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This Week’s Outsourcing Scan 4-13-2015

Update: Upcoming Outsourcing Issues. April 13, 2015

1) National: Federal contract workers are to file a complaint over low wages to the Department of Labor. “Good Jobs Nation (GJN), which is advocating for the low-wage workers, said these federally contracted employees have been deprived of over $1.58 million in unpaid wages and benefits. ‘The Return of Federal Sweatshops, How America’s Broken Contract Wage Laws Fail Workers,’ a report the group released Thursday, found that janitors in the Education Department are getting paid a base wage between $9.10 and 9.65 an hour with no benefits, sick leave or vacation.”

2) National: California Attorney General Kamala Harris and other attorneys general call on the federal government to forgive student loans for the bankrupt, for profit Corinthian Schools. “Debt carried by hundreds of thousands of primarily low-income students has been one of the biggest unresolved issues surrounding the near-collapse of Corinthian, which has been in the process of selling off and closing down schools after a crackdown by the U.S. Department of Education last summer. The attorneys general are asking the Education Department to use a little-known federal regulation that allows students to avoid repaying loan debts for schools that broke state law by deceiving students.” Privatization advocates often argue that taxpayers are protected from liability if their operations go bust.

3) National: Presidential hopeful Jeb Bush calls for privatizing parts of veterans healthcare. “This is where I think empowering people with the equivalent of a voucher that gives you the same economic benefit of receiving care inside of a clinic or a hospital,” Bush said. “The effort to privatize elements of the VA system is a priority of the Koch brothers-backed group, Concerned Veterans for America, which in February called for creating a ‘premium-support private insurance option’ for current veterans and limiting eligibility requirements for future veterans.”

4) National: AFL-CIO policy director Damon Silvers weighs into the debate on privatization of infrastructure, writing that “now we are told that instead of borrowing money at the 30-year Treasury rate of 3 percent to invest in repairing our deteriorating infrastructure, the government should pay Wall Street firms double digit rates of return, plus huge fees, for doing what Treasuries and municipal bonds do for a fraction of the cost. This is simply a wealth transfer from the public to Wall Street.”

5) National: LinkedIn will buy the private online education company lynda.com for $1.5 billion. “With the integration of lynda.com and LinkedIn, users will know what skills are needed for the available jobs in their desired city, Ryan Roslansky, LinkedIn’s head of content, wrote in a blog.”

6) California: The California Supreme Court orders the Los Angeles school district to revise its method for allocating classrooms to charter schools, asserting that the LAUSD may be shortchanging them. “But whether the new method would lead to expansions for L.A. charter schools was unclear. The guidelines laid down by the court contained plenty of room for interpretation. Charter advocates predicted that at least some schools would get additional space. An attorney for LAUSD said no new charter school classrooms would be required.”

7) California: To kick off National Library Week, opponents of the privatization of the Kern County Library will be holding a meeting today at 6 pm. “We will go over our short and long term goals and the actions we need community members to take to stop privatization and secure other funding for our library system. Please join us!”

8) California: After a prolonged fight, Costa Mesa workers vote to outsource street sweeping as part of their contract. “Jennifer Muir, spokeswoman for the Orange County Employees Association, said last week that street sweeping was a ‘unique area … that made sense’ for outsourcing, because the city’s street sweeping equipment was ancient and, by 2014, the employees were not union members.”

9) Florida: Miami-Dade County releases a draft Request for Qualifications for a $135 million biosolids processing plant, which would be the first water sector “public private partnership” in the state. “The procurement process is expected to be completed in two phases. The first will entail an interim agreement for certain planning, development, design, and financing services for the project, according to a document released by Miami Dade County. Phase two would be the awarding of a comprehensive agreement that may include the final design, permitting, construction, financing, and operation and maintenance of the project.” The submission deadline is June 5. [Sub required]

10) Indiana: Despite the fact that a report commissioned by the Marion County City-County Council found that traditional financing would be more effective for developing a proposed Indianapolis Justice Complex, a Rules and Public Policy Committee votes to proceed with a “public private partnership.” Opponents have “questioned the need for a facility some described as a boondoggle that increases jail beds at a time when alternatives are preferred. Several said the decision should be made by a referendum rather than a vote of the Indianapolis City-County Council, currently scheduled for April 20.” Nevertheless, City-County Council president Maggie Lewis says “I do not believe the votes are there to pass.” Democratic mayor hopeful Joe Hogsett has also called for the project to be put on hold. “Lewis said, ‘At times I feel like I don’t even know what questions to ask because things continue to change, the numbers continue to change. We’re now hearing from stakeholders that they do not agree on the numbers and assumptions being made, so we’ll continue to dig deeper and find out more information.’ Some councilors are also miffed to learn that two of the losing bidders are getting $750,000 each for putting together those bids, which the mayor balked at.” Meanwhile, an additional proposal for a law office is also in the works, sparking concern about additional costs.

