May 13, 2008

Public wary of efforts to lease roads
Naming rights: What’s in a name?
PA: Firm’s ties with Rendell officials questioned
FL: More prison food troubles
CA: EdFund execs seek $3 million in severance
IL: Zell no to state bid for Wrigley
LA: Radio ad targets tuition grant foe
MI: Detroit council members leery of tunnel sale
PA: Deadline extended for turnpike offers
CA: Toll road through state beach gets boost

[click on ‘Continue reading’ link below for articles]

News Summaries
Public wary of efforts to lease roads
An increasing number of international companies are looking to make
multibillion-dollar investments in U.S. roads and bridges. But a
brewing fight in Pennsylvania offers a test of the American public’s
willingness to give up control of vital infrastructure — and
potentially pay higher tolls. Morgan Stanley estimates Pennsylvania
could raise as much as $18 billion by leasing the state’s major highway
system to private investors, who would charge tolls and fund the
system’s upkeep. State officials see a potential source of funds for
their aging roads and bridges. Pennsylvania estimates its immediate
needs total $1.7 billion a year. Proponents of lease deals see them as
a way to meet the U.S.’s growing infrastructure investment needs, which
total $1.6 trillion over the next five years, according to the American
Society of Civil Engineers. The Wall Street Journal (subscription)
Naming rights: What’s in a name?
The proliferation of business and product names has drawn mixed
reactions from fans. Some critics decry the commercialization of local
landmarks while others long for names they grew up with. San Francisco
voters passed an initiative to ensure that historic Candlestick Park
would no longer be called Monster Park when Monster Cable Products
Inc.’s rights expire at the end of the month. But that return to
tradition was an exception to the rule, said David Brooks, a senior
writer at industry journal Venues Today. "We are seeing an environment
now where essentially everything is for sale," Brooks said, noting that
naming rights are the biggest area of revenue growth for arena
operators after luxury seating. Inside arenas there are clubs,
restaurants, bars, hospitality suites — all with the potential to be
named after companies that want to reach free-spending fans. "There is
kind of a sense that naming is a little bit out of control and people
make fun of it," Brooks said. "But I think fans realize it’s here to
stay." San Francisco Chronicle
PA: Firm’s ties with Rendell officials questioned
State contracts with an information technology consultant and an
initiative to equip classrooms with technology are about to go under
the auditor general’s microscope. A Patriot-News analysis of payments
made to Deloitte, an international firm with U.S. headquarters in New
York City, tallied more than $330 million during that four-year span.
That was primarily for information technology services. Some current
and former state employees question how one company got so much of the
state’s technology business and whether it had anything to do with ties
to Deloitte held by four high-level officials in Gov. Ed Rendell’s
administration. The Patriot-News (Harrisburg)
FL: More prison food troubles
Florida’s prison system had already fined its food provider $241,000
this year over staffing and supply issues. And then 277 inmates said
they became sick last month after eating chili. The April 25 incident
at a Panhandle prison has raised the latest question into the
performance of Aramark Corp., which took over prison food service in
2001 as part of former Gov. Jeb Bush’s privatization push. But the
situation has added to ongoing trouble for Aramark, a powerful
Philadelphia company that has been at the forefront of outsourcing
efforts nationwide. The corporation, which provided the food for the
2000 Republican National Convention and is a major GOP campaign
contributor, has faced a wave of bad news recently, including a
statewide probe in Connecticut about poor quality and service in public
schools. St. Petersburg Times
CA: EdFund execs seek $3 million in severance
The executive staff of EdFund, the student loan guarantor the state
plans to sell to a private investor, has crafted its own severance
package worth more than $3 million. The state is trying to sell the
nonprofit public benefit corporation for $500 million, half of what the
governor was hoping to get. The Sacramento Bee
IL: Zell no to state bid for Wrigley
Tribune Co. Chairman Sam Zell has rejected former Gov. James Thompson’s
secret plan to acquire and renovate Wrigley Field for at least $400
million without raising taxes and now plans to package the Cubs and
their landmark stadium in a private transaction, sources said Monday.
Sources said Zell has rejected the state’s proposed terms because it
relies on a novel and untested financing plan: the sale of individual
seats at Wrigley as if they were condominiums. The idea is called
equity seat rights and has been advanced by Chicago area business
executive Lou Weisbach, who has applied for patent rights on it. Chicago Sun-Times
LA: Radio ad targets tuition grant foe
An advocacy group has ratcheted up the debate over Gov. Bobby Jindal’s
proposed private school tuition grant program for New Orleans public
school students with a radio advertising campaign criticizing a leading
opponent of the plan. The target, Rep. Karen Carter Peterson, D-New
Orleans, asked Monday that the sponsoring group, the Louisiana chapter
of All Children Matter, pull the ad. The political action organization
is part of a national group that backs school choice initiatives and
endorsed Peterson for re-election. Peterson blamed the ad on Jindal and
his chief of staff Timmy Teepell, and got some support from other
lawmakers who say the administration is using strong-arm tactics to win
passage of the controversial House Bill 1347 by Rep. Austin Badon,
D-New Orleans. The Times-Picayune (New Orleans)
Detroit council members leery of tunnel sale
City Council members today worried a deal to sell the city’s portion of
the Detroit/Windsor Tunnel would repeat a bad trend of trading city
assets for one-time budget fixes."What are you going to do to balance
the budget next year?" Councilwoman Barbara-Rose Collins said. "Sell
Hart Plaza?" The debate surfaced as administration officials asked
council members to create an entity called the Detroit Tunnel
Authority, which would control the tunnel indefinitely, and approve the
$75 million purchase price. Collins and Council President Pro-Tem
Monica Conyers worried the deal’s short-term benefits would be
outweighed by the act of at least temporarily losing control of the
tunnel. Collins pointed to the Detroit Zoo and Detroit Institute of
Arts as prior examples of privatization. The Detroit News
PA: Deadline extended for turnpike offers
Those groups interested in leasing the Pennsylvania Turnpike have until
Friday to submit "last and final" bids, a spokesman for Gov. Ed Rendell
said Monday. Asked whether he wanted to comment on a Wall Street
Journal report that stated that two groups — one led by Spanish
toll-road operator Abertis Infraestructuras SA, while the second group
includes Spain’s Cintra Concesiones de Infraestructura de Transporte SA
and Australia’s Macquarie Infrastructure Group — had bid to lease the
turnpike, Ardo said, "you have to double-check carefully even the most
reliable sources." Pittsburgh Business Times
CA: Toll road through state beach gets boost
Orange County’s toll road operator said it has cleared the final environmental
hurdle for a proposed 16-mile highway extension through San Onofre State
Beach Park. NBC San Diego

