other DDS clients who rely on the state services appeared in a new TV ad released Thursday by SEIU 1199, New England, the union representing the workers. They urge Malloy to reconsider the job cuts. [Debbie Albers, one of his helpers], who has worked for the state for 33 years, predicted the private sector workers will be limited to a set number of hours and won’t have time to go the extra mile for her soon-to-be former clients.”

9) Connecticut: After a tumultuous year, the Bridgeport school district renews Fran Rabinowitz’ contract. “There would be other clashes, including a board decision to stop recognizing the district’s Parent Advisory Committee when the group refused to allow parents associated with charter school groups to take leadership roles. Pereira, a charter school opponent who was on the executive board of the PAC, blames Rabinowitz for leaving it ‘in complete and utter shambles.’”

10) Illinois: If no agreement is reached, tomorrow the Chicago Teacher’s Union will go on strike. If they do, charter school teachers will be joining them. CPS teacher Dave Steiber says Rahm Emanuel’s choices have given them no other option. Among his reasons for striking: “privatizing our custodial and engineering staffs, which has led to filthy, germ infested schools.” [#faircontractnow]

11) Louisiana: Despite the concluding of an agreement between LSU and the contractor over the private operation of charity hospitals in Monroe and Shreveport, relations remain tense. The terms “provide a path for outside, independent arbiters to come in when LSU and the foundation known as BRF can’t reach agreement on basic areas like bill payments. (…) In case that’s not clear enough, the document spells out that BRF agrees “to resume and continue communications with any LSU designated representative”—an obvious indication that hasn’t necessarily been happening.” The contractor had never run a patient care facility before.

12) MassachusettsThe MBTA board votes to outsource the system’s cash room to Brinks. “Union representatives have strenuously opposed the move, and seven top officials at the Boston Carmen’s Union were arrested early Thursday morning outside the MBTA’s money room in Charlestown.” Lou Antonellis, president of IBEW Local 103, said “it’s private entities and corporate scum who want to feed at the public trough and this administration is jamming it down our goddamn throats.” Antonellis praised the seven top officials at the Boston Carmen’s Union who were arrested outside the money room. “Massachusetts AFL-CIO President Steve Tolman took aim at Gov. Charlie Baker, who has urged the T to seek outsourcing as a means of improving service and balancing its budget. ‘Charlie Baker isn’t fixing the T. He’s gutting it.’”

13) MassachusettsReplies were due on Friday for an RFP issued by the Town of Lexington “to perform a Compensation and Classification Study for approximately fifteen (15) positions within the Town’s DPW AFSCME union, which is composed of approximately 52 employees. Services are toinclude a market survey of comparable communities (and if necessary comparable positions in the private sector), a recommended compensation plan with salary ranges, conducting group meetings, interviews and presentations, reviewing job descriptions for correctness, reviewing positions for FLSA and ADA correctness and creating all work products in Microsoft Word and Microsoft Excel for end user convenience.”

14) Nebraska: The issue of charter schools has become part of a race between two Democrats to represent northeast Omaha in the state legislature. Jill Brown “said she is pro-public education and against charter schools, saying she worries that charter schools hurt public schools and don’t serve the most needy students. ‘It doesn’t seem like that should be what the state is investing in,’ she said. She also doesn’t support scholarship tax credits or vouchers. Brown said she wants parents in her district to get exactly what they want for schools, but the answer is not charter schools. She said she would be open to listening and understanding the community’s needs.” Her opponent, Justin Wayne, a former president of the Omaha Public Schools board, “does not support charter schools, saying they ‘are not even on the table for me’—despite his school board vote not to oppose them and his attendance at a charter school rally, both in 2015.”

15) New Jersey: Mary Grant, a water privatization expert at Food & Water Watch, warns that Gov. Christie’s plan to force Atlantic City to privatize its water system could lead to problems similar to those of Flint, Michigan. “Customers of private water companies routinely pay more for water, and under privatization the people of Atlantic City would lose democratic control of their water and rates, as the people of Flint did when an emergency manager made broad changes to the city’s source water in 2014 that resulted in widespread lead contamination.”