11) Indiana: A new Indianapolis charter school will be created for expelled and incarcerated students. “The Marion Academy for expelled or suspended students will be located at the former IPS #68 at East 21st Street and North Riley Avenue. The Hillside Academy will be located inside the juvenile justice complex.”

12) Indiana: The Indianapolis Airport Authority issues a Request for Qualifications for a private sector firm to construct a stormwater/wastewater project at the city’s airport. IAA has asked developers and operators “to submit innovative approaches with respect to any changes to the design, construction, finance, operations and maintenance of the existing systems.” Responses are due May 11. [Sub required]

13) Louisiana: Kenner officials want to privatize their municipal playgrounds. “Their idea isn’t to supplant existing programs with private leagues, Impastato said, but to adapt to the reality that specialized training is more appealing to many young athletes.”

14) Mississippi: In a trial over prison conditions and prisoner abuse, “attorneys for Walnut Grove prisoners did more than argue whether MDOC and Walnut Grove had violated the Eighth Amendment; they put private prisons themselves on trial as well. (…) Jody Owens, managing attorney at the Mississippi Southern Poverty Law Center, argued in court that the video demonstrates that MTC’s guards were improperly equipped—the guard station lacked gas masks—and trained to respond to the riot. Brown, the MTC official, said she had not seen the video and was not aware that the gas canister had gone off in the guard booth before she took the stand in court [the week before last]. ‘Private prisons are doing everything on the cheap,’ the Rev. Jeremy Tobin, a member of the newly formed Clergy for Prison Reform, which opposes privatization in the corrections industry, told the Jackson Free Press. Tobin’s group believes profiting from the incarceration is immoral.”

15) New Jersey: Debate sharpens about the charterization of Camden’s public schools. Diane Ravitch reports that “a different view came from Save Our Schools New Jersey, an education-advocacy group. It asserted the schools were being ‘given’ to private operators ‘to ensure a forced supply of students.’ ‘The people of Camden had no say in this decision,’ said the group, which noted the city district is under state control and does not have an elected school board.” Laura Waters supports the move: “How will those students fare at their new KIPP renaissance school? We’ll know the answers to these questions in five to ten years.”

16) New Jersey: Friends of Liberty State Park will hold their 10th annual lunch meeting next Sunday under the theme “putting democracy into action to protect LSP from privatization.” FOLSP “has lobbied legislators to reword the Hackensack Meadowlands Agency Consolidation Act to keep the park development decision in the hands of the state Department of Environmental Protection.”

17) Ohio/National: The USDOT approves a $209 million TIFIA loan for the Portsmouth Bypass “public private partnership” project. “The bypass is the largest single construction project ever undertaken by the Ohio Department of Transportation (ODOT), and the first P3 utilized in the state under new rules that allow for private sector participation in transportation projects.” [Sub required]

18) Pennsylvania: The Philadelphia school district is to outsource the jobs of its substitute teachers to a private, for profit company. “Workers hired by a private company may or may not be unionized,” a district official said. “PFT president Jerry Jordan said that he thinks the District has deliberately manufactured a substitute shortage so it could use it as a reason to privatize more services. He noted that privatization of District services was recommended by the Boston Consulting Group’s controversial report from 2012. ‘I will be frank, I am afraid that some of the lack of service is contrived to pave the ground for them to send out the RFP,’ Jordan said.” [RFP]

19) Pennsylvania: The state DOT has announced it is accepting unsolicited proposals for transportation projects from the private sector. “During the open submission period, private sector companies have the opportunity to propose projects involving PennDOT-owned transportation infrastructure assets.” Submissions are due April 30, and another window will open in October. [Sub required]

20) Texas: Balfour Beatty reaches financial agreement on a mixed-use housing and retail development project at the University of Texas in Dallas. “Expected to cost about $54 million, the project is being delivered as a public-private partnership (PPP; P3) in collaboration with commercial developer Wynne/Jackson. Balfour Beatty Construction will lead the design/build team.” [Sub required]

21) Revolving Door News: Barry Smitherman, a former chairperson of the Texas Public Utility Commission, lands a post in the energy regulatory practice at Vinson & Elkins. “A fierce critic of federal intervention in Texas energy policy, Smitherman once called for a ‘conservative crusade’ against the Environmental Protection Agency.”

