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This Week’s Outsourcing Scan 7-25-2016

1) National: Donald Cohen of In the Public Interest marks out some recent notable victories for the campaign to stop corporate profiteering from mass incarceration, including the imminent closure of Colorado’s Kit Carson Correctional Center; the upcoming closure of the notorious, privately operated Walnut Grove Correctional Facility in Mississippi; the introduction of legislation to make it harder for private prison companies to take advantage of federal rules that provide massive tax breaks; and the ruling by a federal judge that the government must make contracts with private prison companies available to the public. “Every taxpayer dollar we take back from the private prison industry is a dollar that can be spent on cultivating a more humane criminal justice system and a safe and just society,” Cohen writes.

2) NationalProfiting from desperate Syrian refugees—indefinitely? After crossing a continent facing jaguars, scorpions, poisonous frogs and insects, paramilitary groups, traffickers and guerillas, a Syrian woman arrives in the South Texas Detention Complex, operated for profit by the GEO Group. “At the detention facility, Halawi has voluntarily spent the last four months in segregation, which is similar to solitary confinement. She stays in her room 23 hours each day with just one hour to enjoy the sun and fresh air. In segregation, she’s alone with her thoughts and inner turmoil. ‘I’ve started to feel like I’m a burden,’ Halawi said. ‘I can’t get out.’ (…) Without parole, Halawi would remain indefinitely detained while in legal limbo. ‘This is my only hope now,’ Halawi said.”

3) National: Talking Points Memo publishes the third in its series of articles of privatization, this one focused on the relation between municipal privatization and democracy. Erika Eichelberger writes, “the question that remains is what this shift in ownership of the city has done to society on both a collective and individual level,” and suggests our “right to the city” is being harmed. “The freedom to make and remake ourselves and our cities,” geographer David Harvey writes, ‘is one of the most precious yet most neglected of our human rights.” Eichelberger  says “the nascent anti-privatization movement is determined to claim that right.”
 
4) National/OhioWhen are private contractors school officials? EdSurge reports “the ‘School Official’ exception to FERPA, the federal student privacy law, allows schools to provide student data to principals, teachers and school employees to use for educational purposes. But recent questions have been raised by stakeholders in the education marketplace as to whether this definition applies to such entities as contractors who may work for the school—such as a bus company—or an email service provider.” 

The National Education Association has been grappling with this issue, and issued a policy brief on it earlier this year. “A top concern highlighted by the NEA is that Federal legislation regarding student data has not kept pace with technological advancements. (…) However FERPA doesn’t require parental notification or consent for disclosure of educational records to contractors, consultants, and others over whom the educational institution exercises control.”

On Friday, charter school advocates got a court order forcing a school district to release
 “Springfield student names, addresses, parent telephone numbers and other contact information” to them. School Choice Ohio had filed a public records request, but “the district denied that request, citing FERPA. It sent student names and addresses and said the remaining information wasn’t directory information that could be released.”

5) National: Carol Burris, executive director of the Network for Public Education, “explains why putting the word ‘public’ in front of ‘charter school’—which are funded with tax dollars — is ‘an affront’ to people for whom public education is a mission.” Burris writes, “Charters, regardless of their original intent, have become a threat to democratically governed, neighborhood public schools, and questions about their practices, opacity and lack of accountability are increasing as their numbers grow. (…) Charter schools are privately run academies funded by the taxpayer. Many are governed by larger corporations, known as CMOs. Some are for-profit; others are not for profit yet still present financial ‘opportunities.’ Democratic school governance is viewed as an obstacle by many charter school devotees.”

6) NationalWall Street is getting excited by the prospect of investing in a privately-centralized municipal water sector. “‘There are tremendous opportunities to privatize and consolidate this industry,’ Gabelli analyst Timothy Winter said, and private water suppliers have been acting as consolidators. ‘With larger companies you get economies of scale,’ Winter said. ‘Rather than 10 separate communities building 10 separate treatment plants, you only build one large one capable of serving them all.’ Additionally, publicly traded water utilities are often more agile at navigating red tape and politics than contentious government entities. American Water Works, for example, is heading a patchwork of local water authorities, districts and companies aiming to create a $322 million desalination plant large enough to wean California’s Monterey Peninsula off its drought-stressed traditional source, the Carmel River, before state-mandated deadlines.”