16) New Jersey: Charter schools feature in Princeton’s school board election. One candidate, Gregory M. Stankiewicz, “stressed the need for “local control” and advocated that future charter schools should not be allowed to open unless the host community wants them. Mr. Stankiewicz’s wife, Julia Sass Rubin, a Rutgers faculty member, helped start the advocacy group Save our Schools, and is an often-cited critic of charter schools.”

17) Ohio: The state’s dismal record on regulating charter schools has become an issue in the Senate race between Democrat Ted Strickland and state Republicans. “We are an embarrassment because even people who are strong advocates for charter schools understand the way they’ve been managed in Ohio has been pathetic,” Strickland said. Republicans had criticized him for saying that for-profit charter schools have “raped” Ohio taxpayers.

18) PennsylvaniaUnion members have set an October 15 strike date at Cedar Haven nursing home. The facility was privatized two years ago. Negotiations with the owner, Stone Barn Holdings, have been going on for months. “Steve Mullen, director for the American Federation of State, County and Municipal Employees Local 2732, blamed an unfair contract offer for the potential work stoppage. The contract offered a 25-cent-per-hour wage increase but replaced free health care coverage for employees with a plan that would cost $5,000. The contract also eliminates four personal days and changes the rules governing overtime, sick days and vacation days. Mullen noted that Stone Barn Holdings is a for-profit company and said it is trying to make a profit on the backs of dedicated employees.” Mullen says “the cuts this company wants are just very deep. Quite frankly, many of our members say if what they want is implemented, they will have to look for jobs elsewhere to support themselves and their families.”

19) Pennsylvania: State Auditor Eugene DiPasquale says the state’s pension [problems requires a state-level fix, rather than just focusing on “red flag cities.” But Villanova School of Business professor David Fiorenza uses the opportunity to say “it is time to look at more privatization and hiring freezes for all levels of municipal government. Surely the over 2,500 municipalities and 67 counties in Pennsylvania shows significant coverage of government for the taxpayers of this state.” [Sub required]

20) Pennsylvania: The City of Chester is seeking a private partner to work on a $50 million upgrade of the town’s stormwater runoff system. “In addition to improving its stormwater systems, Chester said the project aims to provide other community benefits including job creation, public health improvement, energy savings and economic growth. The PPP Chester is seeking is a 30-year contract with a private sector partner to update and maintain a total of 350 acres of green infrastructure stormwater controls that meet regulatory demands and improve water quality.” Proposals are due October 24. [Sub required]

21) Tennessee: The chairwoman of the Nashville school board, Anna Shepherd, urges the state board of education to uphold her board’s  rejection of an application by Rocketship, the national charter school chain, to open another school. “Earlier this summer,” she writes, “the school board rejected this application primarily because two existing Rocketship schools—each funded with about $5 million in local and state tax dollars—are the two worst-performing charter schools in Nashville. Moreover, they are among the bottom 3 percent in the state in terms of student achievement.”

22) Tennessee: How a tough campus workers union is fighting back against Gov. Haslam’s scheme to privatize—in a “right to work” state. United Campus Workers (Communications Workers Local 3865) activist Josh Smyser says “of all the workers on a campus, we’ve found facilities workers to be some of the toughest to organize. They cover a variety of shops—carpentry, air conditioning, electrical, painting, custodial, housekeeping, and clerical and administrative support staff. They tend to be a tight-knit group, and sometimes insular. But this crisis inspired record numbers of facilities workers to mobilize, and many to join the union.”

23) Tennessee: While praising efforts by wealthy parents to contribute to rehabilitating White Station High School, the Memphis Business Journal says Memphis’ public needs shouldn’t require private funding. “But, the real question may be: Why do they have to do this at all? Municipalities seem now addicted to shirking their responsibilities in favor of assistance from private industry. There are a handful of basic things that we should expect from our public leadership, and education and law enforcement are at the top of the list.”

