Update: Upcoming Outsourcing Issues. May 26, 2015

1) National: Last week, several important elections were held that have an important bearing on public vs. privatized education. In Philadelphia, public education supporter Jim Kenney won big in the Democratic mayoral primary, earning congratulations from the Philadelphia Federation of Teachers. In the Los Angeles, results were split, as “Bennett Kayer lost his seat on the Los Angeles school board to charter founder Ref Rodriguez and charter supporter Tamar Galatzan lost her seat to retired public school educator Scott Schmerelson.” In Pittsburgh, “voters delivered a resounding message that they support the broad platform of education justice for the Pittsburgh Public schools.” The platform “was developed by Great Public Schools Pittsburgh, a coalition of labor organizations, faith based organizations, community organizations, and parent groups, all of whom were involved in grassroots campaign efforts—door-knocking, phone-banking, fundraising, and poll watching, in each of these school board races.”

2) National: The ACLU’s Carl Takei visits the Dilley, Texas, “Family Residential Center,” and finds that the CCA-owned and run, for-profit internment camp “tries to mask its nature with summer-camp-inspired euphemisms.” Takei writes, “immigration officials claim that this is a ‘safe and humane’ way to detain children and their mothers. But what I saw at Dilley was disturbingly familiar to me. During World War II, the U.S. government arrested my family because of their Japanese ancestry and locked them in prison camps that were euphemistically called ‘relocation centers.’ Historians generally agree that the wartime incarceration of Japanese Americans was wholly unjustified—a product of hysteria and racist, unsubstantiated beliefs that they were potential spies and saboteurs. (…) Today, immigration authorities under President Obama’s direction are needlessly inflicting the same trauma on families that arrived in the United States seeking protection.”

3) National: Project finance attorney Michael Curley offers some important guidance when considering “public private partnerships.” “The recent twist on P3s is this relatively new association with finance. P3s are looked upon as some magic, silver bullet to produce money out-of-nowhere for infrastructure projects. The hidden assumption here is that the ‘out-of-nowhere’ is actually some secret sources of money in the private sector. This is a very dangerous idea. Government has a moral mandate to provide infrastructure at the lowest possible cost to the people. So, the finance question with P3s is: which of the Ps is bringing the money to the table for the project. Is it the public P, or the private P? This question is crucial.”

4) National: Writing in a special issue on prison privatization of the Fordham Urban Law Journal, Alex Friedmann of the Human Rights Defense Center compares public and private prison costs. “[R]ather than trying to determine if prison privatization results in savings due to the shifting of costs from public agencies, this article takes an opposite approach by identifying costs that are shifted from privately-operated facilities to the public sector. An examination of such cost-shifting factors is essential when evaluating cost comparisons, to better understand how private prisons externalize expenses while internalizing profits.” [Sub required; December 2014 issue]

5) National: Flashpoints, the Pacifica Radio investigative newsmagazine, presents the tenth episode in its series on the past, present, and future of public education. The series began on March 18.

6) National/California: With rising taxpayer concerns about subsidizing private sports corporations looking for new stadiums, Goldman Sachs “has crafted a complex public-private partnership to build the nation’s most expensive stadium.”

7) California: Massive cost overruns continue to plague Orange County taxpayers from an IT outsourcing contract with Xerox. But “Orange County officials have yet to provide a cost breakdown requested months ago by the county’s largest employees union.” Nor have officials produced performance reports. “Is it that the county doesn’t know what those costs are still? Or that you’re still putting them together? Or that, you know, you don’t want the public to know about them? Or that there’s something else happening behind the scenes that we should know about?”

