February 4, 2008

Headlines

1. GAO: Failing contractors still getting work in Iraq
2. Editorial – Privatization: State targets local government services
3. Congress may throw wrench in Texas public assistance privatization plan
4. NY State takes steps to privatize lottery
5. Manhattan ballfields stay public – judge
6. Indiana keeps control of state hospital
7. Penn: Allegheny county exec. seeks to privatize parks
8. Editorial – Another mark against former CT Gov. Rowland
9. Indiana toll road opponent to run for governor

News Summaries

1. GAO: Failing contractors still getting work in Iraq
ITT Federal Services International, a defense contractor hired to maintain battle gear for U.S. troops in Iraq, repeatedly failed to do the job right, according to a GAP audit and reported by the AP. Formal "letters of concern" were sent to the contractor. Still, the Army didn’t fire ITT. Instead, it gave the Colorado Springs, Colo.-based company more work to do. Since October 2004, ITT has been paid $638 million through the Global Maintenance and Supply Services contract. The Army’s ongoing arrangement with ITT, detailed in an audit from the Government Accountability Office, shows how captive the military has become to the private sector for overseas support. Even when contractors don’t measure up, dismissing them may not be an option because of the heavy pace of operations.

2. Editorial: Privatization: State targets local government services
Today’s Salt Lake Tribune’s editorial examines the state’s efforts to privatize many local government services: "In the past, state lawmakers have only considered privatizing services provided by the state, like prisons and the state mental hospital. But now they’re turning their guns on local governments, and attempting to usurp the power of local elected officials. It has municipal officials worried, including recreation managers in Salt Lake County, where the public can swim, golf, skate or exercise at 38 separate facilities."

3. Congress may throw wrench in Texas public assistance privatization plan
In a direct response to problems in Texas, Congress is considering new limits on the role that private companies can play in states’ public assistance programs, according to the Austin American Statesman. A provision in a major farm bill approved by the U.S. House would bar states from allowing employees of private firms to interact with people who are applying for food stamps or to decide someone’s eligibility for the program. The measure could force Texas to rework its plans to privatize food stamp enrollment. The author of the provision, U.S. Rep. Joe Baca, D-Calif., said it was inspired in part by problems in Texas, where some eligible families were improperly denied food stamps, Medicaid and cash assistance during a 2006 privatization test in the Austin area. "The disastrous attempt to privatize food stamps in Texas was a large reason behind my anti-privatization provision in the House farm bill," Baca said. "The Texas project was a complete fiasco."

4. NY State takes steps to privatize lottery
State officials have formally started the process to hire an independent investment adviser to guide Gov. Eliot Spitzer’s proposal for privatizing the state lottery.
Spitzer wants to open the lottery to private investors, using money made on a potential lease to start and sustain an endowment funding the State University of New York system. Spitzer has said any offer must include at least $4 billion in upfront payments, reports the Business Journal.

5. Manhattan ballfields stay public – judge
A Manhattan judge blew the whistle on a city plan to turn public ballfields on Randalls Island into playgrounds for students at the city’s most elite private schools, reports New York’s Daily News. The decision by Supreme Court Justice Shirley Werner Kornreich voids a controversial deal first reported by Daily News columnist Juan Gonzalez. Under the failed plan, 20 private schools, including Dalton, Spence and Chapin would have been granted near-exclusive use of the fields during peak after-school hours, in exchange for paying millions to the city. The judge sided with East Harlem activists and parents who sued, ruling that the city sidestepped the proper land-use review process when it cut the deal to build new ballfields and rehab existing ones on Randalls Island.

6. Indiana keeps control of state hospital
A plan to privatize the operation of Indiana’s Richmond State Hospital has been shelved for financial reasons, the secretary of the Indiana Family and Social Services Administration said Friday and reported in the Richmond Palladium. The state hospital, which employs 600 people and cares for 300 patients from across the state, will remain open as a state-operated facility, Mitch Roob said. No employees will lose their jobs, he said.

7. Penn: Allegheny county exec. seeks to privatize parks
As skiers and sledders careened down Boyce Park’s snowy hills Saturday morning, Pennsylvania’s Allegheny County Chief Executive Dan Onorato told a crowd of about 150 people gathered in the ski lodge that the slopes could be better operated by a private group than the county. In three to six months, the county plans to seek bids from private businesses to operate the slopes along with golf courses, horse stables, tennis courts, boat houses and other amenities in the county’s nine parks, according to an article in the Pittsburgh Tribune-Review. Yesterday, Onorato conducted a town hall-style meeting to ask park users for suggestions on other facilities that could benefit the parks. "What we’re going to start doing is looking at all nine parks," Onorato said. "We’re going to rethink the way we’re running our parks."

8. Editorial: Another mark against former CT Gov. Rowland
An editorial in the Connecticut Post responds to the recent report from the sate attorney general’s office finding that a privatization contract under former Connecticut Gov. John Rowland’s watch cost the state upwards of $80 million: "It’s a right-wing dream to privatize as many aspects of government activity as possible, with the theory that private industry has to answer to the market, while government work is bloated and unaccountable. But this is another instance that shows how a lack of oversight can make matters far worse that whatever problem was supposed to be solved to begin with. Privatization can work only if people actually watch what’s happening."