7) NationalHow do the Republican and Democratic platforms differ on infrastructure? The Republican platform proposes ending federal funding for public transportation from the Highway Trust Fund and replacing it with ‘public private partnerships.’ “Legal roadblocks” to PPPs would be eliminated. The Bond Buyer reports that “in contrast, the draft Democratic platform, which will be developed at [this] week’s convention in Philadelphia, will promise significant infrastructure investments. ‘We will make the most ambitious investment in American infrastructure since President Eisenhower created the interstate highway system,’ the draft says.” Robert Cochran, chairman of Build America Mutual, said the municipal debt market can provide the funding needed to revitalize U.S. transportation, estimated at about $100-$150 billion a year. [Sub required]

Meanwhile, American Federation of Government Employees National President J. David Cox Sr. has rejected Republican candidate Donald Trump’s criticism of the TSA and his calls for privatization of the Veterans Administration. “I have no doubt that Donald Trump’s idea of fixing TSA would be the same as his prescription for the VA: privatize to the lowest bidder and to hell with the safety and security of the flying public. What the TSA needs is for Congress to lift the arbitrary staffing cap and provide TSA with a realistic budget so the agency can hire the officers it needs to do its job,” Cox said.

8) National: Diane Ravitch, a prominent opponent of school privatization and profit-driven charter schools, reviews misguided efforts to create a national curriculum backed up by punitive, high stakes testing, and urges us to begin focusing on the real reasons for low school performance. “Six years after the release of our first national standards, the Common Core, and the new federal tests that accompanied them, it seems clear that the pursuit of a national curriculum is yet another excuse to avoid making serious efforts to reduce the main causes of low student achievement: poverty and racial segregation.”

9) National: Maximus, a major government contractor, will report its earnings for the fiscal 2016 third quarter on August 4, and will host an earnings call at 9 am that day. For more on Maximus, see In the Public Interest’s report, Closing the Books How Government Contractors Hide Public Records.

10) National: Transportation Secretary Anthony Foxx has announced the creation of a new agency, the Build America Bureau, to push transportation infrastructure projects. “The bureau will combine the following programs: private activity bonds; Transportation Infrastructure Finance and Innovation Act (TIFIA), the Build America Transportation Investment Center (BATIC); the Railroad Rehabilitation & Improvement Financing, and the new $800 million Fostering Advancements in Shipping and Transportation for the Long-Term Achievement of National Efficiencies (FASTLANE) grant program. BATIC, announced in 2014, serves as a single point of contact and coordination for states, municipalities, and project sponsors looking to utilize federal transportation expertise, apply for federal transportation credit programs, and explore ways to access private capital in public private partnerships (P3s). Since BATIC’s formation, DOT has closed over $10 billion in financing to support $26 billion in projects, the department said.” [Sub required]

11) Arizona: Gov. Ducey’s Kingman prison refinancing deal with the GEO Group may hit local schools. “Though property-tax savings were calculated into the overall savings plan, the state retooled its plan Friday after The Republic began asking questions about how the plan would affect Kingman schools. The school district stood to lose $874,000 in tax revenues in the current budget year from the prison refinance deal. To cope, the district had planned to raise its tax rate, pushing the tax burden onto Mohave County residents to recover the loss. That decision is now on hold, but only for a year.”

12) CaliforniaCorrections Corporation of America is awarded a contract to house up to 120 residents as part of the Male Community Reentry Program (MCRP) at the company’s 120-bed CAI-Boston Avenue residential reentry facility in San Diego.