8) National: School Bus Fleet reports a steady increase in the percentage of school districts that have outsourced their bus services. “Here’s what we found in our previous editorial:

• 2007-08 school year: 25.6% contractor buses 
• 2008-09: 26.9% contractor buses 
• 2009-10: 28.1% contractor buses

Now, we’ve done the same calculations for the data we’ve compiled in the years since that editorial. Here’s what we found:
•    2010-11 school year: 28.3% contractor buses
•    2011-12: 30.0% contractor buses
•    2012-13: 34.7% contractor buses”

9) Florida: Miami-Dade Mayor Carlos Gimenez’s plan to privatize the Vizcaya Museum and Gardens becomes an issue in the 2016 election for the top county spot. “Regalado and Suarez say Miami-Dade should consider other options. Both suggested turning the property over to the county parks department for recreation space. ‘If we can’t afford it right now, fine. But let it be,’ said Regalado, a two-term school board member. ‘Why do we need to give it away right now?’ Suarez, who planned to join Regalado for a television appearance Thursday to discuss Vizcaya, made a similar argument. ‘I am not in favor of this extreme urgency to act,’ he said.” [Sub required]

10) Florida: Miami-Dade officials await staff recommendations, due in June, on proposals from legal and financial advisors for a “public private partnership” to replace the county’s aging courthouse. They expect to award contracts in July. The project will include both court and jail facilities. “The commissioners also approved establishment of two advisory panels, currently in formation, on P3 and court/jail facilities. At the same time, commissioners are educating themselves on P3s. On March 13, the Strategic Planning & Government Operations committee invited representatives from Nossaman LLP to share experiences and best practices gained from their work on public-private partnership projects. On May 12, the committee heard a presentation regarding taxpayer protection for P3s by Donald Cohen, executive director of In The Public Interest.”

11) Georgia: Savannah-Chatham Public Schools consider cutting back bus services to charter and specialty school students. The district has outsourced bus services to MV Transportation. “Often that means several pricey bus routes have to be created to transport a small number of students across the county to attend these schools.”

12) Massachusetts: Outsourced maintenance work for the MBTA comes under fire. “The contract for the motor repairs is being criticized by the Boston Carmen’s Union as wasteful spending by T management and an example of how outside private contractors don’t always measure up. ‘We do it in-house quicker and cheaper,’ said James O’Brien, president of the Carmen’s Union, which is fighting legislation filed by the Baker administration that would ease state privatization restrictions. (…) Because the contract amount was less than $500,000, the T did not have to satisfy the privatization requirements of the Taxpayer Protection Act, which is more commonly referred to as the Pacheco Law, named after its sponsor, Sen. Marc Pacheco of Taunton. Both Gov. Charlie Baker and the House want to exempt the T from the Pacheco Law, but the Senate is balking.”

13) Michigan: Aramark may want a raise, despite extensive criticism of its performance delivery on its food service contract with the state’s prisons. “So, the state has invited a competitor, Florida-based Trinity Services Group, in as part of a ‘benchmarking review,’ to look at food service costs. (…) Nick Ciaramitaro, legislative director for American Federation of State, County and Municipal Workers Council 25, which represented the state kitchen workers, said he predicted when the contract was awarded that Aramark would come back asking for more money. ‘That’s usually what happens,’ Ciaramitaro said. ‘We may end up paying more for services that are nowhere near as good as what the state employees are providing.'”

14) Michigan: Karen Twomey and Thomas C. Pedroni reject several proposals that would further fragment Detroit’s public schools, including one that would introduce “portfolio-style management of Detroit’s increasingly fragmented educational landscape of Detroit Public Schools, the Education Achievement Authority and charter schools.” They call for an end to the state’s running of the system, restoration of full power to the school board, and “ongoing training and support for the board to maximize its efficacy and professionalism.”

15) New Jersey: Newark students walk out of class and gather at City Hall to protest state control of their school system, and demand it be returned to local control. “It was just the latest sign of extreme tension in the district surrounding superintendent Cami Anderson and her often-contested plans to reform the struggling system, including the growth of charter schools.” Bob Braun writes that the impasse has created a political crisis in Newark: “Anderson need not fear that her budget cutting will cause more hurtful chaos in the already trouble-plagued Newark schools. Causing ‘disruption’ is a primary focus of the Broad Academy and its plans for urban schools. The more disruption, the faster the progress toward creating an all-privatized school district, like that in New Orleans–and the Louisiana Supreme Court reminded public employees just the other day just how fragile their rights are.”

16) New York: As public schools struggle under massive budget pressures, elite private schools binge on debt to provide attractive facilities and services for the rich and privileged.

