In the Public Interest - A Comprehensive Resource Center on Privatization and Responsible Contracting

Privatization Scan November 21, 2011

Mon, 21 Nov 2011 16:08:45 +0000

Update: Upcoming Privatization Issues. November 21, 2011

1) National: Republicans on the Congressional Super Committee demand the privatization of Medicare. "Even if the Super Committee process stalls, the future of Medicare will be a key issue in the 2012 Presidential race, and any restructuring of the program would impact billions of dollars of healthcare spending and tens of millions of beneficiaries. How would privatization impact seniors?"

2) National: Infrastructure privatization market still "small and fragmented" in the U.S., and faces "resistance in general to bend the public funding model," panelists say at industry conference. "A secondary trading market is also starting to develop again after many years, according to DiPrinzio. JPMorgan, for example, has started to assemble a team to trade P3 finance loans, and other banks have put out lists of projects in their portfolio to get some ‘recycling of their credit and free up balance-sheet capacity,' he said." [sub required]

3) National: Overwhelming demand for TIGER III transportation funding leads to requests for $14.1 billion in funding from a $527 million Federal pot of money. TIGER grants can be used to fund "public private partnerships" (e.g., $46 million went to the Presidio Parkway project in California).

4) National: In letter to the editor, veteran opposes former Gov. Romney's proposal to privatize the Veterans Health Administration. "I am not an expert, but I respectfully disagree. There is lots of evidence about how private-sector competition in health care works, and it is not favorable."

5) National: Privatization of public liquor distribution operations boosts company bottom lines. More efforts to privatize expected. "Companies including Costco, bourbon maker Beam Inc. and Warren Buffett's Berkshire Hathaway Inc., which owns food and alcohol distributor McLane Co., may gain a larger share of the $8.5 billion in gross sales last year in the 18 states where liquor is still controlled."

6) National: Lack of government funding may stymie privatization of space operations.

7) California: Ventura city council rejects privatization of libraries; stays in county library system. "Thomson was one of about 20 people who spoke on the matter. Most urged the council not to hire a private company to run the library, as Moorpark and Camarillo have done and Simi Valley is considering."

8) District of Columbia: Group inspired by Occupy DC occupies an abandoned building the city wants to privatize to protest lack of housing for homeless people. Organizers have called for a community meeting November 21 on the issue of the building's disposition.

9) Florida and National: Analysis of former Gov. Jeb Bush's efforts to promote online education finds that the initiative "siphons money from public institutions into for-profit companies (including those that are supporting Bush's initiative) [and] undercuts public employees, their unions, and the Democratic base. In the guise of a technocratic policy initiative, it delivers a political trifecta-and a big windfall for Bush's corporate backers." Sidebar: "Jet Skis, Scottish Real Estate, Louis Vuitton Bags: How Crooks Have Cashed in on the Charter School Boom." [Stephanie Mencimer, "Left Offline," Mother Jones, November/December 2011].

10) Florida: Battle against prison privatization to continue after change in representation of the state's 22,000 correctional and probation officers.

11) Georgia: Gwinnett county officials to hold conference call November 22 with pro-privatization consultants IMG to discuss proposals process for privatization of airport. "In an unrelated matter, the Gwinnett BOC voted Tuesday to apply for up to $1 million in state grants for airport infrastructure upgrades."

12) Illinois: City council unanimously approves Mayor Emanuel's budget privatizing seven of Chicago's community health clinics. Cutbacks protested.

13) Illinois: City of Rolling Meadows considers privatizing trash collection. "Rolling Meadows residents now can call the city and ask for a special pickup, such as old furniture, at no additional cost-a service Rooney said is likely to go away if the city moves forward with privatization. Companies may still pick up those items, but at an additional cost to residents."

14) Maryland: Annapolis city council votes to privatize trash collection despite strong showing by opposition at meeting. "The proposal request will not include snowplowing and street-salting." Proposals to be reviewed by a committee. "We care about the city because the majority of us were born and raised in Annapolis. And you're talking about bringing in people who aren't from Annapolis who really don't care."

