This Week’s Outsourcing Scan 3-28-2016

1) National: Wall Street investors spring into action to see how they can make money off the multiple water problems facing the U.S. “In the future, we think that there will be more [public private partnership] activity on the water-side. It is an important topic and we wanted to bring in different water systems to tell their stories,” said Jamison Feheley, managing director and head of public finance banking for JPMorgan. “There were 450 total attendees, including 137 investor attendees representing more than 80 companies. 65 different issuers and keynote speakers presented and participated in one-on-one meetings with investors. There were also approximately 350 one-on-one meetings.” [Sub required].
2) National/IndianaThe GEO Group is back at it, trying again for a Gary immigration detention center. Four months ago, GEO Group withdrew its efforts after encountering stiff public opposition—protesters filled the council meeting. “On April 12, it will ask the Board of Zoning Appeals for a use variance for the same property, northwest of the airport. The meeting is scheduled for 3 p.m. at City Hall, 401 Broadway.”
3) National: Adding fuel to widespread criticism of the private, for profit education sector, a California judge has rendered a $1.2 billion judgment against bankrupt Corinthian Colleges for misleading students with false advertising and violating the law. “For years, Corinthian profited off the backs of poor people—now they have to pay. This judgment sends a clear message: There is a cost to this kind of predatory conduct,” California Attorney General Kamala Harris said in a statement.
Last week, the federal government announced it is offering more debt relief to students who attended Corinthian schools. The relief will cover an additional 91 campuses in 20 states. “In a statement on Friday, the education department also called on Congress to enact stronger rules to protect students and taxpayers from predatory colleges. It urged lawmakers to improve oversight of for-profit colleges and to ensure that the executives of fraudulent schools, not taxpayers, are held financially responsible.”
4) National: The Federal Highway Administration is inviting bidders for one of its grant programs “to experiment with user-based transportation funding mechanisms that go beyond the traditional gasoline tax.” States “can use the competitive grants to refine existing pilot projects or help launch new ones. A proposed user-based revenue mechanism, which cannot be a toll, must consider personal privacy and the use of private vendors to collect the fees, FHWA said.” [Sub required]. 
Critics of vehicle tracking mileage monitoring, which is being pushed by road companies and right wing think tanks, have expressed concern about “big brother” implications. One Maryland lawmaker says “I believe this is, first and foremost, a privacy issue. The government has no business learning where law-abiding citizens are driving or how often they use their cars.”
5) National/InternationalThe State Department has established an advisory committee on ‘public private partnerships.’ “The Committee will be managed by the Secretary’s Office of Global Partnerships. It is anticipated that the Committee will meet on at least an annual basis. The Committee may be comprised of up to twenty-five distinguished citizens from the private sector, philanthropy, civil society, diaspora groups, think tanks and academia, providing the Secretary with a fresh perspective and insight apart from, and independent of, the State Department organization. It will not perform the function of any existing Department staff or committee.”
6) NationalThe Army is looking for more ‘public private partnerships’ to build and operate renewable energy projects. “The Fort Hood project is just the beginning of the Army’s push for renewable energy P3s, said Katherine Hammack, assistant secretary for installations, energy and environment.” [Sub required]
7) Colorado/National: A coalition of environmental and civic groups has filed a federal lawsuit to block the $1.8 billion I-70 “public private partnership” rebuilding project. The Sierra Club, Citizens for Greater Denver, and two neighborhood groups “are suing the federal Environmental Protection Agency and director Gina McCarthy over revisions last year to the Clean Air Act. They contend that the I-70 project would not have been eligible for federal funding under earlier guidelines that regulate particulate pollution levels, but the EPA relaxed the rules in November. (…) The environmental groups said that the EPA revisions were issued with no public notice and are too lenient.” [Sub required]
Streetsblog’s David Sachs calls the I-70 P3 project a “boondoggle which will increase traffic and create more air pollution for generations to come if it’s built.” [Public interest groups’ Petition for Review of EPA Guidance]
8) IowaThe Mayo Clinic will no longer accept Iowa Medicaid after privatization takes effect this Friday. “The three managed-care companies that will run the state’s Medicaid program told lawmakers this week that they haven’t been able to negotiate contracts with Mayo’s well-known hospital system, located just across the border in Rochester, Minnesota.”