22) Think Tanks: The Education Commission of the States issues a report by Stephanie Aragon on “questions to consider when creating or modifying charter school laws.” Questions include “Has a procedure been established for authorizer accountability?” and “What, if any, sanctions have been provided for authorizers failing to meet professional standards or overseeing schools persistently failing to meet standards?”

23) Upcoming Event: The second annual conference of the Network for Public Education, Chicago April 24-26.

24) Upcoming Event: Infrastructure Week, May 11-15. [Schedule of events]

Legislative Issues:

1) National: Wes Siller writes that “Republican Senators Just Voted To Sell Off Your National Forests.” He explains, “SA 838 is a budgetary amendment which backs support for and funding of state efforts to take over federal land. It was part of a larger debate over the 2016 fiscal year federal budget. While yes, its language does note that it’s impossible to sell National Parks, National Monuments and National Preserves (which enjoy extraordinary legal protection), it leaves the door open to sell National Forests, Wildlife Refuges and Wildernesses. That’s some of you and I’s most beautiful lands on which we’re currently able to camp, hunt, hang out with our dogs and on which a large portion of wild animals rely for their habitat.”

2) Alabama: A state senate committee rejects liquor privatization bill. “Opponents of the bill said it would lead to the loss of more than 600 state jobs. ‘These are families that are entrenched in our communities, that have mortgages and kids in college, and will be out of work,’ said Sen. Bobby Singleton, D-Greensboro.”

3) Florida: A bill has been introduced that would allow private adoption companies licensed in Florida to block the adoption of children by LGBT individuals and same-sex couples. “The proposed bill would allow agencies to make foster care or adoption placement decisions in accordance with their “religious or moral convictions.” Agencies could refuse to place a child with a potential parent because of the parent’s sexual orientation or gender identity. The state would not be able to deny or revoke the agency’s license if the agency cites a religious or moral objection.”

4) Hawaii: Hospitals “public private partnerships” bill clears a committee and heads to the Senate floor. “The Hawaii Government Employees Association and United Public Workers union spoke in opposition. Michele Kurihara-Klein, HGEA legislative officer, called for a financial audit of the Maui hospitals. ‘This creates an unprecedented and excessively favorable gift for the operator,’ she said, noting that the fixed long-term lease is not at market value. ‘The lack of transparency of this process is alarming.’ HGEA requests that a full financial and management audit of the system prior to any privatization, which is outlined in House Bill 1112, H.D. 2.”

5) Louisiana: As the legislative session begins today, lawmakers gear up for some important battles over privatization. “LSU hospital privatization deals rely largely on dollars that require lawmakers to scale back tax break spending, and the New Orleans hospital operator says it still would be more than $80 million short of what is needed to open its new facility this summer. The Medicaid program could have a $200 million gap even if all the uncertain financing assumptions pan out. Jindal’s budget allocates $5.3 billion for the education department. But most of those dollars flow directly to school districts. The department’s actual operating budget would be cut by about $23 million, a loss of nearly half its state financing.” Meanwhile the Chamber of Commerce and various school privatization groups are descending on the capitol “to sell a standardized and privatized agenda for public education to our all-too-willing legislators,” says one educator.

6) Maryland: Gov. Larry Hogan (R)’s charter school bill heads to the full House after clearing the Ways and Means Committee. “The bill was dramatically amended from its original form by a Senate committee—Hogan has used the term ‘gutted’—but only a handful of changes were added by the House committee. ‘Overall, we feel this creates the pathway, sort of opens up the pathway, for charter schools in terms of its flexibility and its innovation in terms of trying some new things,’ Hogan special adviser Keiffer Mitchell said.” Last week, the Senate “repealed many of Hogan’s attempts to give more authority to charter school operators and more flexibility in terms of collective bargaining and certification.” The state has about 50 charter schools.

7) Massachusetts: Legislative efforts to weaken the state’s anti-privatization Pacheco law are expected. The Boston Globe says efforts to exempt the transit system from the law will be a tough sell. “The anti-privatization law is much too restrictive but is near and dear to the hearts of many legislators, who rely on political support from labor.” The Globe does recommend the creation of a financial control board.

8) Nevada: Lawmakers pass a bill to allow corporations tax credits for contributing to scholarship programs that allow students to go to private schools. “Democrats called it a voucher program in disguise that would divert money that could otherwise be used to improve public schools. Democrats also said the bill failed to target the lowest-income children. More than 70 percent of children statewide are expected to be eligible for the money.”