Update: Upcoming Outsourcing Issues. July 21, 2014

1) National/Michigan: The Detroit Free Press reports the results of its year-long study of the charter school industry in the state. The paper finds “wasteful spending and double-dipping. Board members, school founders and employees steering lucrative deals to themselves or insiders. Schools allowed to operate for years despite poor academic records. No state standards for who operates charter schools or how to oversee them. And a record number of charter schools run by for-profit companies that rake in taxpayer money and refuse to detail how they spend it, saying they’re private and not subject to disclosure laws.” [Free Press Special Report]. The Center for Popular Democracy and Integrity in Education released a similar report on waste, fraud and abuse in May.

2) National: Staples’ announcement last week that it was terminating its deal with the U.S. Postal Service to offer postal services, is “a ruse,” according to the American Postal Workers Union. “Staples and the USPS are changing the name of the program, without addressing the fundamental concerns of postal workers and postal customers. If it looks like a duck, walks like a duck and quacks like a duck, it’s a duck.”

3) National: Stymied in his effort to create a federally funded national infrastructure bank, President Obama is to establish a “Build America Investment Initiative“ to match up potential private infrastructure financing with states and cities. The investment center will be housed in the Transportation Department. The White House will also create an interagency working group and hold an “investment summit” on September 9. [White House Fact Sheet]

4) National: Joe Pinsker of The Atlantic looks at “The ‘Facebook Cop’ and the Implications of Privatized Policing.” Pinsker writes, “the law currently treats private security forces differently than it does municipal ones. Whereas governmental police can’t barge into your house and search it without first obtaining a warrant, private security forces are free to do so.”

5) National: High Country News reports on the pros and cons of concessionaires operating in national parks. “Opponents of the concessionaire program, however, believe tax dollars should be spent to keep fees low on public land. Public land shouldn’t be managed for private profit, they say. ‘The revenue and the profits are private, but all of the risks are socialized,’ says Kitty Benzar of the Western Slope No-Fee Coalition, which advocates against access fees on public land. ‘You and I are bearing the risk. If the campground has to be rebuilt after a fire, we pay for it, and then it’s handed back to the concessionaires. It’s a no-risk business (for the concessionaires).’”

6) National: Moyers & Company’s Joshua Holland reports on “How a Bogus, Industry-Funded Study Helped Spur a Privatization Disaster in Michigan.” 

7) California: As summer public school programs are cut back or eliminated in Los Angeles, criticism mounts against private classes offered by nonprofit groups, which can cost hundreds of dollars. The courses are often taught and administered by school district personnel. “Critics say the groups, while well-intentioned, effectively privatize summer school, contributing to inequity in educational opportunity.”

8) California: Incoming San Diego Mayor Kevin Faulconer wants to privatize the city’s email archive. A public records access advocate says “this policy contravenes existing law. Emails clearly fall within the definition of a public record. Further, city records are required to be retained for a minimum of two years. Destruction of public records may also be punished criminally.”

9) California: Los Angeles County Metropolitan Transportation Authority’s staff recommends Skanska for a design-build contract for Los Angeles’ purple line.

10) California: The Los Angeles Unified School District’s audit of two Magnolia Science Academy charter schools may lead to investigations of six other Magnolia schools. “According to that review of the non-profit group’s financial statements and accounting records numerous concerns emerged such as: non-disclosure of transactions; failure to maintain required reserves; failure to appropriately apply accrual basis of accounting; insufficient monitoring of cash receipts and deposits process; insufficient documentation for disbursements; a lack of control over journal entries, and lack of adequate training for the accounting staff.”

11) District of Columbia: The DC Public Charter School Board releases its annual review of charter school finances. “For the first time, the board offered a snapshot of schools that have contracts with outside management companies, expenditures of taxpayer dollars that are difficult to track.” 

12) Florida: Mother Jones reports that George Zoley, the head of the Geo Group private prison corporation, will host Florida governor Rick Scott (R) at a $10,000 a person fundraiser at Zoley’s home. “Zoley’s sponsorship of a fundraiser for Scott, who is in a tight race against former governor Charlie Crist, a Republican turned Democrat, isn’t surprising. (…) But the governor’s cozy relationship with the operator of some of the country’s biggest immigrant detention centers might not go over well with Latino constituents, who tend to oppose federal immigration detention policies.”