9) Kansas: The Wichita school board is planning massive budget cuts, and may outsource custodial jobs. The right-wing Kansas Policy Institute, which has been funded by the Friedman Foundation for Educational Choice, the Charles G. Koch Foundation, State Policy Network, and Donors Capital Fund, is calling on the district to make even deeper cuts and to privatize more services. Kansas, which is undergoing a severe budget crisis because of Gov. Sam Brownback’s sweeping tax cuts, is currently involved in a heated legislative debate over state aid to schools. [Seth Meyers on Brownback’s tax and schools cuts]
10) KentuckyGov. Bevin doubles down on his plan to privatize the state parks.
11) Maryland: Writing in the Baltimore Sun, Michael Corbin says school privatization may be fostering “apartheid schools.” He writes, “Baltimore has created a large portfolio of charter schools that in many ways increases racial separateness in the district. ‘Charter schools are more racially isolated than traditional public schools in virtually every state and large metropolitan area in the nation,’ the CRP says in the report Choice Without Equity: Charter School Segregation and the Need for Civil Rights. Baltimore has no desegregation requirement for its charter schools, nor does the city have many ‘diverse’ charters. My students at Reach are the ones the criteria schools won’t teach and most charters don’t want. They have no ‘free choice.’”
12) MichiganPrison food service contracting woes continue despite changes. 1,000 inmates at Kinross Correctional Facility protested the poor quality of food provided by Trinity Services Group, which took over last year from Aramark after a similar series of food service and other problems. “Anita Lloyd, a spokeswoman for the Michigan Corrections Organization, said the union was concerned by the scope of the protest.” 
Last week, University of Michigan researcher Roland Zullo released a report examining food service privatization in the state—and found poorly run, unclean kitchens. “Ultimately, Zullo believes that returning to the state-run system would be more efficient. ‘The contractors that came in had sole-supplier agreements with companies outside this state,’ he said. ‘The Michigan Department of corrections spends anywhere from $35 to $38 million annually on food and supplies. We lost that revenue that could have gone to local businesses and farms.’”
13) MichiganSavings from privatization promised by state officials are nowhere to be found. “Now, slammed with a scathing February audit that documented the mishandling of neglect and abuse reports and said the contractor, J2S Group of Grand Rapids, did not meet staffing requirements 81% of the time, lawmakers and administration officials say they are scrambling to assure ‘our heroes’ are getting adequate care. But the planned remedies—another pay hike for the contractor and bringing in more oversight—could mean higher costs to care for the veterans than existed before the privatization push.”
14) Michigan: The director of the charter school authorization office at Central Michigan University calls on charter school authorizers to become accredited. “As the charter school movement continues to grow, accountability for schools and authorizers must remain a central focus. Michigan is pioneering charter authorizer accountability through accreditation. We encourage other states to follow suit and establish an accreditation system as the standard for successful charter school authorizing. Accreditation ultimately leads to what matters most — better educational outcomes for students.”
15) Minnesota: Bluestem Prairie reports that Corrections Corporation of America, which is angling to reopen Appleton prison in the face of strong opposition and a veto threat from Gov. Dayton, has hired former congress member Dick Gephardt as a state-level contract lobbyist.
Gephardt is a former Sodexo lobbyist on labor issues, and has also lobbied at the federal level for the National Association of Manufacturers, Corinthian Colleges, Peabody Energy, the Water Quality Association, Waste Management, Goldman Sachs (on Dodd-Frank) and the National Association of Professional Employer Organizations, among others.
16) MinnesotaElk River school custodians dodge outsourcing, for now. “While custodians did not agree to anything that would allow the district to outsource the services of full-time employees, the two sides did come to terms a memorandum of agreement regarding part-time grounds and custodial crews. The agreement prohibits the outsourcing of full-time custodial work for the time period of July 1, 2015, through June 29, 2017. The district will continue to review and move forward with the requests for proposals for grounds.”
17) MissouriResponsible contracting and oversight pays dividends in better service and staff relations. The Columbia School District has reviewed the service it has gotten over the past year from Student Transportation of America, which took over from First Student. It says driver morale has improved after STA introduced pay raises every year (instead of after seven years previously). There have been some parent complaints, but “STA has been a significant improvement over the almost daily complaint from parents last year.” The drivers are represented by the International Brotherhood of Teamsters Local 833. Kirk Wilkie, vice president of operations for the STA’s central region, says of the union “we have a real good working relationship with them.”