Posted in

May 12, 2008

Toll hikes boost foreign company profits
Pennsylvania gets turnpike offers
Small transit deals part of company’s US growth
FL: $6 million for ‘phantom services’
NJ: State plan aids private schools
IN: Dem faces uphill fight against Daniels
NY: County-run nursing home falls to budget

[click on ‘Continue reading’ link below for articles]
News Summaries
Toll hikes boost foreign company profits
Global toll road giant Cintra announced yesterday that its first
quarter revenue had jumped 15.3 percent thanks in part to toll hikes on
roads in the US, Canada, Chile, Ireland and Spain. Despite collecting
881 million Euros (US $1.4 billion) from drivers last year, the company
failed to make a profit. The company lost 16 million Euros (US $25
million) in the first quarter of this year. During this time, traffic
dipped 8.9 percent on the Chicago Skyway and 6.1 percent on the Indiana
Toll Road. In an earnings statement, Cintra blamed bad weather and the
"betterment" of free alternative routes such as the Dan Ryan Expressway
in Chicago for reducing profit. The weakening dollar also cut into the
Spanish company’s revenue from US motorists. The
Pennsylvania gets turnpike offers
At least two bidding groups submitted undisclosed cash offers late
Friday for the 75-year lease of the Pennsylvania Turnpike, in what
could represent one of the largest deals in the coveted U.S.
infrastructure sector. One of the bidding groups is led by Spanish
toll-road operator Abertis Infraestructuras SA and includes undisclosed
financial partners, a company official said Saturday. A person familiar
with the situation said another binding bid was filed by Spain’s Cintra
Concesiones de Infraestructura de Transporte SA in partnership with
Australia’s Macquarie Infrastructure Group. The units of Grupo
Ferrovial SA and Macquarie Group already have a significant presence in
North America, as they jointly operate toll roads in Indiana, Illinois
and Ontario. The Wall Street Journal (subscription)
Small transit deals part of company’s US growth
Paris-based Veolia’s rapid growth means a large and still-growing part
of America’s urban transit infrastructure is either owned or operated
by a foreign-owned company. So how did they do it without anyone
noticing? By sticking to smaller acquisitions and short-term contracts
— big sexy deals, after all, stir up big sexy controversies. When
Indiana’s turnpike and the Chicago Skyway were turned over to foreign
investors, Australia’s Macquarie Bank Ltd. and Spain’s Cintra
Concesiones, protests came flying — not just over the nationalities of
the investors and the notion that we should have to pay foreign banks
for the privilege of driving over American highways, but also over the
duration of the deals (99 years in the case of the Skyway, 75 years in
Indiana). All the while, Veolia was building a roster of clients and
acquisitions — more than 120 North American locations, moving 500 million
North American transit passengers every year. Pittsburgh Post-Gazette
FL: $6 million for ‘phantom services’
An audit claims Wackenhut Corp. billed Miami-Dade Transit about $6.02
million over three years for work its security officers did not do.
Wackenhut has 90 days to respond to the findings. If it does not,
Auditor Cathy Jackson suggests the county end all contracts with the
company and procure replacement security by hiring new firms, directly
hiring qualified officers or using county correctional staff. The audit
was prompted by a whistleblower lawsuit filed in 2005 that accuses
Wackenhut of billing Miami-Dade for "phantom services" through the
transit system and juvenile center contract to the tune of $3.5 million
to $4.5 million a year, beginning in 2001. South Florida Business Journal
NJ: State plan aids private schools
Depending on which side of the debate you’re on, the Urban Enterprise
Zone Jobs Scholarship Act is either a fabulous idea to help children,
or an evil plot to privatize schools. The bill would allow businesses
to get a 100 percent tax credit for funds they donate to designated
private school scholarship funds. Education groups say the state will
still lose tax revenue, and ultimately those funds would come out of
state aid to schools. New Jersey Education Association president Joyce
Powell was especially piqued that 25 percent of the funds would go to
students already attending private and parochial schools. "Letting
private school students walk away with 90 million of our tax dollars is
bad policy, pure and simple," she said. Press of Atlantic City
IN: Dem faces uphill fight against Daniels
Jill Long Thompson says she knows it will be tough to unseat Republican
Gov. Mitch Daniels in November, and she’s already come out swinging.
Daniels could be vulnerable due to the sluggish economy and some
controversial proposals he’s pushed through, such as statewide daylight
saving time and leasing the Indiana Toll Road to a foreign consortium.
Indianapolis Business Journal

NY: County-run nursing home falls to budget
For Steve Levy, the Suffolk County executive, ridding the county of the
nursing home it owns and which is losing $12 million annually is a
no-brainer: the county is facing a projected budget shortfall next year
of $120 million to $150 million. ”It makes no sense to keep it if the
same type of service can be maintained by private nursing homes at no
cost to the taxpayers,” he said, adding that Suffolk could receive up to
$20 million in financial incentives in the form of state grants if it closed
the 264-bed John J. Foley Skilled Nursing Facility here. But opposition to the
proposal has surfaced among many residents of the nursing home, the union
representing its 400 employees and some members of the Suffolk Legislature.
“It takes the difficult patients,” he said, pointing out that Foley takes not only
elderly patients but also those who have AIDS or who need rehabilitation from
serious injuries. Several county-owned nursing homes have been closed or sold
elsewhere in the state in recent years, including homes in Dutchess, Erie, Montgomery
and Niagara Counties. The New York Times