9. Indiana toll road opponent to run for governor
One of the leading opponents of the Major Moves toll-road lease that funded Interstate 69 construction is planning to announce his candidacy for governor, according to the Evansville Courier & Press. Steve Bonney is scheduled to announce in Indianapolis that he is running for governor in 2008 as an independent and is starting the process of collecting petitions to get onto the ballot. Bonney, an Army veteran and self-employed organic farmer, was the lead plaintiff in a lawsuit brought against the state in 2006. It challenged the constitutionality of the Major Moves lease of the northern Indiana toll road, a funding program that Gov. Mitch Daniels advocated.

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February 1, 2008

Headlines
1. Conn. AG: State botched $80M deal on workers’ comp claims
2. Public libraries find outside management
3. Governor Privatize
4. New rules urged for Arizona private prisons
5. Milwaukee county sheriff blasts bus security firm
6. Columbus editorial: The right recipe: privatizing city schools’ food service
7. New Haven city school food service company face allegations

New Summaries
1. Conn. AG: State botched $80M deal on workers’ comp claims
High-ranking state officials and a private consulting firm made questionable and ill-informed decisions that led to an overpriced $80 million deal involving state employees’ worker compensation claims, Connecticut Attorney General Richard Blumenthal said Thursday, reports TheDay.com. In 2001, officials with the Department of Administrative Services completed the deal with ACE Financial Solutions, which agreed to assume up to $150 million in potential liability from 660 workers’ compensation claims.The state, by privatizing the handling of the claims, reduced the number of workers’ compensation cases it was handling and saved $13.5 million in both 2002 and 2003. But a private consultant’s analysis that resulted in the $80 million figure was seriously flawed, Blumenthal said, leading him to assume that the state overpaid ACE and wasted taxpayers’ money. Much of the analysis was done by unqualified college students, he said. “The state should have paid and could have paid less money to resolve these workers’ compensation claims,” Blumenthal said. "Privatization spawned inefficiency, incompetence and increased costs,” Blumenthal said. “We must reform conditions — lack of funding and procedures — that led to this bungled deal.”

2. Public libraries find outside management
The American City and County examines how cost concerns have lead local governments to outsource management of libraries. "In recent years, many public libraries have faced the threat of closing or reducing services as the local governments that run them tighten their budgets. The difficulties have led some cities and counties to consider turning over their public libraries to private management companies.

3. Governor Privatize
Indiana Governor Mitch Daniels is the foremost advocate of privatizing — even at his political peril, reports Governing.com. "Nevertheless, Daniels remains the most ambitious privatizer of any governor currently in office, turning over to outside entities not just control of a major cross-state highway but prisons, hospitals and welfare case management. Like most privatizers, Daniels doesn’t like the term, but his pursuit of the idea led the New York Times last summer to dub him ‘Governor Privatize.’"

4. New rules urged for Arizona private prisons
Arizona Gov. Janet Napolitano wants to tighten up rules for the state’s growing private-prison industry, which is virtually unregulated by the state, reports The Arizona Republic. A legislative proposal drafted by the Governor’s Office and introduced by Republican Sen. Robert Blendu of Litchfield Park would bar private prisons from importing murderers, rapists and some other dangerous or seriously ill felons to Arizona. It would also require the companies to share security and inmate information with state officials.

5. Milwaukee county sheriff blasts bus security firm
Milwaukee County Sheriff David A. Clarke Jr. on Thursday blasted the private security firm hired to guard local buses, questioning whether the $1.1 million annual cost was worth it, reports the Milwaukee Journal Sentinel. Wackenhut Corp., an international company headquartered in Florida, has provided security for Milwaukee County Transit System buses since 1993. Clarke said in a letter to the County Board that the company had "top-heavy administration that leads to fewer people actually performing a security function."

6. Columbus editorial: The right recipe
An editorial in The Columbus Dispatch says that privatizing city schools’ food service is a good idea that has languished too long. "At long last, Columbus City Schools officials are taking steps to end a needless drain on the budget. By turning over the district’s elementary-school food-service operation to private contractors, as Superintendent Gene Harris has recommended, the district could save $4.3 million per year."

7. New Haven city school food service company face allegations
Yale Daily News reports that Aramark, the food-services company formerly employed by Yale University Dining Services, is now facing allegations of mismanagement and poor food quality from cafeteria workers and custodians in New Haven Public Schools.Complaints about Aramark began in late November when a few parents expressed concern over the food quality at a school board meeting and have escalated to today’s union-led protest rally at Cooperative Arts & Humanities High School in New Haven. The rally is being organized by UNITE HERE, the union for service workers at Yale. Protesters will be asking the New Haven Board of Education to terminate Aramark’s contract because they think the company puts profit before the needs of the students.

Reports
Feasibility of Outsourcing the Management and Operation of the Capitol Power Plant. GAO-08-382R, January 31, 2008
http://www.gao.gov/cgi-bin/getrpt?GAO-08-382R

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