Media Scans
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This Week’s Outsourcing Scan 8-3-2015

Update: Upcoming Outsourcing Issues. August 3, 2015

1) National/Louisiana: The New York Times Magazine reports on the rise of private policing in New Orleans and nationally. “In the United States, private police officers currently outnumber their publicly funded counterparts by a ratio of roughly three to one. Whereas in past decades the distinction was often clear—the rent-a-cop vs. the real cop— today the boundary between the two has become ‘messy and complex,’ according to a study last year by Harvard’s Kennedy School of Government.”

2) National: As parks in Kentucky, Florida, New Jersey and elsewhere face privatization and/or commercialization, Donald Cohen of In The Public Interest urges citizens to invest more in public parks to keep them affordable and well maintained. They “are essential public goods that strengthen our communities, connect us to the environment, and enrich our quality of life. Our parks need more public investment, not private interests looking for their own return on investment.” Right wing think tanks are using the chronic underfunding of the national parks system to push for privatization.

3) National: With federal financing for rural infrastructure stagnating, the Obama administration pushes for more private financing. Last Tuesday, “the Department of
Agriculture brought in about 100 investors and venture capitalists to tell them about the golden opportunities they’ve been missing in the nation’s heartland.” AMIBA,
a community-based business alliance, asks “Is this @usda plan to corporatize rural infrastructure dangerous as it seems?” The White House says that “over the coming year, the Georgetown University Law Center will introduce its inaugural Public Private Partnership Symposium [and] will host three full-day sessions to advance the ideas and lessons discussed at the Rural Opportunity Investment Conference.” The initiative is being driven by the White House Rural Council.

4) National: Corrections Corporation of America will release its earnings report at market close this Wednesday and have a conference call on Thursday at 11 am eastern.

5) Alabama: As a September 1 statewide deadline looms for school districts to decide if they want to become charter school authorizers, Madison City and other boards wrestles with the decision, in part due to the risks posed by charter schools’ public-private hybrid nature. “‘Part of our concern is the responsibility and accountability and the liability,’ Spears said. ‘Because if you do the smallest things incorrectly, you could be held responsible and liable for whatever the charter school does under your supervision. But you have very little supervision opportunities with them.’”

6) California: The Santa Barbara City Council is left holding the bag after a $100 million “public private partnership” project to build a landfill falls through when the bidder’s private financing fails to materialize. “Mustang won the bid six years ago because it pledged to finance the project using private funding sources while also keeping the dumping costs—known as a tipping fee—to no more than $100 a ton. (…) [But] using private capital, the lowest tipping fee Mustang could promise was $126 a ton, way over budget. Tipping fees could only be reduced to the $100 mark, the council was told, if the project were built with government financing.” The council has now, six years later, directed trash planners to explore public financing.

7) Connecticut: Choice of a private financing option rather than a public option costs the state $77 million. Gov. Malloy and lawmakers “directed UConn to find private developers to finance construction of the outpatient facility.” A quasi private corporation secured a loan at 4.81% when state revenues bonds enjoyed a 2.4% rate.

8) Florida: Palm Beach Post reporter Pat Beall, who along with her colleagues has produced consistently excellent stories on the private prison industry in Florida, wins a first place award from the Florida Society of News Editors for her story on prison healthcare (Dying for Care).

9) Florida: Opposition surfaces against Rep. John Mica (R-FL)’s suggestion that the Lynx system be privatized. Lynx is the public agency that operates buses in Orange, Osceola and Seminole counties. The Orlando Sentinel says “in a comparison presented recently to the board that oversees Lynx, the agency’s operating expenses came in below the average of a dozen other ‘peer transit agencies’ from around the country. Those numbers argue against a rush to privatize all of Lynx’s service.”

10) Florida: As the head of the Miami-Dade County transportation committee, Esteban Bovo, proposes a $102 million “public private partnership” to build a passenger rail link out into the Miami suburbs using existing freight rail line, Mayor Gimenez heads to Denver this month to look at that city’s P3 experience. Gimenez has proposed a light rail P3 project linking Miami and Miami Beach. But this has “raised concerns about diverting funds from modernizing the county’s bus service for larger swaths of the county.”

11) Georgia/National: Issues with First Student’s bus maintenance come to light as a new company takes over serving the Savannah Chatham County Public School System. “MV’s inspection of the bus fleet reveals the majority were not roadworthy based on MV’s standards, nearly 75%.” Students are also telling “First Student bus stories.” One student says “some buses were held together by duct tape, you know, I mean like… like some of the seats were patched up by duct tape. Some of the ceilings were just rusted beyond repair.” Meanwhile, First Student’s operating profits for FY 2015 increased to $177 million on revenues of $2.4 billion.