24) Texas/NationalThe Texas Observer shares an infographic on private prisons in the state. Patrick Michels writes, “In August, the U.S. Department of Justice said it would phase out its contracts with for-profit prisons, citing safety concerns, low quality of care and high costs. Shortly after that, the U.S. Department of Homeland Security announced that it would ‘review’ whether to maintain its immigrant detention contracts. Activists celebrated the news and the stocks of private prison companies plummeted. Texas has been host to many of the facilities that could be closed, though they represent just a fraction of all the private prisons in Texas.”

25) UtahThe issue of land privatization has entered the congressional race in the Utah 1st. Incumbent Republican Rep. Rob Bishop “applauds moves by the Utah Legislature to spend up to $14 million to sue for control over federal lands in Utah, while [his challenger, Democrat Peter Clemens], opposes it. “‘It’s a bridge to nowhere,’ Clemens says. ‘There is no chance the federal government is going to turn those lands back over to Utah.’ He also distrusts those pushing the lawsuit. ‘I believe that the interests of some of those people are to privatize that land. I think there would be decreased access for recreation, for backcountry use.’”

26) International/Revolving Door News: The Ontario Health Coalition is warning that privatization of Ontario’s health systems for patient records and information will incite massive public opposition. The coalition doesn’t trust a banker, Ed Clark, who has been appointed by the Wynne government to assess the proposal. “Clark is the former President and CEO of TD Bank—a bank deeply involved in P3 privatization in Ontario. TD’s economics branch was used by the McGuinty government to generate a pro-privatization health care report. The former head of TD Economics, Don Drummond, wrote the pro-privatization and pro-public-service-cuts Drummond Report. Top former and current leaders of Infrastructure Ontario—the P3-privatization entity of the Ontario government—have come out of TD. Ed Clark recently recommended the deeply unpopular privatization of public hydro in Ontario. He is the father of Bert Clark, the current President and CEO of Infrastructure Ontario.”

27) Think Tanks: New research on welfare privatization illustrates how the process often curtails and undermines public responsibility for the poor. Writing in Law & Social Inquiry, John N. Robinson says “my findings show that as legislative and administrative reforms steered courts toward a more flexible understanding of public responsibility, courts gave increasing attention to the economic hardships experienced by the state itself, while downplaying the plight of low-income tenants.” [Sub required]

28) Think Tanks: New research out of Texas Tech warns that any idea to privatize police forces must be approached with great care. “This research reviews key issues in the privatization of local police services by discussing economic and political pressures for police privatization and concerns regarding the quality and accountability of privatized police. In particular, the authors explore whether the cost-efficiency sought from police privatization outweighs a critical side effect of a growing confusion regarding police oversight and significant uncertainties in accountability.” [Sub required]

Legislative Issues

1) Illinois: A joint resolution from Illinois’ House and Senate is needed before the state DOT can issue a RFQ for a $425 million “public private partnership” to mitigate traffic congestion on I-55. “IDOT may procure the project using the design-finance-operate-maintain model, or it said it could use other delivery methods. The project will build two express toll lanes in each direction within the existing I-55 median, while the existing three general purpose lanes in each direction will remain free of charge.” [Sub required]

2) WisconsinRepublican lawmakers are floating a plan for private funding of K-12 school expenses. “What’s known as Education Savings Accounts would be set up for parents to pay for tuition, textbooks and tutoring, according to a proposal in the Assembly Republican caucus agenda for 2017, released last month. The accounts—dubbed the next generation of school vouchers by education policy experts—would add an option for Wisconsin parents, who already have a variety of alternatives to their designated public school, including open enrollment to other public schools, voucher-assisted private schools and independent charter schools. Critics say the accounts represent the latest attempt to erode public schools.”


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