Posted in

May 9, 2008

MI: Privatizing in city planned
FL: Forget dangerous idea of private TB hospital – editorial
NY: State wasting money on private consultants: union
NY: AG sees fraud in some lawyers’ pensions
AZ: City considers privatized jails
NJ: Teachers’ union oppose school choice bill

[click on ‘continued reading’ for articles]

News Summaries
MI: Privatizing in city planned
Budget planners for Saginaw are proposing more firefighters to reduce
overtime, delaying vehicle purchases and outsourcing the controller’s
office. Staff, City Council members and citizens have about two weeks
to debate the strengths and weaknesses of a $36.3 million plan City
Manager Darnell Earley is proposing. The city would save $150,000 by
outsourcing its controller’s office to certified public accounting and
business advisory firm Plante & Moran, he said. The new deal would
put Plante & Moran in charge of the controller’s office, a division
of Fiscal Services, for three years at $225,000 annually. Four staff
members in the controller’s office would lose their jobs, Earley said.
The Saginaw News

FL: Forget dangerous idea of private TB hospital – editorial
When the state in 2006 first sought information about privatizing
Holley, GEO Care Inc. was the sole responder. The company had no TB
treatment experience and is a subsidiary of a private prison operator
state auditors in 2005 cited for "artificially inflated" raises,
unauthorized, "greatly overstated" overhead costs, and for being one of
two companies paid "about $4.5 million to which they were not entitled"
for vacant staff positions. Efforts to privatize A.G. Holley began under Jeb
"private-is-better-than-public" Bush and appealed to Lantana leaders
who want the state to move A.G. Holley so the town can restore the land
to its tax roll. But the state has not shown that a private company should be
entrusted with curing TB patients and protecting the public from the spread
of the airborne disease in the meantime. Privatizing A.G. Holley would cut
public health in the name of cutting the budget. Palm Beach Post
NY: State wasting money on private consultants: union
The Public Employees Federation said the state is hiring private
consultants when it should be using state workers. Using data from the
state Comptroller’s Office, PEF did a study which said New York State
could save $700 million if it stopped hiring consultants and used state
workers to do the same jobs. Capital News 9 (Albany)
NY: AG sees fraud in some lawyers’ pensions
Hundreds of lawyers across the state have been illegally granted state
pension benefits by school districts, towns and other governmental
entities, according to Attorney General Andrew M. Cuomo, who has opened
an investigation into the abuses. Many of the cases involve politically
connected lawyers who work as independent contractors for regional
school districts but are classified by the regional officials as public
employees, which allows them to earn health benefits or become eligible
for a state pension. In turn, the boards were able to collect more
state financing. The New York Times
AZ: City considers privatized jails
With the cost to put people in county jails on the increase each year,
Peoria is taking a look at the private sector to do the job. Councilman
Dave Pearson said because the fees will likely grow in succeeding
budget years it was time for a creative approach. "What I am
recommending is a hot potato," Pearson said at recent budget talks.
"Let’s look at possible incarceration in private jails. More and more
cities are considering it. "I just know that in a year from now we’ll
see another hefty increase in jail fees." The Arizona Republic
NJ: Teachers’ union oppose school choice bill
A controversial bill that would give poor students in eight New Jersey
municipalities the option to attend a private school or another public
school cleared a legislative hurdle Thursday. The proposal was approved
by the Senate Economic Growth Committee by a 3-to-1 vote, despite
intense opposition from teachers’ unions who said it would have a
devastating impact on public education. Under the bill, private
corporations could donate money to a scholarship fund that would be
appropriated to low-income students in eight pilot municipalities,
including Camden, to give them school choice. In exchange, business
would get a dollar-for-dollar tax credit from the state. But the
state’s largest teachers’ union expressed concern that it could mean
the first step toward privatization of New Jersey’s education system.

Posted in

May 8, 2008

TX: Australian company looks to take over Austin airport
Wrigley it’ll stay
MA: City urged sell assets and outsource
IN: The fight for governor

News Summaries
TX: Australian company looks to take over Austin airport
A deal to privatize Austin Bergstrom-International Airport could yield
a $500 million payoff for the city. The Macquarie Group, an Australian
company, looks to take over operations at ABIA, and some City Council
members are listening closely to the proposal. Speak with anyone close
to the airport, and they’ll tell you that privatization rumors have
been swirling for years. Yet the move raises questions about
accountability, liability and obstacles. KXAN (Austin)
Wrigley it’ll stay
Chicago Cubs fans who love Wrigley Field’s name and historic character
will find their passions protected by the state if it swings a deal to
buy the North Side ballpark from Tribune Co., former Gov. James
Thompson said Wednesday. Asked whether the authority would sell partial
naming rights so that the Wrigley Field name would be linked to another
corporate moniker, he said, "I presume there are people out there who
think so highly of Wrigley Field that they would want to be associated
with it and, therefore, would be willing to pay for that privilege.
"But I have no deals, I haven’t heard of any deals. We would have to
test the marketplace." Chicago Tribune
MA: City urged sell assets and outsource
The Research Bureau has again urged Worcester to unload some of its
properties, including the airport, the DCU Center, Union Station and
the Senior Center, and recommended other cost-saving measures such as
outsourcing custodial services, ending paid police details at
construction sites, further reducing employee health insurance costs,
and limiting police and fire injured-on-duty compensation. The report
called for the city manager and school superintendent to privatize
custodial services for City Hall and the schools, noting there are 171
custodians on the city payroll with an average annual salary of
$40,518, which the bureau contends is about $15,000 more than the
average pay for non-municipal custodians. The report recommends the
city manager consider using the $450,000 franchise fee from Charter
Communications, the city’s cable provider, for municipal services
instead of funding operations of the city’s public access channels.
“The city is not required by state or federal law to provide a public
access channel,” the report states. Worcester Telegram & Gazette
IN: The fight for governor
Democrats’ decision to nominate Jill Long Thompson for governor Tuesday
sets the stage for what promises to be a competitive and intense
campaign against incumbent Mitch Daniels. Privatizing services
traditionally operated by state government is certain to be one of the
main issues in the campaign. Long Thompson will presumably attack
the Indiana Toll Road lease and the contracting out of certain welfare
duties even while Daniels holds them up as prime successes.
Journal Gazette
(Fort Wayne)
Federal Contracting: Congressional Action Needed to AddressLong-standing
Problems with Reporting of Advisory and Assistance Services. GAO-08-319,
March 31, 2008 (37 pages).
Defense Acquisitions: DOD’s Increased Reliance on Service Contractors
Exacerbates Long-standing Challenges. GAO-08-621T, January 23, 2008 (17