12) Louisiana: LSU rejects a mediator in its dispute with the company to which its Shreveport and Monroe hospitals’ operations were privatized. BRF “proposed a meeting to work through the concerns and draw up the remaining agreements sought by LSU. But he pushed back against a demand from Alexander that calls for the foundation’s president and CEO, John George, to resign from BRF and be banned from any association with LSU. George was one of Gov. Bobby Jindal’s appointees to the LSU Board of Supervisors at the time the hospital privatization deal was struck. He has since resigned from the university board.”

13) Louisiana: Charter schools begin gearing up to provide transportation for their students, some in three years, some sooner. “Charter schools currently operating must turn in a transportation services plan to the Board of Elementary and Secondary Education by Aug. 28, said Colleen Reynolds, a spokesman for Charter Schools USA.”

14) Maine: Bar Harbor and Mount Desert join a lawsuit against the principal owner of the Penobscot Energy Recovery Company (PERC), a “public private partnership” disposing trash for 187 Maine communities. “The Municipal Review Committee alleges in its suit that USA Energy improperly used partnership money to pay the Augusta law firm Doyle & Nelson to lobby in support of a bill before the Maine Legislature in 2013-2014 that the MRC contends would have an adverse impact on its member cities and towns.”

15) Massachusetts: Activists have until Thursday to file ballot initiative language for the November 2016 election. Initiatives have been floated on a range of issues, including authorizing more charter schools, opting out of Common Core and overhauling public records laws.

16) Michigan: The Clawson Public Schools board will decide a week from today whether to privatize maintenance and custodial services. Board members are concerned that an emergency manager will be appointed. “School board trustee Andrea Hodges said she would like to see the district focus on generating revenue rather than making cuts. ‘I think we’ll be throwing some good employees away just for a buck,’ she said.”

17) Michigan: The Moroun family, owners of the private Ambassador Bridge, want to convince Detroit to let them swap land for three acres next to Riverside Park. But “this sudden desire by the Morouns to want to address longtime outstanding code violations and related fines to acquire a parcel of land perceived as crucial to their financial empire leaves many residents suspicious.”

18) Missouri: The International Association of Fire Fighters Local 2665 is fighting back against a plan to privatize EMS services in University City. The City Council will get a look at the proposed contract tonight. Kurt Becker, district vice president of the local, “called the move to hand emergency medical service duties to a private company an extension of the 2014 hostilities that resulted in the suspension of five firefighters, temporarily removed from duty after they were photographed in uniform for a campaign advertisement.”

19) New York: The Albany Times-Union looks at how the school district is trying to attract students back into its fold after charter schools are closed for poor performance. Parents are “the front lines of the latest competition between the Albany city school district and its numerous charter schools.”

20) New York: Hedge fund billionaire John Paulson gives Eva Moskowitz’ charter school chain $8.5 million. Diane Ravitch writes, “Paulson sees Moskowitz’s chain as an antidote to poverty, but he seems unaware of her small proportions of the neediest students or the high attrition rate. Rumors abound that she may run against de Blasio for Mayor in 2017.”

21) New York: La Guardia airport will receive a long overdue redevelopment through a $4 billion “public private partnership” for the first half of the project. Delta Airlines will develop Terminals C and D in parallel with the Port Authority project. “Construction on the first half of the unified terminal will be managed by LaGuardia Gateway Partners (LGP), a public-private partnership that will maintain the new terminal as part of a 35-year lease (Vancouver-based airport investment and management company Vantage Airport Group is among the LGP consortium members).”

22) New York: JFK Airport will also get a new master plan by 2016. An RFP for a planning contract will be issued this October. In the La Guardia announcement, Gov. Cuomo also announced that the historic TWA Flight Center will be converted into a 505-guest hotel by a “public private partnership” consisting of PANYNJ and New York-based firm MCR Development.

23) New York: Brooklyn residents warn that Brooklyn Bridge Park, “an 85-acre oasis of urban tranquility,” may be turned over to private apartment developers. “Brooklyn is booming, and many residents say their park is increasingly at-risk. ‘Today, we have this one, last opportunity to do that. To take these parcels and turn them back into the parklands they were created to be,’ said Judi Francis of the Brooklyn Bridge Park Defense Fund.”

24) New York: Mayor de Blasio launches a “public private partnership” to provide mental healthcare to low income New Yorkers. “The Connections to Care initiative will tap existing community organizations currently serving low-income residents to integrate evidence-based mental health interventions into their programming.”

25) North Carolina: The former head of the privatized economic development agency was paid a $30,000 bonus to stay in his job, but left only three months later, according to NC Policy Watch. “Ardis Watkins, the government relations director for the State Employees Association of North Carolina (SEANC), said a $30,000 stay bonus for performing a public duty is a classic case of what can go wrong when government privatizes its functions and oversight lessens.”