15) Michigan: Detroit Mayor Bing proposes privatizing the city's bus system and public lighting system as part of austerity program. "Privatization is a murky option because city councils can be pressured to sign deals that prove detrimental in the long run, says Evan McKenzie, a political scientist at the University of Illinois at Chicago. McKenzie warns that Detroit should learn the lesson from Chicago and ‘not grasp at straws. The history of these short-term fixes is very dismal,' he says. ‘If you privatize a previous public function, people no longer have political control over it. Then you have a monopoly.'"

16) New Hampshire: Gov. Lynch moves to privatize operation and construction of prisons. Issues request for proposals. Proposals due January 26, 2012 for male prison, February 15, 2012 for female prison, March 1, 2012 for hybrid facility. Meanwhile, Bureau of Prisons budget authorization provides for opening of facility in Berlin, NH staffed by BOP personnel. "Annual salary for corrections officers at the prison is $38,619. After 10 years at the prison, with good evaluations, that salary surpasses $48,000."

17) New Jersey: South Jersey Transportation Authority votes to privatize collection of tolls on Atlantic City Expressway. Gov. Christie to review decision. "Faneuil Inc. of Hampton, Va., would hire employees and pay them less than the $30 an hour full-time collectors earn on the Expressway." John Lowden, Atlantic area vice president of the International Federation of Professional and Technical Engineers, says "The people who work there, they care about the road. That's part of the culture. There's a vested interest. It isn't about making a profit. It's about doing a public service. The issue isn't unique to here. The privatization efforts are going on all throughout the state and in other places, but they're not what they're cracked up to be."

18) New Jersey: Englewood supplements its volunteer ambulance service by contracting with Englewood Hospital and Medical Center to provide services. "This is a potential win-win to maintain our volunteers and enhance them and get the backup of a major medical institution," Mayor says.

19) New Jersey: Deadline passes for receipt of proposals for privatization of road maintenance and snow removal. "It's been proven over and over again we've been able to do the work cheaper," says chair of Local 195 of the International Federation of Professional and Technical Engineers.

20) New Jersey: Sierra Club weighs in against Gov. Christie's efforts to privatize public parks. "If this plan goes forward we will be selling off our heritage and our public lands. The governor wants to subdivide buildings on our state lands and sell them off to private hands. Structures that cannot be easily subdivided will be leased. Christie's monetization plan is building on and selling off parkland."

21) New York: Proposals are due November 23 for a financial advisor to the state DOT for the est. $5.2 billion Tappan Zee bridge replacement project. Asks bidders to "please identify in particular (i) major bridge projects, (ii) design-build projects, and (iii) Public Private Partnerships. This will include a sophisticated sense of what makes projects successful, gained from active involvement in RFP development, risk allocations, and contract negotiations as well as familiarity with potential bidders" (p. 17). Advocates continue to push the state to include a public transit component in the project.

22) New York: Public hearing to discuss the privatization of the Long Island Bus service to Veolia postponed. Deal scheduled to take place on January 1, with little time to review the 332-page contract. Might be an issue over "the enforcement of a provision in the federal transportation law known colloquially as ‘13C,' which could obligate the county to maintain comparable wages, pensions and benefits for six years even if the system is run by a private operator."

23) New York: Mayor Bloomberg plans to privatize four marine transfer stations that are part of the New York City's comprehensive sanitation system. "For the environmental justice folks this privatization means that the transfer stations will not be coming any time soon-with litigation and a lengthy bidding process very much in the way. Who in the private sector is going to step up to bid under these circumstances?"

24) New York: Questions raised about public control, accountability and transparency in New York City outsourcing practices. "Private firms are being hired not to provide services or IT know-how, but to tell the city how to run its existing programs-crafting its policy, strategy and management. Accenture, Alvarez & Marsal, Boston Consulting Group and McKinsey have been summoned to guide the city through everything from rebranding city departments to restructuring the budget for city schools."