Posted in

May 7, 2008

Contractors gone wild
CA: Fed ruling resurrects prospects of toll road
Main Street, not Wall Street, should fix crumbling infrastructure
UT: Provo mayor calls iProvo sale a good deal
Forida proceeding with leasing 78 mile road
Detroit’s water fight
CT: Panel forms to privatize school health clinics
PA: Harrisburg mayor unveils ambitious parking proposal

News Summaries
Contractors gone wild
Theft, hookers, melting down Iraqi gold to make cowboy spurs–all
in a day’s work for private military contractors in Iraq? Mother Jones
CA: Fed ruling resurrects prospects of toll road
A federal review has found a toll road proposed to run through a
popular coastal state park in Orange County would not jeopardize
sensitive wildlife species. Sacramento Bee
Main Street, not Wall Street, should fix crumbling infrastructure
It would be a monumental mistake to turn the future of America’s
infrastructure over to the same crowd that brought us the subprime
crisis, an economy loaded down with debt, and recession. We should
know better by now than to create a scenario where bridges and highways
are sliced and diced like subprime loans into financially engineered
"collateralized infrastructure obligations." America needs a large
source of stable, long-term capital to build the system of buildings,
roads, and power supplies needed to sustain the country. We need a
source of capital that values infrastructure because it provides a
reasonable rate of return, strengthens the overall economy, and doesn’t
burden users with excessive fees. Enter that source of capital: Public
pension funds, which are responsible for the retirement benefits of
more than 18 million Americans, have more than $3 trillion in assets,
and a long-term investment approach consistent with the stable returns
that infrastructure assets generate. — KS Gov Kathleen Sebelius and
SEIU Pres. Andy Stern. The Christian Science Monitor
UT: Provo mayor calls iProvo sale a good deal
The city’s announcement that iProvo — the fiber optic network that has
registered financial losses since its inception — will be sold for
$40.6 million should not be interpreted as cut and run, Mayor Lewis
Billings said Tuesday. News of the city-owned fiber optic network’s
pending sale to Broadweave Networks, a fiber optic service provider
based in South Jordan, comes after numerous calls from a think tank,
the Utah Taxpayers Association and other critics to sell the system.
Several City Council members have also voiced their support of
privatization, but Billings said that didn’t factor into the city’s
decision to sell iProvo. The city has always been open to the private
sector taking over, he said. Deseret Morning News (Salt Lake City)
Forida proceeding with leasing 78 mile road
The Florida Department of Transportation on Monday began seeking
qualifications from firms interested in leasing the 78-mile-long
Alligator Alley toll road that crosses the southern part of the state
from Collier County on the west coast to Broward County on the east
coast. The state road agency expects to enter into a concession
agreement through a public-private partnership to lease the road, which
is part of Interstate 75, in return for an upfront payment and a
portion of excess toll revenues over the life of the concession
agreement, which will be between 50 and 75 years. It is Florida’s first
attempt to lease an existing toll facility, but FDOT officials have
said the move is prompted by the need to find new sources of revenue
for new and back-logged transportation projects. The Bond Buyer
Detroit’s water fight
The truth commission, held at that bastion of liberalism known as
Detroit’s Central United Methodist Church, was convened by area welfare
rights activists outraged by the fact that 45,000 Detroiters had their
water shut off last year. One of the bottom lines emphasized repeatedly
during the event was the increasing likelihood that multinational
corporations will try and buy up and privatize publicly owned water
works. With fresh water supplies expected to dwindle in many parts of
the country as a result of overuse and global warming, water from areas
like the Great Lakes region is expected to become ever more valuable.
"Water will be more valuable than gold," was a phrase uttered more than
once. Detroit, with the world’s largest water plant, could be
particularly vulnerable to this sort of attempted takeover, warned John
Riehl, president of American Federation of State, County and Municipal
Employees Local 207, which has more than 900 members and represents
workers at Detroit’s Department of Water & Sewerage. Metro Times (Detroit)
CT: Panel forms to privatize school health clinics
Bridgeport Mayor Bill Finch, excoriated in recent days over his
proposed budget that would deeply cut the school health clinics, said
Tuesday the clinics could remain open if they were privatized. ConnPost
PA: Harrisburg mayor unveils ambitious parking proposal
Harrisburg Mayor Stephen R. Reed this afternoon revealed a plan to
lease 11 Harrisburg Parking Authority garages, its parking lots and
approximately 900 metered parking spaces in the city to a private
company, which would pay the authority a one-time up front sum of $215
million. Central Penn Business Journal

Posted in

May 6, 2008

Lawsuits raise questions about private prisons
Death by detention – NYT editorial
U.S. seeks contractors to train Iraqi military
States get in on calls for gas tax holiday
DOT secretary: Allow private dollars for roads
Corporations ignore equal, fair treatment – opinion
SF accused of trying to privatize golf courses
NY: Old ruling adds to pension dispute
IL: Third try at leasing lottery

