Update: Upcoming Outsourcing Issues. January 27, 2014


1) National: School privatization groups organize events for “National School Choice Week,” January 26-Feb 1. The National Coalition for Public Education (NCPE) saysNSCW is sponsored by “the Heritage Foundation, the National Catholic Educational Association, the American Legislative Exchange Council, Freedom Works and Betsy DeVos’ Alliance for School Choice.”


2) National: A new GAO report suggests that American Recovery Act grant implementation procedures offer valuable lessons on transparency and accountability. “An example of one good practice that was required by the Recovery Act was the creation of the Recovery.gov website. This site, as well as similar portals created by states and localities, demonstrated several leading practices for effective government websites. These included (1) establishing a clear purpose, (2) using social networking tools to garner interest, (3) tailoring the website to meet audience needs, and (4) obtaining stakeholder input during design.” National Sunshine Week is March 16-22.


3) National: Half of taxpayer-funded research will soon be public. “While the government funds a significant chunk of academic research in the United States, most taxpayers do not have access to the results of that research, which is often kept in pay-walled databases controlled by commercial publishers.”


4) National: Bloomberg Radio’s Arthur Levitt interviews Chris Whittle (p. 1291; long download), the founder of Edison Schools. Whittle has now started an expensive private school in Manhattan. [Audio]


5) California: Gov. Brown asks a federal court panel for a two year delay in capping its prison population. “The federal judges have indicated they disapprove of solving the overcrowding problem by shipping California inmates to out-of-state prisons, even though the state has done so with thousands of inmates. (…) Lawyers for the inmates have repeatedly insisted they would oppose any more extensions of the court-ordered deadlines.”


6) California: Regarding proposals to privatize Corona del Mar lifeguard services, theDaily Pilot reports that according to Newport Mayor Rush Hill, “rumor has it that the city has not been impressed with the options.” He may outline his plans on February 7.


7) California: San Jose police may be able to tap into private surveillance cameras. “‘To me the really interesting and troublesome part of it is the way we are starting to privatize government surveillance—to enlist private citizens in a way that is kind of unprecedented and could be potentially really dangerous,’ said Hanni Fakhoury, a staff attorney for the Electronic Frontier Foundation, a San Francisco-based nonprofit. ‘Once you give the police unfettered access 24/7, you’re relying on them to exercise their restraint.’”


8) California: Geo Group, the private prison corporation, is among the top contributorsto Gov. Brown’s reelection campaign.


9) Colorado: Advocacy group demands legislative scrutiny of a deal to give control of U.S. 36 between Boulder and Denver to a private consortium for 50 years. “‘This contract covers a half-century period,’ the group’s clean-energy analyst Ken Beitel said. ‘We have a fiduciary trust to future generations to ensure that what we sign here in 2014 will still be a good deal for the public interest in 2060.’ CDOT is increasingly looking to public-private partnerships to build and manage highways—including C-470 and Interstate 70 in east Denver.” The Drive SunShine Institute has called for a moratorium on the deal, and asked the DOJ to investigate corporate lobbying influence. Says “Cintra and Macquarie are being well rewarded for their lobbying investments.”


10) Connecticut: A teacher’s frustration and concern with “education reform” goes viral.


11) Florida: As Broward County privatizes its facilities department and fires 14 employees, critics say it is now paying more. “‘The exact same job is now being done by a contractor at two to three times the cost,’ said Broward Teachers Union official Virgil Cruz. (…) ‘The project manager was probably making about $90,000 including benefits. What URS is going to charge is probably about $180,000, which is twice as much,’ said Steve Feldman of the Broward Teacher’s Union.”


12) Georgia: The Atlanta Journal-Constitution and the Atlantic denounce privatized probation systems. Writing in the AJC, Rhonda Cook reports that some in the private probation industry “have pocketed large fees while, in at least some cases, doing little to supervise those under their watch. And despite promises that taxpayers would pay nothing to supervise the offenders, they have footed the bill when the probationers are arrested and jailed because they owe money to the company, not the courts.” [Sub required] Cook reports in another article that “many private probation companies in Georgia are controlled by former law enforcement officials, and they’re leveraging their connections into lucrative contracts. (…) Politics have figured in the private probation movement from the beginning. Two of the most powerful allies of the idea were Board of Pardons and Paroles Chairman Walter Ray and board member Bobby Whitworth, also once the commissioner of the Department of Corrections.”