25) Ohio: State plans to privatize highway rest stops. "Ohio has 59 such spots, which range in size from 40 acres to four acres, [chief of staff of the Ohio transportation department] said. A tentative plan would have the state lease the land to a private firm or developer for between 30 to 50 years, he said. ‘We would turn over the land and they can bulldoze it and put up a McDonald's,' he told the audience." RFPs may be released by year's end. [sub required]

26) Oklahoma: Ada city council votes to privatize its sanitation services and offer roadside recycling. Contract awarded to WCA Waste Corporation, which operates in 14 states including Oklahoma.

27) Pennsylvania: State department of corrections proposes privatization of jobs of public health care workers and nurses. "State Rep. Mike Fleck, R-Huntingdon, and Sen. David Argall, R-Schuylkill, introduced a measure on Tuesday in Harrisburg that would bar the department from hiring private contractors." Proposals being reviewed by state.

28) North Carolina: Wilmington Star-News editorial denounces proposal to privatize The Althea Gibson Tennis Center, only five years after a bond proposal was passed to support the public tennis facility. Wants to preserve "residents having ready access to the courts... children laughing and learning as they participate in the programs presently offered (with more programs to come)... state tournaments being held for adults and seniors (past 2 weekends) with little to ‘win' but sportsmanship and fun..."

29) Texas: National Council for Public Private Partnerships to hold meeting in Austin on "PPPs and Texas SB 1048" on January 25, 2012. SB 1048 is the state's new facilities and transportation privatization legislation, which became effective on September 1, 2011.

30) Texas: Department of transportation issues request for proposals for statewide toll integration and maintenance (due date January 4, 2012).

31) International: British treasury secretary declares current system for private financing of public infrastructure dead in its current form. PFI, once touted as bringing market efficiencies to government, had been widely criticized for gouging the public, promoting inefficiency, and becoming a financial burden.

32) International: Hochtief, the German infrastructure group, reports that "‘the economic crisis in Greece and persistence [of] mass toll dodging led to major shortfalls in income development' for the two toll road projects it has in the country. The Hochtief spokesman said the developer was ‘checking if we have to take provisions or not. If we take provisions it'll be for Q4,' he explained." [sub required]

33) Think Tanks: PICO and Public Citizen release report on the role of the profit motive in driving up incarceration rates. "The explosion in the number of inmates and corresponding growth in revenue for private prisons is no accident. It has been part of an intentional effort by the private prison industry to shape public policy to push more people into prison and keep them there longer."

34) Revolving Door News: George Hatalowich, fired by the Pennsylvania Turnpike in March 2011, joins Parsons Brinckerhoff. "As chief contracts officer 2003 to 2007 and as chief operating officer (COO) 2007 to late 2010, he was reported to be a leading practitioner of political pay-to-play with contractors and consultants." Parsons Brinckerhoff submitted a letter of interest in privatizing the turnpike in 2006.

35) Privatization industry networking: National Council for Public-Private Partnerships releases 2011 Annual Report. Outlines state-focused meetings in Virginia, California, Michigan, Illinois, Arizona, Florida. "At the state level, NCPPP is working with the State of Maryland's Public-Private Partnership Commission to develop proposals for consideration by the state's legislature. In Arizona, in cooperation with the state's Department of Transportation, a workshop was conducted to review the current statutes and suggest areas for improvement."

Legislative Issues:

1) National: House Republicans preparing legislation to reform the Transportation Security Administration; demand privatization. "But a TSA spokesman said the agency had approximately 56,000 security officers in 2002, the year it started screening, and has approximately 52,000 today." [Republican Report]. Gov. Perry proposes turning TSA into a "public private partnership."

2) Pennsylvania: Legislation moving forward to privatize state's roads and highways. "One group he said that is ready to do business in the state is Goldman Sachs. The company has frequented capitols around the country for years touting the benefits of signing over state assets to private developers." Includes legislative review and blocks privatization of Pennsylvania Turnpike unless legislature approves it. "Time is running out for lawmakers to consider the bill this fall. State lawmakers are scheduled to be in session nine more days until year two of the two-year session begins in early January."

3) Pennsylvania: Op-ed by school board member opposes school voucher legislation. Voucher bill recently passed Senate. "There were concerns that Republican leaders were going to push the bill through the House of Representatives to have it passed before the end of the year, but that scenario seems unlikely now."