17) Ohio: The Ohio Charter School Accountability Project issues a report detailing the shortcomings of online charter schools. “Through its collaboration with the Ohio Education Association and the Ohio Charter School Accountability Project, Innovation Ohio has taken another look at Ohio’s E-schools. While some E-Schools have seen slight performance improvements, the situation has gotten worse because now 10,000 more students attend and an additional $70 million are being spent on schools that, on average, graduate barely 35% of their students.”

18) Oregon: Student Transportation Inc. expands into the state with a five year, $3 million contract with Lake Oswego School District. “STA will be holding informational sessions with current drivers and personnel, who will be given the first opportunity to work for the company, officials said.”

19) Pennsylvania: The National Labor Relations Board has blocked a representation vote at a charter school after the union filed an unfair labor practices complaint. “The Alliance of Charter School Employees union claims that Stetson, which is managed by charter operator ASPIRA Inc. of Pennsylvania, has violated federal law.”

20) Virginia: Drivers are winning in court against Transurban, the private Virginia Express Lanes operator that has levied massive fines against them for allegedly not paying tolls. “Circuit Court Judge Dennis J. Smith ruled in April that Express Lanes operator Transurban must sue drivers for unpaid tolls within a year. Toni Cooley, Jim Diller and Stuart Holmes all won their cases with the decision, and the fallout has been felt ever since—six cases were dismissed [last] Monday because Transurban waited too long to sue, and more will likely be dismissed in the coming weeks.” The judge will rule on the entire case soon.

21) West Virginia: The Central West Virginia Transit Authority is to improve its public information access policy. The CENTRA board “discussed upcoming changes in state laws regarding Freedom of Information Act requests. [Board Counsel Trey] Simmerman noted that CENTRA will have to ensure that, starting next month, it no longer charges a retrieval fee related to records requests. Simmerman also discussed additional reporting to the West Virginia Secretary of State’s office that will be required beginning in 2016.”

22) International: FirstGroup, the parent company of North American bus outsourcing companies First Student and First Transit, reportedly fails to pay its workers in Scotland a living wage.

23) Upcoming Event: The PICO National Network and the Center for American Progress will be holding a discussion on mass incarceration and overcriminalization. Topics include “how we can begin to reverse the trend of overcriminalization of people of color and address it
s lasting consequences, including reforming policing practices and removing barriers to opportunity for people with criminal records.” This Thursday 9-11 am eastern time in Washington, DC.

Legislative Issues:

1) National: As state lawmakers across the country wrestle over federal common core curriculum standards for schools, increasing numbers of parents opt out of the tests based on them. “Across New York State, a small if vocal movement urging a rejection of standardized exams took off this year, maturing from scattered displays of disobedience into a widespread rebuke of state testing policies.” Parents have challenged the tests for containing age-inappropriate and poorly formulated questions, forcing teachers to teach to the tests rather than focusing on broader educational goals, and for profiteering: “Public school children are being cheated of proper resources—smaller classes, more books and other educational supplies related to a richer curriculum—while testing companies reap handsome profits for their shoddy products.”  There is also a “backlash in state legislatures that weren’t involved in their development. So some states have chosen to develop their own goals.”

2) National/International: As Congressional debate on fast track trade authorization takes center stage, The New York Times‘ Paul Krugman and others warn that the dispute resolution mechanism could “compromise the independence of U.S. domestic policy.” He writes, “a leaked draft chapter shows that the deal would create a system under which multinational corporations could sue governments over alleged violations of the agreement, and have the cases judged by partially privatized tribunals.”

One issue that has not been widely discussed is the potential impact on bidding, contract-awarding, performance targets and oversight processes for infrastructure “public private partnerships” involving foreign corporations (ACS, Abertis, e.g.), or for government services (FirstGroup/First Student, Pearson, e.g.). Would, e.g., environmental approvals of road projects under NEPA be subject to overruling by such a tribunal? Transparency laws? Project finance?

3) California: The California Teachers Association is supporting four bills in the state legislature around charter school transparency and accountability. AB 709 requires charter school compliance to open meetings and open records laws, and eliminates conflicts of interest in the charter school environment. SB 322 would eliminate discriminatory admissions requirements/preferences and require compliance with the same laws regarding suspensions and expulsions that apply in traditional public schools. SB 329 would define the capacity of charter school authorizer to do oversight, require competitive bidding at charter schools, and consider the impact new charter petitions would have on neighborhood schools. AB 787 prohibits a charter school from being run as or by a for-profit corporation and ensures charter school educators can continue to unionize.