13) Georgia: Atlanta Journal-Constitution columnist Jay Bookman lays out of the perils of privatizing Georgia’s foster care system. Warns of a loss of accountability, abandoning a “core government function,” and ignoring the fact that “government does some things better than private entities.” [Sub required]


14) Georgia: The Savannah convention center’s operation, now done by a private company, may be turned over to a public entity. “Such an arrangement—to have one state authority turn to another state authority to manage its facilities—would be novel in the industry today when the trend has been to privatize operations. ‘What intrigued us and our board was the partnership that could take place between two very attractive destinations and two very strong convention facilities,’ [Frank Poe, executive director of the GWCC Authority] said. ‘We are very excited about the possibility.’” [Sub required]


15) Idaho: Workers sue Corrections Corporation of America, alleging unsafe work environment. “The workers contend that they sustained severe emotional distress and in one case, physical injuries, because they were put to work at the Idaho Correctional Center with broken equipment and inadequate training. In the lawsuit, the workers say they were equipped with broken radio sets, empty pepper spray canisters and were often left to work without basic equipment like handcuffs.”


16) Indiana/Illinois: As Illinois selects four teams as preferred bidders on the Illiana expressway, political and financial questions remain. “How much in public subsidies, for how long, will be needed to keep the road solvent? Illinois Gov. Pat Quinn has said that the road eventually will more than pay for itself, serving as an economic catalyst, but Cook County officials, CMAP staff and numerous environmental groups strongly disagree.”


17) Maryland: A secret audit found that Baltimore’s privately-operated speed cameras had high error rates. “Consultant URS Corp. evaluated the camera system as run by Xerox State and Local Solutions in 2012 and found an error rate of more than 10 percent—40 times higher than city officials have claimed. The city got those findings last April but never disclosed the high error rate, refusing calls by members of the City Council to release the audit.”


18) Michigan: University of Michigan decides not to privatize its parking facilities. Steve Dolen, the University’s executive director of Parking and Transportation Services, said “we went through the exercise to see if it made sense in the long-term with the best intentions for students and reducing costs for the organization. When they benchmarked us, it showed that we operated very efficiently and incurred very little maintenance.”


19) Michigan: Contract terms are still being finalized for Detroit’s outsourcing of some of its trash services to Rizzo Environmental Services. But the company could start work as early as February.


20) Mississippi: Legal issues cloud possible privatization of a public water park. The Mississippi Supreme Court is expected to rule on an appeal sometime this year.


21) Nebraska: The state has less than 30 days to pay back almost $22 million to the federal government “because the state failed to properly track payments it made as part of its troubled effort to privatize child welfare services.”


22) New Jersey: Today the Ewing Township Council will discuss a resolution opposing privatization of toll collection services on the New Jersey Turnpike and Garden State Parkway. Last week toll collectors held a fundraiser to wage the fight.


23) North Carolina: Gov. McCrory vows to close poorly performing charter schools. “State law mandates closure for charters that have composite pass rates below 60 percent and fail to meet growth targets for two of three consecutive years. That could be a problem, if last year’s performance on the new state exam is any indicator of 2014 results. Seventy-five of 108 charters that reported results for 2013 fell below 60 percent. But the state gave a one-year reprieve because the exams were new and results plunged across the state. Traditional public schools across the state fared even worse, with 86 percent logging proficiency rates below 60 percent.


24) North Carolina: The privatized state Economic Development Board rolls out its 10 year plan for job creation. “Allen Freyer, an analyst with the N.C. Justice Center, said that while the board offers useful proposals, ‘there is an important contradiction between the plan’s call for additional tax cuts and the resources necessary to achieve the goals related to workforce development, innovation/entrepreneurship and rural prosperity. These goals will be impossible unless the state provides adequate investment in higher education, community colleges and rural community development initiatives.’”