News Summaries
Lawsuits raise questions about private prisons
As immigration laws have become tougher, the federal government has
found itself with a logistical challenge: where to house a population
that has swollen to more than 30,000 detainees. The solution? Turn them
over to the private sector. Detention contracts have helped turn
once-ailing private prison companies into a multibillion-dollar growth
industry with record revenues, healthy stock prices and ambitious
expansion plans. One of them, Corrections Corporation of America, or
CCA, has applied to build a nearly 3,000-bed prison in Otay Mesa, where
it now runs a facility holding up to 700 detainees awaiting deportation
or decisions on their immigration cases. The company is the nation’s
largest private prison operator. In the past year, ICE and its
contractors have come under fire for alleged mistreatment of
immigrants. In San Diego last year, the American Civil Liberties Union
twice sued the agency and CCA. Union-Tribune (San Diego)
Death by detention – NYT editorial
A chilling article by Nina Bernstein in The Times on Monday recounted the
secrecy, neglect and lack of oversight that are a few of the shameful symptoms
of the booming sector of the nation’s prison industry — the detention of
undocumented foreigners. In the case of Mr. Bah, records were marked
”proprietary information — not for distribution” by the Corrections Corporation
of America, a private company that runs the Elizabeth Detention Center
and many others under contract with the federal government. The government
urgently needs to bring the detention system up to basic standards of decency
and fairness. That means lifting the veil on detention centers — particularly the
private jails and the state prisons and county jails that take detainees under
federal contracts — and holding them to the same enforceable standards that
apply to prisons. The New York Times
U.S. seeks contractors to train Iraqi military
U.S. commanders in Iraq are for the first time seeking private contractors
to form part of the small military teams that train and live with Iraqi military
units across the country, according to a notice for prospective bidders
published last week. Washington Post
States get in on calls for gas tax holiday
Economic studies have shown that high gas prices disproportionately
affect lower-middle-class Americans. And these appear to be the voters
politicians are trying to appeal to. All of these plans come as other
states resist letting go of gas tax revenue, which typically finances
road construction and maintenance. Minnesota’s Legislature, after the
deadly bridge collapse in Minneapolis last August, enacted a law this
year raising its gas tax by 5.5 cents per gallon, to be phased in
through October. And Georgia, which briefly shelved its gas tax after
Hurricane Katrina, has no plans for a sequel. Instead, Gov. Sonny
Perdue, a Republican, has pushed to expand state bus service and is
relying on new tax incentives for telecommuting that give people “the
option not to buy gas,” said Bert Brantley, his spokesman. The New York Times
DOT secretary: Allow private dollars for roads
Plans to expand and improve I-94 through Jackson County, Michigan are
expensive and overdue. To help solve that, U.S. Secretary of
Transportation Mary Peters visited Jackson on Monday to encourage the
state to allow the use of private dollars, and she promised to expedite
reviews of I-94 plans by her department. Peters said there is more
than $400 billion in private funds available worldwide for public
transportation projects. Department of Transportation spokesman Brian
Turmail said the $400 billion figure is an estimate from several
analysts and economists on the availability of private funding from
companies and banks that have dedicated infrastructure capital funds.
The state Legislature would have to approve the use of private funds
for state road projects. Jackson Citizen Patriot
Corporations ignore equal, fair treatment – opinion
Privatization is used frequently to describe the shifting of government
managership to private managership. Privatization seemed, theoretically, like
a good practice to and for many people. Conservative criticism, primarily and
often heard, has made government a bad word in many circles. How often
have we heard the statement, “Get government off our backs!” Sounds great
until the day your interest is equal treatment for people involved. The Daily Telegram
(Superior, Wisc)
SF accused of trying to privatize golf courses
Desperate to improve San Francisco’s aging and perpetually underfunded
golf courses, city officials are quietly soliciting information from
private companies interested in operating three of the city’s public
courses. But members of a new task force charged with pondering the
fate of golf in San Francisco are accusing officials of surreptitiously
moving forward with privatization attempts, a controversial proposal in
a city that is normally wary of handing over control of public assets
to private companies. "I think it’s a bum rush to do what the
department has been trying to do all along, which is privatize golf
courses," said Isabel Wade, a parks activist and a task force member
who has advocated closing some of the courses and using the land for
other recreational activities. "We need to have a thoughtful public
discussion about the allocation and disposition of 400 acres of public
park land." The San Francisco Chronicle
NY: Old ruling adds to pension dispute
With private lawyers under state scrutiny for getting themselves listed
as public employees in order to get into New York’s pension system, a
2004 court case has come to light that clearly stated the practice was
not allowed. Times Union (Albany)
IL: Third try at leasing lottery
After two failed attempts to privatize the Illinois Lottery, Gov. Rod Blagojevich
is taking another stab at it with a revamped plan aimed at pumping billions
of dollars into construction projects. Journal-Register (Springfield)

Posted in

May 5, 2008

Competitive sourcing drops in 2007
Senate panel curbs private security firms
States look to rein in private medicare plans
Color by commute leaves an ugly pattern
San Diego city jobs outlined for outsourcing
FL: Jail health contract meets resistance