Zoo Story

Wed, 05 Oct 2011 20:33:05 +0000

By Donald Cohen

Zoos are complex places - literally. Each time I enter one, I'm filled with a nagging ambivalence between competing views and emotions. On one hand, I think about the animals forced to live in enclosed compounds far from their natural setting. But on the other hand, I'm filled with childlike awe and wonder as I watch gorillas, elephants, hippos and the many bird, amphibian, reptilian and mammalian specials that I'd never even heard of.

Zoos have made real progress in how they treat their captives. It's no longer standard practice - as it was in the zoo of my youth - to keep the animals in small oppressive cages. Today, zoo enclosures mimic natural animal habitats. They're bigger and have corners and caves where animals can hide from the crowds

So, I've come to the intellectual and emotional conclusion that zoos are good institutions that serve critically important public purposes. Seventy nine percent of all Americans live in urban areas, disconnected from nature, strangers to and unfamiliar with the flora and fauna with which we share the planet. In our increasingly gadget-immersed lives we have a greater understanding of the internet as a "place" with a nearly infinite number of sites to virtually visit and explore than we do of the nook and crannies of forests, savannah, oceans and deserts around the world.

A connection to nature has a huge impact on our lives and the future. Author Richard Louv writes about increased stress and greater incidence of ADHD from what he refers to as "nature deficit disorder." In zoos children can see biodiversity with their own eyes and come to profoundly understand the impacts of environmental destruction on our rain forests, our oceans and our lives. Zoos are one of the few urban experiences that help us all - adults and children alike - increase our respect for the natural world around us, understand that we aren't the Earth's only inhabitants and fully realize that it's worth saving.

An appreciation for the natural world around us is so important that we can't leave its future up to "the market." Some in L.A. City Hall, as well as reflexively anti-government activists elsewhere, are arguing that operating zoos is not an appropriate role of government. They are wrong. They are vital educational institutions that have underappreciated benefits for health, environmental sustainability and the good society.

Zoos are among the institutions that make us - well, us. They ensure that everyone - from low-income families to the wealthiest - at least occasionally share the same space and the same project of understanding and appreciating the world around us.

Public zoos open that space and experience for us all - not just those that can afford entrance fees or a vacation in the mountains - to become better stewards of the planet.

Privatization advocates argue that Los Angeles will save money if someone else - non-profit or for-profit - runs the zoo. Wrong again. We have few choices in how to pay for our zoos. We can raise admission and membership prices but the higher you raise the fees, the more damage you do to the public mission of making the zoo an accessible experience for low and moderate income Angelenos. You can increase the amount of philanthropic and corporate sponsorships but that is already happening in zoos across the country.

In fact, despite recessionary budget shortfalls in cities across the country, 40 percent of all zoo operating funds still come from local governments. L.A.'s Chief Operating Officer Miguel Santana has already said that the city's general fund will continue to need to support our zoo.

Money doesn't grow on trees and privatization doesn't change that. What it does do is jeopardize the very public role of one of our most valuable and important educational institutions.

*Original version was published in LAANE's new blog, The Frying Pan

Let Us Know

admin — Tue, 12 Jul 2011 22:23:41 +0000

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Chicago's Parking Meters

Shar — Thu, 10 Dec 2009 19:03:27 +0000

In February 2009, the City of Chicago and Chicago Parking Meters LLC signed a 75-year concession agreement for the long term lease of Chicago's 36,000 parking meters. The city received an upfront payment of approximately $1.2 billion. The procurement process lacked transparency and was rushed, as the city's Inspector General later concluded. Within months, parking rates soared and many meters were malfunctioning or mislabeled. Chicago residents complained about the difficulty of parking in the city, while business owners watched their retail traffic decline.

Felton Water System

Susan — Wed, 02 Dec 2009 05:00:00 +0000

Facing repeated rate increases of up to 78%, residents of the small town of Felton, California, organized to buy back their water system from a subsidiary of a huge German corporation. By applying the pressure of an eminent domain lawsuit, the community won local ownership and control of its water.

Friends of Locally Owned Water

Michael — Wed, 22 Jul 2009 03:03:35 +0000