13) California: UC Merced receives final approval from the UC Board of Regents to move ahead with a $1.1 billion ‘public-private partnership’ to expand and develop the campus. “The project is structured as an ‘availability-payment concession,’ a type of P3 with a single private developer responsible for design, construction, operation, maintenance and partial financing of all new facilities over the 39-year term of the contract. [Plenary Properties Merced] will be paid in installments over that time, and UC Merced will resume responsibility for maintenance at the end of the contract. The school will own the buildings at all times.” [Sub required]

14) IndianaA student group protesting the “infiltration” of Ball State by the Charles Koch Foundation was blocked from addressing university trustees on Friday. “The Progressive Student Alliance, which started out as a Bernie Sanders group, says it was not permitted to express concerns that Ball State will hire a ‘Koch-connected official’ as its next president.” The student group said the Koch brothers are “pushing a free-market agenda and the privatization of public institutions.”

15) IowaAn in-home health care agency staffer echoes the Des Moines Register’s denunciation of Medicaid privatization as a disaster. The small agency hasn’t been paid since April. “Right now we are floundering, not knowing where to go and who to talk for resolutions to this critical situation. We can only hope to hang on long enough to see a resolution, but unless it comes within the next couple of months, there’s a very distinct possibility that it will be too late for this small agency and the many clients in which we serve.”

16) Louisiana: Recidivism-reducing programs in Lafayette, Alexandria, Lake Charles, and Monroe have been canceled because of budget cuts. “Day-reporting programs in Lake Charles, Alexandria and Monroe were operated by GEO Reentry Services, which also operates programs in Baton Rouge, Covington and Bossier City. All six were opened last fall. The Lake Charles, Alexandria and Monroe programs were removed from the company’s website by Friday afternoon. A spokesperson did not respond in time for this article’s publication. GEO Reentry services is owned by the Florida-based GEO Group. The corrections company operates detention centers around the globe, including four in Louisiana.”

17) MassachusettsA judge has thrown out the lawsuit challenging the privatization of Fall River’s trash collection, which began July 1. “Early in the hearing it was clear Hopkins was not buying Rich’s argument, pointing to the fact the city government is run under a Plan A form of government, with a strong mayor and weak City Council. Hopkins noted that the mayor has the authority to enter into contracts without City Council approval.”

18) MassachusettsAs the November referendum on lifting the cap on charter schools heats up, corporate interests begin attacking public school advocatesPublic School Mama takes on venture capitalist and former COO of Michelle Rhee’s StudentsFirst Dmitri Mehlhorn, who has tangled with opponents of for-profit charter schools before. Mehlman is also on the board of American Prison Data Systems, which sells hardware and software to prisons.

19) Massachusetts: The Massachusetts Bay Transportation Authority issues a Request for Qualifications for an automated fare collection system. “The MBTA, which operates mass transit in Greater Boston, said the RFQ, under a performance-based contracting arrangement with private financing and integrated delivery, calls for replacement of its CharlieCard and CharlieTicket system that would enable riders to use smart phones, bank cards, and-or a new MBTA fare card to access all MBTA services.” New York also has an RFQ out for a contractor to replace its MetroCard system. [Sub required]

20) Massachusetts: The Boston Carmen’s Union pushes back against Gov. Baker’s claim that someone had cut unauthorized sunroofs into armored cars used by Massachusetts Bay Transportation Authority workers. “‘These trucks have the exact same roofs from when they were purchased two decades ago,’ Boston Carmen’s Union president James O’Brien said in a statement. ‘This baseless allegation is proof that this administration will do anything to try to justify privatization.’ The union on Friday called Baker’s statement ‘pure fiction’ and released photographs of a partial fiberglass ceiling on the tops of the armored cars. The back-and-forth about the sunroofs on armored cars came as Baker and MBTA officials made moves to privatize the agency’s cash-counting operation, known at the agency as ‘the money room.’ On Friday, the agency released a request for proposals asking companies to bid on taking over the operation.”

21) Mississippi: Vicksburg mayor George Flaggs, Jr. may consider privatization as a possible solution to the high cost of jailing and transporting the city’s prisoners. But North Ward Alderman Michael Mayfield says “these numbers never go down. If you think it’s going down, you might as well go on ahead put your head in the sand and let them start kicking your butt now, because it’s not going down.”