News Summaries
Competitive sourcing drops in 2007
The number of federal employees or the full-time equivalents of
employees who competed in 2007 decreased from 2006 by more than
a third, to 10,317 from 16,369, according to an annual report
on competitive sourcing released today. Clay Johnson, the Office of
Management and Budget’s deputy director for management, said the
decrease is due in large par, to legislative actions that block or
otherwise deny funding for competitions.
Senate panel curbs private security firms
A Senate panel is seeking to rein in private security firms in Iraq and
Afghanistan by prohibiting them from conducting military detainee
interrogations and operations in combat areas. The Senate Armed
Services panel included language in the 2009 defense authorization bill
this week extending Pentagon regulations on private security firms to
the Department of State. The Hill
States look to rein in private medicare plans
State officials say they will soon ask Congress for more power to
regulate the marketing of private Medicare insurance plans to older
Americans because they are still receiving complaints of high-pressure
sales tactics that have led some beneficiaries to sign up for unsuitable
policies. Medicare pays private plans 13 percent more, on average, than
it would spend for the same beneficiaries in the traditional Medicare program.
The report says insurers often encourage agents to sell these products by
paying larger commissions and bonuses than agents would receive for
selling other health insurance products. The New York Times
Color by commute leaves an ugly pattern
"For most people in America it’s not a choice" between toll lanes and
the free lanes, said Rep. Pete DeFazio (D-Oregon), who has tried to
derail tolling programs. "You have to be at work at a certain time.
Many people have to live pretty distant from their work because of the
economics of housing prices. For many of those people, there is no
transit alternative." In DeFazio’s view, the Bush administration is
starving mass transit funding and instead moving to privatize roads,
which benefits firms in the tolling business It is also worth noting
that U.S. Transportation Secretary Mary Peters — whose agency is
pushing congestion pricing — previously worked for a major engineering
firm, HDR, based in Omaha. Los Angeles Times
Cities could sell naming rights for disaster relief
And before you start complaining about the coarsening of society, how
we’ve sold out every last thing that is sacred in America, including
"God Bless America" at Tides games; before you start whining that
corporate interests have replaced near-historic icons, spare me. We’ve
sold out long before this. Virginian Pilot

San Diego city jobs outlined for outsourcing
Trash collection and street sweeping are among the first San Diego city
services targeted for outsourcing, Mayor Jerry Sanders announced
Friday. San Diego Union Tribune
FL: Jail health contract meets resistance
The county jail is not physically equipped to deal with the ever-increasing
number of inmates with mental illnesses and changes are needed, Volusia
County Manager Jim Dineen and County Corrections Director Marilyn Chandler
Ford said Friday. But Dineen said making improvements is "not a quick fix."
He’s leaning toward a recommendation that the County Council extend for a
year its jail health care contract with Prison Health Services. Prison Health Services
faces lawsuits locally and nationally by inmates claiming they didn’t receive proper
medications and treatment. The current psychiatrist, Dr. David Hager, is leaving
this month to take a job out of state. News-Journalonline (Daytona Beach)

Posted in

May 2, 2008

Common assets on the road to privatization – analysis
CA: Committee shoots down P3 bill
$1 billion each year didn’t help readers
TX: Gov. commitment to tolls shows with picks
Wisconsin governor’s troubled efficiency plan falls short
IL: Privatizations a ‘guarantee’ of infrastructure investment
MI: Custodial privatization talks tabled
Federal contracting chief quits under fire
Increasing reliance on private contractors in Iraq questioned

News Summaries
Common assets on the road to privatization – analysis
Why some politicians are so eager to sell off the construction and
maintenance of our public roads. As never before, state governments are
plunging ahead with new experiments in privatizing public roadways. The
deals offer investors huge profits from the large toll increases they
will charge on highways they control. But for the tax-paying public and
drivers, it’s a bad bargain. Over the long term, the public will not
receive the full value of the higher tolls that drivers pay. Private
operators will manage major highways in ways that maximize tolls and
minimize their costs rather than to serve the public interest. Many
cash-strapped state politicians are eager to avoid responsibility for
constructing or maintaining roads lest they be forced to raise taxes
and tolls themselves. But a look at the economics and governance of
road privatization sends a flashing warning of danger ahead.