18) Nevada: The state charter school authorizer is considering shutting down several online K-12 schools because of their low graduation rates. “The state argued the schools were consistently under-performing while school leadership insisted it should have been given more time to improve student progress and to properly respond to the poor performance accusations.”
19) New HampshireNashua mayor Jim Donchess urges the school board to reverse its decision to outsource the jobs of its custodial staff, which would leave 101 workers without a job. Local 365/Council 93 of AFSCME has filed a complaint with the New Hampshire Public Employee Labor Relations Board.  “Savings” in the four bids come from cutting health benefits and pensions. “Donchess claimed that school officials may not see all of the savings and benefits they expect from privatizing custodial work. With the current custodians working a combined 4,000 hours a week, at least one of the bids received indicates 2,600 to 2,700 hours a week of custodial work.”
20) New JerseyPlainfield School District fires its custodial staff effective June 30, and may outsource their jobs. “The potential outsourcing has been met with heavy criticism and rallying by Plainfield Association of Support Staff members, who have said outsourcing reduces local control, the savings from it will not be realized,” and the current system guarantees safety.
21) New York: The controversy over Success Academy, the for-profit private charter school chain, deepens. The company’s lawyers, hoping to get ahead of the scandal, have sent out a memo to staff “with a new list of twenty ‘mistakes’ the charter network’s staffers should be careful to avoid,” including “providing any information—even seemingly innocuous facts—to journalists or politicians, engaging in arguments with parents over text message or email and informing the network’s legal team too late about accusations against teachers or students.” The memo also warns against “letting parents get away with threats to go to the press/police/elected official.”
Peter Greene reacts to the memo by saying it “proves, once again, it is not a public school,” and that “Moskowitz is a woman who always seems one bad lapse of impulse control away from barking, ‘Do you know who I am!!??’ Most recently the chain hired the same PR firm that has tried to paper over the Flint water crisis.”
Four New York City parents of former Success Academy students are demanding that Gov. Cuomo stop funding Success Academy and increase accountability of charter schools. “They are calling on the governor to hold Success Academy, and by extension all charter schools, accountable by supporting a state Assembly proposal to create a code of conduct for charters and to have schools provide annual discipline reports.”
22) New York/New Jersey: The Port Authority approves a $4 billion ‘public private partnership’ lease with developer LaGuardia Gateway Partners to build and operate a new Terminal B and construct a central hall and connecting concourse and other infrastructure. “Under the P3 arrangement, LGP will design, build, operate and maintain the airport facility. Risks of cost overruns or schedule delays will be transferred from the Port Authority to LGP, which was selected after a competitive request-for-proposals process.” [Sub required]. LGA includes Skanska, Walsh, Meridiam, Parsons Brinckerhoff, and the Vantage Airport Group (Vancouver).
23) OhioWith an April 8 deadline looming, no one has applied to be state education commissioner yet. “Republican Gov. John Kasich’s former education adviser left after criticism about the Department of Education’s rigging of charter school sponsor evaluations and state efforts to take control of the failing Youngstown school district.” This is the fifth search in eight years.
24) Oregon: The state supreme court has approved language for a ballot proposal on liquor privatization this November. “But the clash between grocers concerned with their bottom lines and small distilleries worried about shelf space at big grocery chains that often arises from privatization efforts is playing out again in Oregon. Oregonians Against the Takeover (…) argues liquor costs would soar as they have in Washington state, which privatized in 2011 and now has prices that are among the highest in the country. It also says the measure would create a gaping hole in revenue for many public services.”
25) Pennsylvania/Delaware: A for-profit food service contractor with Philadelphia charter schools and the Delaware County Courthouse cafeteria is indicted. “Finally, the indictment charges that Dolce conspired with others to steal money directly or indirectly from the U.S. Department of Agriculture because he falsely inflated claims for reimbursement for meals served to qualifying students at charter schools between April 2011 and January 2014.”
26) Texas: The Public Utility Commission grants approval for a Dallas oil family to buy and reshape Oncor, the state’s largest electric utility. “Thursday’s order added a litany of complicated conditions seeking to minimize risks for Oncor and its roughly 3 million power line customers in North and West Texas. The commission also delayed answering the most contentious question related to the deal: whether the new Oncor would be forced to share with ratepayers a piece of the roughly $250 million in annual tax savings, and if so, how much. That became a matter for a separate proceeding.”