13) Florida: Orange County school board member says the FCAT evaluation test is “designed to flunk a pre-set number of kids—from 40 percent to 50 percent. (…) Why would they do that? A big reason is that if public schools can be made to look bad enough, the public will be willing to hand them over to privatization. It’s always wise to follow the money.”

14) Florida: Sarasota County administrators fire Sarasota County Area Transit Director Glama Carter as the commissioners “have been mulling proposals to privatize the organization.” Carter had received a good job evaluation. One observer says “everyone who has been following closely the struggle to make SCAT an efficient organization, and lift transit in Sarasota to a level adequate for a city this size, is shaking their head in disbelief.

15) Florida: Republican candidates for the Sarasota Hospital Board overwhelmingly oppose its privatization. “That blows a major hole in rumors that a private hospital company was recruiting candidates to run for the hospital board because they want to privatize it.” But “a political action committee called Save Our Community Hospital” has been formed to fight “any attempt to privatize SMH.”

16) Idaho: Jim Nunley of the Idaho Wildlife Federation defends National Monuments as a way of protecting public access to wildlife areas. “We’ve seen what bad ideas look like over the years—proposed mines, privatization of our public land resources and new decisions to drastically expand motorized use with no regard for elk security. Rather than waiting for the next crisis that will chip away at our hunting legacy, a national monument can be our Idaho-made insurance policy to pass camping, hunting and fishing on to our kids.”

17) Illinois: The Chicago Transit Authority is seeking private financing for all or part of a $27 million wireless upgrade for its subway system. “Work is expected to begin in November even before a private sector partner is found to finance all or part of the $27 million cost. The agency is able to start the project without private capital since it planned the project as part of its annual capital program.” [Sub required]

18) Illinois: A private ambulance company goes to the wrong Rockford address when responding to a shooting case that turns fatal. The victim’s father, Tim Barth, says “I want City Council to hear about it.You don’t privatize first responders.”

19) Massachusetts: Massachusetts Development Finance Agency gets a $3.9 million U.S. Department of Education grant to promote charter schools through a credit enhancement provision for school facilities. “With its own resources, these grants, and private sources to provide loan guarantees for Massachusetts charter schools, MassDevelopment has a fund of more than $25 million for this guarantee program.” [Sub required]

20) Michigan: Following revelations about maggots in its prison food service, Aramark has to fire four of its food service employees “after inappropriate sexual activities with prisoners at a state prison in Ionia.” A spokesperson says that at the end of this month MDOC will “take a look at any of the contract violations that have come to us and make a decision with our response.” The Times-Herald says “privatized prison services might be good in theory, but practice tells a different story. Michigan’s experiment with privatized prison food services is an unqualified bust. It’s time for Aramark to go.

21) Michigan: More than 1,000 people demonstrate in downtown Detroit to protest water cutoffs. “Wallace Turbeville, of the Demos Institute, said the shutoffs are likely connected to Emergency Manager Kevyn Orr’s proposal to regionalize DWSD or privatize the utility. Even though water department officials have said the aggressive campaign isn’t tied to the ongoing bankruptcy, Turbeville said there’s no other clear reason for the move. ‘They’re trying to fluff up the system … in order to sell it,’ said Turbeville.”

22) Michigan: Transportation Department efficiencies enable the second postponement of toll increases on the Mackinac Bridge.

23) New Jersey: New Brunswick privatizes its water utility to NJ American Water without any advance public hearings or informing the City Council. The council then rubber stamps the move anyway, and allows only very limited comment from the public. New Brunswick Today says “It’s just the latest example of the abuse of power in the city’s Orwellian dictatorship government.”

24) New York: Orange County officials propose 50 layoffs and an early retirement incentive in their budget proposal. The county legislature will vote on the issue August 7. Last week, Mayor Neuhaus said he will “include several hundred layoffs in his 2015 budget proposal unless the county’s Valley View Center for Nursing Care and Rehabilitation is on its way to being sold by then. A court ruling has blocked his effort to privatize the 360-bed home, so selling it would require a successful appeal or a second vote by the county Legislature to authorize the sale.”

25) New York: Massena Memorial Hospital administrators, unions, and the Town Council are to meet tomorrow in closed session to discuss alternatives to privatizing the hospital. New figures have been released by the hospital showing it going even further into the red. “Councilman John Macaulay said MMH union representatives are to come back with a ‘plan C’ to privatization, but no one yet knows what it may entail. ‘I’m not sure what they’re going to come up with,’ Macaulay said. ‘They need to have an accounting analysis of it so we’ll have something to make a decision from.’”