22) New JerseyMontclair Community Pre-K declares its opposition to a proposed charter school. “A charter school would drain money from the existing public schools. According to a letter sent by Montclair’s Interim Superintendent Ron Bolandi to NJ Education Commissioner David Hespe on May 20, 2016, the state’s final approval of the Montclair Charter School will initially cause the Montclair School District to transfer $2,625,000 to the new charter school. This figure will increase to as much as $4,825,000 if and when the school’s student body grows to its full capacity (K-8). The loss of these funds will necessitate cuts to staff and services that will affect every student in the district, and most significantly those who are at-risk.”

23) New York/National: As we approach the beginning of the 2016-2017 school year, New York City Mayor Bill de Blasio’s breakthrough plan to improving school services delivery will be coming into effect. Based on strong cooperation with the city’s custodial unions—the International Union of Operating Engineers Local 891, International Union of Operating Engineers Local 94, and 32BJ SEIU—it represents the most significant overhaul of the custodial system in 150 years

The agreement may serve as a model for other cities that have chosen to maintain citizen control of school services and build a strong cooperative relationship with their public service workers, rather than outsource them to a disjointed patchwork of private contractors, or an expensive-to-oversee system of privatized delivery which has met with disaster elsewhere, e.g. in Chicago’s bad experience with contracting out janitorial services to Aramark and SodexoMagic. The pact between the city and its unions involves $10,000 bonuses and a 12-year ban on outsourcing.

24) South CarolinaBeaufort town officials will consider privatizing trash collection. “As the low bidder, Waste Industries is the likely candidate for approval by the town. The company provides trash collection services for several other municipalities in the county.” But “should commissioners choose to continue town-run collections, Beaufort is set to hire another two personnel and purchase a truck this year.”

25) International: Library workers in Saskatchewan are worried that an anti-union law will be used to allow their employers to remove them from the Canadian Union of Public Employees (CUPE). “We think this is a violation of their rights, of freedom of association and we’re asking the labour board if they state that this legislation violates people’s rights and needs to be declared unconstitutional,” said Tom Graham, president of CUPE Saskatchewan.

26) Think Tanks: The Koch, Bradley, and Donors Trust-funded Tax Foundation issues a report criticizing federal tax exemption for municipal bond interest, saying it can encourage municipalities to overinvest in infrastructure. But Jessica Giroux of Bond Dealers of America says “that eliminating or limiting the muni exemption would pass increased infrastructure costs onto both those who invest in municipal bonds and taxpayers. ‘Stripping the muni tax exemption would have a devastating fiscal impact on local governments and their ability to meet the needs of their citizens,’ and that ‘munis are crucial to funding better roads, water systems, schools and “other vital components of daily life.’” [Report]

Legislative Issues

1) National: The GEO Group and Corrections Corporation of America kicked into the Republican Legislative Campaign Committee at a fundraising bash in Cleveland last week.

2) NationalNational Weather Service outages resurface privatization issue. “In June, the U.S. House’s Subcommittee on Environment, Space and Technology held a hearing on private sector forecasting that some viewed as a push to privatize portions of the National Weather Service. Executives from AccuWeather, Panasonic Weather Solutions and Spire testified during the hearing. But the NWS employees union downplayed the privatization concern this past week, noting strong support for the National Weather Service by Democrats on the subcommittee.”

3) HawaiiIn a dramatic move, lawmakers override Gov. Ige’s veto of a bill privatizing three state hospitals. “The legislation provides severance packages and retirement benefits to the hospital workers affected by the move, and Ige says it’s too expensive. He vetoed the bill earlier this month, also citing concerns that it could jeopardize the tax-exempt status of the Employees’ Retirement System.” Ige has also been negotiating with the United Public Workers, which is suing the state over the privatization. [Sub required]

4) North Carolina: State lawmakers urge the Centers for Medicare and Medicaid Services (CMS) to reject the Gov. McCrory request to reorganize and partially privatize the state’s Medicaid program. “If Republican leaders really want to improve health care in our state, they should put political considerations aside and accept the Affordable Care Act’s generous Medicaid expansion funding.”

 

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