27) Washington: Washington State University issues a Request for Qualifications from potential private partners in a mixed-use development on its Pulliam campus. The deadline for responses is May 17. [RFQ]
28) International: The chair of Australia’s Prisons Public Service Association, Steve McMahon, has accused the New South Wales Minister of Corrections, David Elliot, “of secretly scheming about how he could potentially privatise the whole [prison] sector.” McMahon says, “the sad thing is, prisons are not something that the government should dump responsibility of. It is part of the whole law and order process and it should always remain the complete responsibility of the government. Too many things have been proven to go wrong.”
29) International: Kishore Singh, the United Nations special rapporteur on the right to education, urges Liberia not to privatize its primary education system to a for-profit company. “Such arrangements are a blatant violation of Liberia’s international obligations under the right to education, and have no justification under Liberia’s constitution,” the Special Rapporteur stated. Singh said “provision of public education of good quality is a core function of the state. Abandoning this to the commercial benefit of a private company constitutes a gross violation of the right to education.
30) Think TanksDiane Ravitch takes on the Center for American Progress for “making fun of people who don’t like the Common Core standards.” Peter Greene weighs in to denounce CAP for producing “a whacky new video that hilariously makes fun of a bunch of criticisms of Common Core that nobody has ever made.”
Legislative Issues
1) National: Wall Street players and their lobbyists meet with Republican lawmakers behind closed doors to discuss tax breaks for ‘public private partnerships.’ “At the roundtable discussion, several executives from investment banks provided information about P3s to members of Congress. They included Chris Hamel, the managing director and head of municipal finance for RBC Capital Markets; Stephen Howard, the director and head of infrastructure project finance for Barclays Capital; Howard Marsh, the managing director of municipal securities for Citigroup; and Michael Decker, a managing director and co-head of municipal securities for SIFMA.”
2) District of Columbia: The city council debate this session on Mayor Muriel Bowser’s just-introduced budget will include whether or not the city should terminate Corrections Corporation of America’s operation of DC’s Correctional Treatment Facility. “In her State of the District address [last] Tuesday, Bowser laid out a case for the takeover, saying it would allow the city to better manage space, bring back inmates from federal prisons more quickly and provide support programs to inmates before they are released.”
3) KentuckyA business-backed bill to allow ‘public private partnerships’ passes the Senate. It now goes back to the House, which will consider Senate revisions. “State parks also could benefit from an infusion of private financing for improvements, supporters said. Opponents warned the partnerships would result in government abdicating some of its basic responsibilities to private sources, at the potential detriment to taxpayers. ‘In order to have a public-private partnership, you have to have a profit,’ said Sen. Wil Schroder, R-Wilder. ‘And make no mistake about it, the people of Kentucky will pay more with “P3” legislation.’ Sen. Robin Webb, D-Grayson, warned that the agreements could result in ‘contractual constraint’ for participating governments ‘that could tie our hands for decades. What are we giving away in this process?’ she asked.
4) MassachusettsThe debate over charter school funding has heated up on Beacon Hill. “Campaigns on both sides of the issue are preparing to take it to the ballot in the fall, if the legislation is instead passed to the voters. Their names reflect a fight for education—Great Schools Massachusetts, pushing for more charter schools, and Save Our Public Schools, hoping to keep the cap.” The question will go to a ballot if Gov. Baker’s proposal is rejected.
5) New HampshireA public hearing will be held this Wednesday on ‘public private partnership’ legislation. The bill “relates to public private partnerships for intermodal infrastructure and transportation, establishes the public private infrastructure oversight commission, authorizes the commissioner of the department of transportation to enter into certain contracts with private entities, allows for the sharing of resources to finance, design, build, operate, and maintain intermodal transportation infrastructure projects, provides for securing and maintaining a liability insurance policy for contractors and engineers.”
6) Pennsylvania: After a bitter, months-long battle, the state finally has a budget deal. “Republicans warded off higher taxes, but also came away from the fight without liquor privatization, changes to the debt-ridden state pension systems, or property tax reforms.” But all of those issues will come back in the 2016-17 budget talks that start this week, “so the entire saga could repeat itself in an election year.”


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