25) Ohio: Ohio Turnpike officials hire a sports marketing company to look into selling naming rights to the road and its facilities. The turnpike is currently operating in the black. “‘I may be old-fashioned,’ said Michael Dovilla, a Republican state representative from Berea, ‘but… I think there is a limit to the propriety of naming every public asset just because this is a direction that the private sector seems to be going. I would be the last person who would want a bumper sticker slapped on the Ohio Statehouse, for example, that is named after Company XYZ.’”


26) Oregon: Judge rules that the city of Lake Oswego has a right to bar the public from accessing Oswego Lake. Todd Prager, an Oswego town planner who sued the city over the issue, said “I still firmly believe that public access to Oregon’s waterways is a fundamental right guaranteed to all Oregonians through our statehood act. I think it is wrong that the city is spending public money in an attempt to privatize a public resource.”


27) Pennsylvania: Democratic lawmakers question Gov. Corbett’s choice of a new head for the state lottery, which he tried to privatize. They are also concerned he may revive the privatization effort. “While we welcomed your Dec. 30 announcement that you will no longer pursue an effort to outsource the Pennsylvania Lottery to a British firm, we remain concerned that you have not ruled out a renewed effort at privatizing management of the Lottery in the future.”


28) Pennsylvania: Statements of Qualification are due this Friday for PennDOT’s bridge repair “public private partnership,” which will cover as many as 500 bridges. “As part of the P3 law, the seven-member Public Private Transportation Partnership Board was appointed to examine and approve potential public-private transportation projects. If the board determines a state operation or project would be more cost-effectively administered or delivered by a private company, the department or appropriate transportation agency can advertise a competitive RFP and enter into a contract with a company to completely or partially deliver the transportation-related service or project.” Companies will not only repair or reconstruct bundles of bridges, but may be tasked with maintaining them for decades.


29) Rhode Island: Resident writes letter to Central Coventry Fire Department board president and vice president opposing outsourcing and cuts. “Private ambulance services in Rhode Island are merely transport services for profit. The underlying motivation for private ambulance companies is money. It’s all about money and very little about public safety. These companies often hire young and inexperienced EMT’s and pay them less just so the company can save money. The training is nowhere near as extensive as that of the fire service. Less training means there are more mistakes made and public safety is largely at risk.”


30) Utah: LDS church comes out against liquor privatization. “Specifically, the church opposes making changes that would privatize the alcoholic beverage control system, increase alcohol license quotas, permit sales of drinks with high-alcoholic content in grocery stores or convenience stores outside of state control, as well as those that would promote increased sales or consumption of alcoholic products.”


31) Vermont/Kentucky: Vermont corrections officials have raised questions about the adequacy of staffing levels at a CCA private prison in Kentucky where Vermont prisoners are being held. Prisoners have been in lock down following a series of recent incidents. “The state’s contract with CCA is set to expire in June 2015 and must be put out to bid, according to Richard Byrne, the DOC out-of-state unit supervisor who spoke to the House Corrections and Institutions Committee on Tuesday.”


32) West Virginia: Chief steward of UE Local 170, the West Virginia Public Workers Union, criticizes plan to privatize state-run psychiatric facilities. “Throwing these folks to the mercy of the private sector will likely subject them to an uncertain future. We wouldn’t consider handing over our veterans’ nursing home to private interests. Why abdicate our duty to elderly, disabled and committed citizens?”


33) Revolving Door News: Former Transportation Secretary Ray La Hood joins DLA Piper. “He takes along with him Joan DeBoer, who was his chief of staff at USDOT.”Streetsblog reports “the firm doesn’t do much lobbying on transportation, though over the last few years it’s done $630,000 worth of business with Northeast MAGLEV, a Japanese-backed company that wants to build high-speed magnetic levitation trains on the Northeast Corridor.”


34) Think Tanks: American Legislative Exchange Council issues a new reportcriticizing “the problem of overcriminalization,” despite its years of ties with the private prison industry and promotion of harsh sentencing. The ALEC report focuses on the supposed overcriminalization of corporate actors, while ignoring the problem of massive overincarceration in the U.S.