CA: Committee shoots down P3 bill
California lawmakers killed Gov. Arnold Schwarzenegger’s public-private
partnership bill in a party-line committee vote this week. The bill
would have allowed arrangements in which a private partner could have
assumed responsibility for delivering, improving, operating, or
maintaining governmental facilities, including but not limited to
roads. It failed Tuesday on a 5-to-3 vote in the Assembly Business and
Professions Committee. The three "yes" votes came from Schwarzenegger’s
fellow minority Republicans. The five votes to kill the bill came from
majority Democrats. "In general, supporters of public-private
partnerships assert that California is not likely to meet the
infrastructure needs of a growing population without leveraging private
sector capital," the report said. "Opponents assert that public-private
partnerships increase costs to taxpayers because a profit margin is
built into a fee structure that already includes higher borrowing costs
than what is available to public agencies," it said.
The Bond Buyer
$1 billion each year didn’t help readers
President Bush’s $1 billion a year initiative to teach reading to
low-income children has not helped improve their reading comprehension,
according to a Department of Education report released on Thursday. The
program, known as Reading First, drew on some of Mr. Bush’s educational
experiences as Texas governor, and at his insistence Congress included
it in the federal No Child Left Behind legislation that passed by
bipartisan majorities in 2001. It has been a subject of dispute almost
ever since, however, with the Bush administration and some state
officials characterizing the program as beneficial for young students,
and Congressional Democrats and federal investigators criticizing
conflict of interest among its top advisers. Senator Edward M. Kennedy,
the Massachusetts Democrat who is chairman of the education committee,
and who has long criticized the program, said, ”The Bush
administration has put cronyism first and the reading skills of our
children last, and this report shows the disturbing consequences.” In
2006, John Higgins, the department’s inspector general, reported that
federal officials and private contractors with ties to publishers had
advised educators in several states to buy reading materials for the
Reading First program from those publishers. The Reading First
director, Chris Doherty, resigned in 2006, days before the release of
Mr. Higgins’s report, which disclosed a number of e-mail messages in
which Mr. Doherty referred to contractors or educators who favored
alternative curriculums seen as competitors to the Reading First
approach as ”dirtbags” who he said were ”trying to crash our
party.” International Herald Tribune
TX: Gov. commitment to tolls shows with picks
A week after Gov. Rick Perry said in a speech that he’ll fight to keep
toll roads at the center of any plans to solve Texas’ transportation
needs, he proved it by naming his former chief of staff to lead the
Texas Transportation Commission. Mr. Perry also reached inside the
board room of the North Texas Tollway Authority Wednesday, selecting
that agency’s vice chairman to also serve on the five-member
commission, which sets policy for the nearly 15,000-employee Texas
Department of Transportation. The new chairman is Mr. Perry’s former
aide, Deirdre Delisi, 35 of Austin. Ms. Delisi replaces Hope Andrade of
San Antonio, who had been serving as interim chairman. The appointment
of NTTA vice chairman William Meadows, a Fort Worth businessman, fills
the vacancy left open by the December death of commission chairman Ric
Williamson. Mr. Williamson was an old friend of Mr. Perry’s whose
outsized personality had helped push TxDOT’s pro-toll road policies
through several sessions of the Legislature, until they ran into a road
block last session. Dallas Morning News
Wisconsin governor’s troubled efficiency plan falls short
The headline-grabbing claim from Gov. Jim Doyle in March 2005 couldn’t
have been clearer. At a news conference, Doyle said his administration
would save taxpayers up to $200 million over four years through better
management of the state bureaucracy under the so-called ACE Initiative.
The state would negotiate new contracts to buy goods and services for
less money. It would sell off surplus property. And it would
consolidate a number of other functions across state government to find
savings. But three years later, a review shows the goals outlined by
the governor have not been met. His administration quietly killed the
initiative last year after faulty projections, unexpected problems and
bureaucratic resistance hampered the effort. Jill Malak, a spokeswoman
for AFT-Wisconsin, a state employees union, said her union warned the
program wouldn’t work from the beginning because it relied too heavily
on private contractors. "We haven’t seen any positive, quantifiable
results from the ACE initiative," she said. "And we have seen
corruption and the mismanagement of funds to a staggering level. It’s
either gross incompetence or something a little bit more insidious." Business Week
IL: Privatizations a ‘guarantee’ of infrastructure investment
Chicago Mayor Richard Daley said yesterday the proposed privatization
of Midway International Airport, the city’s recycling centers, and its
parking meter system would "guarantee" the continued investment in
neighborhood infrastructure and relieve pressure on city taxpayers.
"That will mean even more police and fire stations, libraries, parks,
and senior centers – all essential to neighborhood stability and
safety," Daley said in his annual state of the city address yesterday.
Six teams are interested in bidding for the right to operate Midway
under a long-term lease in exchange for an up-front cash payment, a
transaction that could raise several billion dollars and would mark the
first privatization of a major U.S. airport. An estimated 50-year lease
could fetch around $3 billion. The proposed parking meter system
privatization could raise more than $1 billion. The city launched the
national wave of government interest in entering into long-term leases
on existing assets with its $1.8 billion, 99-year lease of the Chicago
Skyway toll bridge in early 2005. The Bond Buyer (subscription)
MMI: Custodial privatization talks tabled
Talks of privatizing Pinckney Community Schools’ Buildings and Grounds
Department — including its 27 custodians — were tabled Thursday after
the department’s union made headway at the bargaining table the day
before. The board was prepared to authorize negotiations with Aramark
to privatize the department, but tabled the issue at Thursday’s regular
meeting in order to continue hammering out a deal to keep the employees
district employees. District officials have said as much as $430,000
could be saved through privatization. Under a private contract, the
district would only pay for the service, and save benefit, retirement
and other costs custodians receive as district employees. In recent
weeks, Lepkowski said privatization would further reduce the employees
to "poverty-level" income. Daily Press & Argus
Federal contracting chief quits under fire
The head of the U.S. government’s top contracting agency has resigned
amid accusations of misuse of authority, including allegations that she
tried to enlist agency officials to help Republican political hopefuls.
Lurita Doan is leaving the top spot at the General Services
Administration after a controversial tenure.Doan’s resignation comes 10
months after the government’s the Office of Special Counsel recommended
to the White House that she be disciplined to the "fullest extent" for
violating federal laws against using government employees for political
purposes, a finding she denied. The agency’s inspector general
criticized Doan for signing off on a $20,000 no-bid contract with a
friend’s public relations agency and accused her of "a disregard for
the rules" in managing the $17 billion agency. CNN
Increasing reliance on private contractors in Iraq questioned
Over the past few days, Chattanooga Police Department Officer Ricky
Ballard has been waking up early and going to bed late, hoping to soak
up as much of the city as he can — because after he leaves next week
for Iraq, he’ll treasure the atmosphere here more than ever. But
Officer Ballard is not being deployed to the war zone with the U.S.
military. The 12-year department veteran is choosing to halt a
promising career in local law enforcement to join the ranks of a
private security firm contracted to work for the federal government. It
is a popular job even during the fifth year of the Iraq war, and the
government has become more reliant than ever on the support these
contracted firms provide, said Charlie Cray, director of the
Washington, D.C.-based Center for Corporate Policy and co-founder of
Halliburton Watch. Though no one knows exactly how many private
contractors are working in Iraq, the total is estimated to be well over
100,000, said Mr. Cray, who believes the number of contractors now
outnumbers the total number of troops overseas. As of this week, there
were about 159,000 troops in Iraq and another 34,000 in Afghanistan,
according to the Department of Defense. Though reliance on contractors
is touted as a cost-saving measure, the strategy has been debated
recently within the U.S. Government Accountability Office, Mr. Cray
said. "We’ve had private contractors before," he said, noting that
their use has been documented at least as far back as World War II.
"However, the … use of contractors has ballooned to an extent that’s
unprecedented." Chattanooga Times Free Press (Tennessee)

Posted in

May 1, 2008

CA: See the world, let special interests pay, governor urges
CT: City schools give Aramark the boot
NJ: School board undos private janitors deal
IL: No taxes in deal to buy, rehab Wrigley?
NJ: NJN conversion plan gets static from legislators
FL: Voucher angst imperils FCAT bill
FL: Alligator alley lease draws investors attention
PA: Port Authority mulling naming rights sale
LA: Tuition plan squeaks by panel
PA: Pike lease draws no bids