4) California: Authorization to build the Long Beach Civic Center passes the state senate (SB 562). Despite repeated assurances that the term of the “public private partnership” would be shorter, the deal has now ratcheted up to 50 years. “Plenary-Edgemoor Civic Partners was selected in December as the firm to design, build and finance a new Civic Center, which has been targeted for replacement because studies have shown it is seismically deficient.” The bill now goes to the assembly.

5) New Jersey/New York: Public records access legislation on the Port Authority advances in New Jersey. But “lawmakers in both states were also working on new versions of another Port Authority reform bill, vetoed outright by Christie and Cuomo in December, that involved reporting requirements, whistle blower protections and other provisions intended to enhance transparency and accountability.”

6) New York: A bill to create a monitor to oversee the Ramapo school board meets resistance. A school board “dominated by Orthodox Jews has drawn criticism for diverting money from public schools to children in local yeshivas. (…) Spending on the transportation of students to private schools has increased sharply, and the district has in some cases paid for special education students to attend private schools when similar services were available in public schools. Parents of public school students have grown distrustful of the board, whose meetings have at times devolved into shouting matches between members and the public. In February, two Assembly members and a state senator who represent the district introduced a bill that would empower the state education commissioner to appoint a monitor for five years, with the option of extending the term to 10 years. Since then, both supporters and opponents of the bill have lobbied legislators furiously.”

7) Ohio: The Portsmouth Bypass, the state’s first road “public private partnership,” will cost taxpayers $1.2 billion, nearly three times its original price tag—which was quoted repeatedly by state officials and the media during the approval process. “Previously, state officials said the project, 90 miles south of Columbus, would cost $429 million, but that figure represents only construction costs. Left out are interest, financial-transaction costs and other charges developers incur and that the state ultimately pays. The number also doesn’t include highway maintenance over 35 years, which the $1.2 billion will cover.”

8) Texas: Lawmakers grapple with the issue of design-build vs. traditional design-bid-build vs. “construction manger at risk” (CMAR) models for complex public projects. [Different delivery methods explained]. “Under the new approach—called design-build—the two steps were joined. By hiring one or two companies to simultaneously design and build a project, chances to save time and money would theoretically emerge. But four years later, the approach has produced mixed results. Some Texas companies complain that design-build shuts them out, letting a few large companies dominate the field. Officials with some cities that have tried it say the model has led to spiraling contract expenses without a faster delivery time. Arguing that Texas still has some lessons to learn, a handful of lawmakers
are scrambling to pass legislation that would put limits on the continued use of alternative contracting methods.” Others argue that design-build is more efficient. A Senate bill has been introduced to extend the current limit on design-build projects; and a House bill has been introduced to restrict how CMAR contracts are awarded.

9) Texas: Legislative battles over public vs. privatized schools heat up. “Senate Bill 669 by Royce West (D-Dallas) would allow the state to take control of low-performing schools, thereby superseding the authority of locally elected school boards. (…)  The bill would then allow TEA to turn the schools over to private charter operators, among other options. (…)  At the same hearing, Patty Quinzi of the Texas chapter of the American Federation of Teachers argued that the new state-run district was ‘basically a business opportunity and that’s it. … This was a bill that was designed by the American Legislative Exchange Council, which is co-chaired by private charter school managers.'”

10) Texas: A bill is on Gov. Abbott’s desk that makes some private college police records subject to release to the public. “The bill’s sponsor, Houston Democratic Sen. John Whitmire, said he filed it after Rice University declined to release information about an incident in 2013. That’s when police used batons to hit a suspected bicycle thief who they claim resisted arrest.”

11) Washington: Thousands of teachers and support staff march through downtown Seattle in a one-day strike to demand that lawmakers put more money into public schools. “Participants held signs, demanding that state lawmakers meet the Washington State Supreme Court mandate to fully fund public schools. ‘I think it’s getting through to people. I just hope it’s getting through to the legislature,’ said Meghan Schusger, a Seattle elementary school teacher. Participants wore red in solidarity, and said they were not only marching for themselves, but for their students.”

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