26) Ohio: Under legislation recently signed by Gov. Kasich, the CEO of the Youngstown’s schools could take away all of the power of the school board except for taxation. “The plan has met opposition from many factions of the community. Teachers decry it as a first step to privatize public education in the state.”

27) Puerto Rico: As Puerto Rico heads into government debt default and undergoes an economic slump, questions hover over the financial health of Autopistas Metropolitanas, the highways and transit “public private partnership” put together by the island’s government, Goldman Sachs and Abertis. At the beginning of last month, Standard and Poor’s put a negative outlook on the project’s senior debt because the downturn could cut into tolls and bus fares. However, “given that the affected toll roads rely largely on commuter passengers for revenues to service debt, there is no direct revenue link to the government.” [Continually updated Bloomberg Brief on the Puerto Rico crisis]

28) Texas: Kilgore College, a community college in Gregg County, is outsourcing its custodial, maintenance and groundskeeping operations. “One of the ‘driving factors’ of the decision was the state had ‘offloaded 100 percent of the benefits costs for that classification of employee on to the college.’”

29) Vermont/National: Only a little over a month after arriving at the GEO Group’s reopened Baldwin Hills, Michigan, prison Vermont prisoners speak out about the dismal conditions there. “Bryer writes that there was no process for sick calls when inmates first arrived, and that medical services are not available at all on weekends and holidays. There are no windows in the building, and inmates get one hour of outdoor recreation a day, Bryer says. Some items in the commissary cost double what they did at the CCA facility in Kentucky, according to Bryer, and he says there are no curtains for the showers.”

30) International: Cecil the Lion killing raises issues about trophy hunting, “privatization” of wildlife, in Canada.

31) Revolving Door News: Quentin Messer, ex-assistant secretary of Louisiana Economic Development, becomes president and CEO of the New Orleans Business Alliance.

Legislative Issues:

1) National: The battle over renewed funding for national transportation, which plays a highly important role in the choices the country makes on the mix of public and private investment in highways and transit, grinds to a short term, three month deal. After Labor Day the battle will be re-engaged. The Amalgamated Transit Union has denounced the Senate-passed Drive Act for promoting privatization, saying it “expedites New Starts grant funding for public private partnerships, encouraging communities to get into deals with private entities. The ATU worries that this policy could lead to ‘bridges to nowhere’ and calls it a ‘shameless, partisan, and unprecedented nearly $2 billion give away to private—mostly foreign—corporations that have a long history of providing low quality transit service all across the nation.’”

2) National: As the Land and Water Conservation Fund is set to expire, Scott Shalaway of the Beckly (WV) Register-Herald warns that “there are those in Congress who would like to privatize and profit from these invaluable public lands. Be prepared to fight for affordable access to federal lands when the privateers make their case.”

3) Illinois: Chicago Mayor Rahm Emanuel unveils his plan to tighten up privatization procedures. The ordinance would require public meetings, an independent financial review and an explanation of the benefits before a City Council vote. Emanuel gained the support of Ald. Roderick Sawyer, the author of a similar ordinance that was stalled in a council committee for months, “even though the alderman’s version would have included worker protection standards and other guidelines for privatizing service contracts as small as $250,000.” Others criticized Emanuel’s proposal for not containing sufficient safeguards to prevent the proceeds of public asset sales from being used to plug budget gaps.

4) Kansas: The Legislative Post Audit Committee votes down, on a 5-4 partisan split, a request to audit the state’s foster care system. “Rep. Jim Ward, D-Wichita, who brought forth the request along with Rep. Ed Trimmer, D-Winfield, argued that privatization of the foster care system in recent years had lessened state oversight and that an audit was needed to determine whether the DCF had ensured the safety of children in the system.”

5) Michigan: As Gov. Snyder considers future legislative plans for Detroit’s public schools, Nancy Kaffer looks at the issues. “Oddly enough, Richard McLellan, the architect of Michigan’s charter school law and the state reform district, seems to side with [state board of education head John] Austin. Charters have become part of the establishment, he says, so they’re now part of the problem. And at least in Detroit, he says, the school-choice people haven’t done a very good job.”

6) Tennessee: Lawmakers push for hearings on understaffing at state prisons. House Minority Leader Craig Fitzhugh, D-Ripley, is concerned that “these chronic understaffing issues are part of a larger plan to privatize our prison system or to close some facilities.” This as Corrections Corporation of America continues to attract criticism for multiple problems at its Tennessee operations. “The American Civil Liberties Union In Tennessee has launched a petition asking Gov. Bill Haslam to stop doing business with CCA. It has garnered more than 26,000 signatures.”