News Summaries
CA: See the world, let special interests pay, governor urges
Gov. Arnold Schwarzenegger on Wednesday encouraged lawmakers —
especially those from small towns — to do more globe-trotting on the
dime of special interests. The governor suggested lawmakers would be
more willing to embrace his plans to privatize the building of roads,
schools, high-speed rail systems and other public works if they could
see how effectively it has worked in other countries. "Some of them
come from those little towns, you know what I am saying, they come from
those little towns and they don’t have that vision yet of an airport or
of a highway that maybe has 10 lanes or of putting a highway on top of
a highway," Schwarzenegger said. "They look at you and say,
‘We don’t have that in my town. What are you talking about?’ "So
they are kind of shocked when you say certain things. So I like them to
travel around." Such travel is typically paid for by a combination
of special interests with business before the Legislature and foreign
governments. It usually involves stays at luxury resorts, high-end dining
and the option of bringing a spouse along. Los Angeles Times
CT: City schools give Aramark the boot
In an unexpected turn of events, the New Haven Board of Education
unanimously voted Monday to bring control of school kitchens in-house,
effectively booting Aramark Corp. July 1 from city school cafeterias.
“It’s time for us to get back to work and do what’s right for our kids
and our school system,” said school Chief Operating Officer Will Clark.
Facing mounting union discontent, Superintendent of Schools Reginald
Mayo announced earlier this year the district would rebid food service
and facilities management contracts, both held by Aramark Corp. of
Philadelphia. “This is terrific, from the perspective of the workers,
the parents and, most of all, the children,” said Steve Mathews,
Connecticut Director for Local 217 of Unite Here. However, “it’s only
part of what we need to happen. … (Aramark) shouldn’t be cooking the
food, and they shouldn’t be managing the buildings. We hope the city
will complete the job they surprisingly started tonight,” he said.
New Haven Register

NJ: School board undos private janitors deal
The Cherry Hill school board has unanimously approved an administrative
recommendation to staff custodial jobs with district workers rather
than with a contractor’s employees. The district will return privatized
positions — including building cleaners and six out of 19 head custodian
positions — to district bargaining units when the $3.1 million contract
with Philadelphia-based Aramark expires on June 30. The move to undo
the privatization represents the latest chapter in a decade of actions
that irked many residents. The district privatized custodial services in
a cost-cutting move in 1998. At first, some of the new workers tested
positive for drugs, and one custodian confessed to stealing electronic
equipment. Parents complained that the schools were not clean and
that the workers could not speak English. The original contractor, Control
Building Services, was replaced in 2000. Courier-Post (South Jersey)
IL: No taxes in deal to buy, rehab Wrigley?
Former Gov. Jim Thompson said Tuesday he has found a way to have the
state buy and renovate Wrigley Field — a remodeling cost of "at least
$400 million" — with "no taxes of any kind." Thompson hesitated
when asked if his new plan would rely on the controversial sale of naming
rights to the 94-year-old shrine of Major League Baseball. Tribune CEO
Sam Zell’s plan to sell naming rights to Wrigley to generate as much as
$400 million over 20 years has met with stiff resistance from baseball
purists and die-hard Cub fans. "I would say yes. But we would look for
a naming rights deal that does not displace Wrigley Field.” Chicago Sun Times
NJ: NJN conversion plan gets static from legislators
Lawmakers gave a cool reception to NJN’s (New Jersey Public Television
and Radio) plan to sever ties with the state by transferring its licenses
to a private nonprofit corporation. "I am disturbed, dismayed and
very surprised to hear that the effort to privatize NJN is in place,"
Sen. Shirley Turner (D-Mercer) said during a budget committee hearing
yesterday in Trenton. Star-Ledger Staff (Newark)
FL: Voucher angst imperils FCAT bill
Senate Republicans have a take-it-or-leave-it deal for the lawmakers
who want to change the much-maligned FCAT exam: Give us more public
money for private schools. The Florida Senate on Wednesday put together
a mammoth education bill that would finally change the way the Florida
Comprehensive Assessment Test is used, but that same legislation would
also expand a controversial private school voucher program by $30
million. The move drew protest from several Democrats, as well as the
state’s teacher union, which say it’s wrong to spend more money on
vouchers during the same year that Florida’s sagging tax collections
has led lawmakers to cut money for public schools. ”Brick by brick, we
are dismantling public education,” said Sen. Frederica Wilson, a Miami
Democrat. Miami Herald
FL: Alligator alley lease draws investors attention
In what is perhaps a sign of the economic downturn and a slowdown in
public-private partnerships in other states, numerous domestic and
international firms have shown interest in leasing a 78-mile-long toll
road in South Florida called Alligator Alley. Nearly 170 people
attended a forum last week on the monetization proposal by the Florida
Department of Transportation, many representing companies expected to
bid on the public-private partnership concession. Alligator Alley would
be the first existing toll road in Florida to be leased, although the
state has other P3s in the pipeline. The Bond Buyer (subscription)
PA: Port Authority mulling naming rights sale
The Port Authority of Allegheny County is considering selling naming
rights to a 1.2-mile light-rail extension under the Allegheny River as
well as to other transit stations and assets it controls. Marketing
consultants and public relations firms have until May 22 to present
proposals to the authority board. York Daily Record
LA: Tuition plan squeaks by panel
Gov. Bobby Jindal’s administration weathered a bruising committee
debate Wednesday before claiming a narrow victory for a proposed $10
million grant program that would send as many as 1,500 New Orleans
public school pupils to private and parochial institutions. The debate
featured familiar themes, with Badon, Jindal’s policy team and other
supporters casting the plan as a way to give more choices to the
parents of low-income children in poor schools. Opponents decried the
bill as a back-door "voucher" program that would siphon students and
money out of public schools. The Times-Picayune (New Orleans)
PA: Pike lease draws no bids
Gov. Ed Rendell didn’t receive any bids for leasing the Pennsylvania
Turnpike by his self-imposed deadline of Wednesday, but observers say
there is interest from private companies in the multibillion-dollar
deal. Morgan Stanley has estimated a 75-year turnpike lease could bring
in $12 billion to $18 billion. Pittsburgh Tribune-Review

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