26) North Carolina: Taxpayer money to support private or religious schools may start flowing before a judge rules on the legality of the program. “But distributing the money before a court hearing late next month would cause needless chaos, said Burton Craige, an attorney for plaintiffs who are challenging the voucher program. ‘It’s taxpayer money. It makes sense to have a ruling on whether it’s constitutional before we release that money to private schools,’ Craige said. ‘Once money is paid out, it’s hard to get it back.’”

27) Pennsylvania: UIL Holdings Corporation reiterates its desire to buy the publically-owned Philadelphia Gas Works. But “Sam Bernhardt, the Pennsylvania Senior Organizer for the Food & Water Watch, released a statement on the proposed sale, urging city council to oppose the privatization of PGW. ‘The Philadelphia City Council should reject UIL’s push to privatize Philadelphia Gas Works (PGW),’ Bernhardt wrote. ‘This risky scheme could increase Philadelphians’ gas bills, hurt local jobs and endanger our community through new gas export facilities. The City’s ability to control this asset is important for the long-term vitality of the City, while privatization will only serve to pad the pockets of UIL’s shareholders. UIL may be persistent, but we are confident that the City Council will act to protect Philadelphians from this rotten deal.” The Utility Workers Union of America Local 686 opposes the deal. The City Council is awaiting an independent consultant’s report assessing the proposed sale.

28) Texas: A ceiling collapse at an East Texas prison owned by Management and Training Corporation is to be investigated today by the state. The collapse injured 19 inmates.

29) Virginia: Gov. McAuliffe gets behind plans for the improvement of I-66, including a “public private partnership” for the program. Transportation Secretary Aubrey Layne says “a public-private partnership on the I-66 program is quite likely, because of the high cost of achieving the major goals outlined in the initial study. ‘I don’t believe the project will come to fruition if we use only tax dollars,” he said. VDOT plans to release a Request for Qualifications in late 2014, have a shortlist by mid-2015 and issue a Request for Proposals by the end of that year. 


30) Washington: The League of Women voters warns that, if approved, an August ballot measure creating a tax district for public parks could lead to privatization. “The truth is, state law grants the MPD broad authority to build stadiums, buy more elephants for the Woodland Park Zoo, privatize our parks, finance a waterfront park, etc.—all without your vote. This is very different from levies.”

31) Revolving Door News: The Indiana Ethics Commission gives its blessing for two Department of Transportation officials to solicit employment with private companies that deal with the DOT. “The Star’s investigation also uncovered six I-69 deals that paid $1.86 million to Woodruff’s uncle and cousins, who then bought land from Woodruff and his family for more than market value.”

32) Think Tanks: The Education Policy Analysis Archives has published a new study on how school vouchers increase segregation and offer benefits to the few, using data from Chile.

33) Think Tanks/International: The Centre for Labour and Social Studies publishes University of Glasgow Professor Andrew Cumber’s report calling for initiatives “to take back utility sectors into public ownership. (…) A range of new and hybrid forms of public ownership are detailed in this report that offer solutions for dealing with the UK’s growing democratic deficit in the economy.” [Renewing Public Ownership]

Legislative Issues: 

1) National: The House passed a $11 billion Highway Trust Fund patch to keep the fund operating through next May. Senate majority leader Harry Reid “is seeking to set up votes for three separate proposals: the House-passed bill, a Senate Finance Committee alternative that is similar to the House bill and a plan from Sen. Barbara Boxer (D-Calif.) to extend current policy only through December in order to force Congress to act on a long-term bill in the lame-duck session.” Reid hopes to have votes on all three measures by the August recess.

2) National: Ellen Dannin looks at the new federal water infrastructure legislation. “The private water sector continues to campaign for amendments that will provide private activity bonds for water infrastructure.”

3) New York: Legal issues hang over the possible privatization of Nassau County’s massive sewage treatment system. A committee of the county legislature approved a $1.14 billion contract with United Water last week, but “while the committee’s three Democratic members voted for the contract, they have said it should have been subject to a vote by the full 19-member legislature.” In any event, the deal would have to be approved by the Nassau Interim Finance Authority.

4) Illinois: The League of Women Voters of Carbondale proposes a water ordinance to protect the public interest. The ordinance would include “standards to judge any water proposal or contract,” providing the public with “clear information about any water proposal,” and requiring “a super majority of the city council in order to sell, lease or outsource management or to enter into an agreement to significantly increase the usage of the city’s water.” The mayor says the council will consider the proposal.

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