35) Think Tanks: The right wing, Koch-funded Mackinac Center issues a report on schools privatization covering 2013. The report was authored by Mackinac’s assistant director of fiscal policy and a student at Northwood University. The Koch networkreportedly held its annual fundraising meeting this past weekend. Next week Koch Companies Public Sector’s new PR director comes on board.



Legislative Issues:


1) National: Eleven Senators introduce a bill to create a $50 billion national infrastructure bank. “The fund would be capitalized by purchase of taxable bonds that bear interest of no more than 1% and would not be guaranteed by the federal government, [Rep. John] Delaney said. For every $1 of bonds invested in the 50-year bonds, U.S. corporations would be able to repatriate up to $6 of oversea earnings without federal tax liability, he said.” [Sub required]  But the Center for Effective Government (formerly OMB Watch) says the Senate bill benefits tax dodgers. “Thankfully, there are fairer proposals available, which prioritize investment in American infrastructure without giving tax breaks to corporations. Rep. Rosa DeLauro (D-CT) has introduced a bill to create and fund an infrastructure bank using both public and private funding without rewarding tax avoidance.”


2) National: Bills are introduced in the House and Senate to revive state infrastructure banks. “The State Transportation and Infrastructure Innovation Act (STIFIA), H.R. 3872, introduced on Jan. 14 by Rep. Richard Hanna, R-N.Y., and Rep. Janice Hahn, D-Calif., would renew a state bank program first authorized under a 2005 federal highway funding bill that expired in 2009.” The identical Senate bill is S. 1553. [The Bond Buyer, January 27, 2014; sub required]


3) National: Efforts to dismantle Fannie Mae and Freddie Mac, the federal mortgage guarantors, are seen as unlikely to pass this year. “‘Reform legislation is unlikely to become law this year. In fact, there are clear signals that the effort in the Senate Banking Committee faces a far steeper climb than originally expected,’ said Isaac Boltansky, a policy analyst at Compass Point Research & Trading.”


4) National: Numerous groups urge Congress to block the outsourcing of federal poultry inspection. “USDA’s proposal also allows each plant to decide the level of bruises, feathers, bile or ingesta appropriate for birds going down the processing line, rather than setting uniform standards across the industry. Further, the rule removes inspectors from the slaughter line and turns over inspection activities, previously conducted by federal inspectors, to plant employees who are not required to be trained in their new duties.”


5) National: Infrastructure mentions in State of the State speeches.


6) Arizona: Private prison-related bills advance in the legislature, including one to regulate private prisons [HB 2348]; provide for a special audit of private prison monitoring [HB 2349]; create a private prison study committee [HB 2351]; and conduct adult incarceration cost comparisons. The bill provides that “on publication, any request for proposals shall be provided to the joint legislative budget committee for its review.” [HB 2354].


7) Indiana: Legislation has been introduced in the state senate to enable private companies to “construct correctional, mental health, regional health and some communications facilities. Sen. Karen Tallian, D-Portage said Thursday the bill appeared to allow these firms to contract facilities without permission from the General Assembly.” [SB 225] The bill “expands the projects that may be carried out using a public-private partnership arrangement. Recognizes multiparty agreements, including agreements with other states and local government units, using a transportation public-private arrangement. Modifies hearing requirements related to public-private partnership

arrangements.” The bill was introduced by Sen. Luke Kenley, whose top three campaign contributors were the National Association of Realtors, the Indiana Builders Association and the Build Indiana Council.


8) New Jersey: Controversial school closings and charter school starts in Newark may go to the state legislature. “The uproar about the plan–and the suspensions–led to the introduction of legislation that its sponsors hope will stop the Christie administration from imposing its will on Newark residents. State Sen. Ronald Rice (D-Essex) has called the plan “destructive and disruptive” and has vowed to fight it in the Legislature.”


9) Oklahoma: A bill has been introduced that would mandate that “any industry in which wages of prisoners are paid by a nongovernmental person, group, or corporation, except those industries employing prisoners in work release centers under the authority of the Department of Corrections shall be deemed a ‘Private Prison Industry.’” [SB 1248] Another bill has been introduced requiring an annual registration fee for certain private prison contractors [SB 2104].

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