Author Archives: Info Center

Maplewood Manor purchased by Zenith Care Health

Source: Lindsay Nielsen ∙ NEWS10 ∙ January 30, 2015

The future of Maplewood Manor Nursing Home has been made clear after it was purchased by Zenith Care Health Group. Zenith Care Health Group bought the facility on Sunday for $14.1 million. …. Around 300 employees have been sent layoff notices to remove them from the county payroll.
Related:
Saratoga County unloading nursing home
Source: Dennis Yusko, Times Union, January 30, 2015

Saratoga County will transfer Maplewood Manor operations to a private company Sunday, ending years of debate and negotiations, but not concerns for the Saratoga County nursing home’s workforce and residents. The county’s Maplewood Manor Local Development Corp. voted Thursday to sell the nursing home to the Zenith Health Care Group. The parties will close on a $14.1 million deal at 7 a.m. Sunday. Zenith will rename the Ballston Avenue facility the Saratoga Center for Rehabilitation and Skilled Nursing Care. The company’s newly formed entity, Saratoga Center for Care LLC, is licensed to operate 257 beds, down from the current 277. The deal will save taxpayers millions of dollars a year in operating costs, said Spencer Hellwig III, COO of the local development corporation (LDC). He said the county could no longer afford to subsidize several million dollars a year in loses at Maplewood Manor. …

CSEA rejects purchase of Maplewood Manor
Source: Danielle Sanzone, Saratogian, January 17, 2015

The purchase of Maplewood Manor is now “up in the air” following a vote on by CSEA union members who defeated a proposed agreement. Only about half of the eligible CSEA members voted on the agreement, which was voted down 47-19, CSEA spokesman Steve Maderas said….

Pay cuts proposed at Saratoga County nursing home
Source: Paul Post, digitalfirstmedia.com, December 30, 2014

The state Health Department has approved Zenith Health Care Group’s application to take over the Saratoga County-run Maplewood Manor nursing home. A closing date is expected by the end of January, pending contract negotiations between the Long Island-based company and CSEA, Maplewood’s employee union, Zenith spokesman Aaron Lichtman said.

Pay cuts proposed at Saratoga County nursing home
Source: Kenneth C. Crowe II, Times Union, December 5, 2014

The company planning to purchase Saratoga County’s Maplewood Manor has proposed laying off 97 workers and cutting salaries and benefits to save $5.8 million, according to bargaining documents. A copy of the tables detailing the economic proposal made by Zenith Healthcare to the CSEA unit at Maplewood Manor shows pay cuts ranging from a proposed 11 percent to 48 percent in eight job titles. The economic package initially proposed would save $4,000,933 in salary and benefits, according to the tables. An additional $1,819,693 would be saved through layoffs. ….

Potential Maplewood buyer defends stance
Source: Charlie Kraebel, Saratogian, December 5, 2014

Zenith Healthcare, the potential buyer of the Saratoga County-owned Maplewood Manor, issued a statement Friday saying it wants to hire employees at “competitive rates to other private facilities.” On Wednesday, Zenith officials met with Maplewood employees and provided them with a proposal that included 97 position cuts from the more than 400-person staff and salary reductions that could be as high as 50 percent, according to a document obtained by The Saratogian…. On Wednesday, Zenith proposed to cut 28 full- and part-time nurses and 60 full- and part-time nursing aides – along with four food service workers, four part-time dietary aides and one dietary clerk – from Maplewood’s more than 400 employees. Zenith expects to save more than $1.8 million by eliminating these positions. Officials said the document was likely the first offer in the company’s negotiations with the Maplewood union, although the county is not a part of those talks. …

Maplewood Manor Nursing Home Buyer Proposes Steep Cuts
Source: Matt Hunter, TWC, December 5, 2014

Nearly one year has passed since the Saratoga County Board of Supervisors reached a deal to privatize the county run Maplewood Manor Nursing Home. As Matt Hunter reports, while that will ultimately lead to millions in savings to the county, the facility’s soon-to-be owner is proposing large cuts to its staff…. The proposed cuts, 97 in all, amount to $1,819,693. Along with another $4,000,933 in wage and benefits reductions, the cost cutting measures were outlined by Zenith executives during a Wednesday meeting with Maplewood staff and CSEA union reps….

Employees leave, county scrambles /Jobs, beds, state OK at issue in $14M deal to privatize nursing home
Source: Dennis Yusko, Times Union, August 28, 2014

Saratoga County officials are scrambling to reopen a wing of the county’s Maplewood Manor nursing home as supervisors anxiously await a state decision on whether they can sell the facility to a private health care company. As the state Health Department reviews the $14.1 million sale, the county is having difficulty staffing the nursing home because nervous public employees are retiring, resigning to start other jobs, transferring to other county departments or taking an unusual amount of sick time, according to county officials. The exodus has been so disruptive that the typically thrifty county Board of Supervisors passed a resolution last week authorizing bonuses for workers who remain in their jobs, refer new hires and don’t call in sick. …

Maplewood Manor employees unhappy over union, county negotiations
Source: Caitlin Morris, The Saratogian, May 5, 2014

During a meeting at the Hyatt Place late Monday afternoon, Maplewood Manor employees expressed discontent, and at times outrage, over the result of impact negotiations between their union, CSEA, and their employer, Saratoga County. The county government is in the midst of finalizing the sale of the county-owned nursing home Maplewood Manor to Zenith Care Health Group due to its financial drain on the county. Meanwhile, nursing home employees are trying to figure out the status of their jobs, or even when the facility will be ready to be transferred formally to the new company….

Protecting your Future: Planning key in nursing home privatization era
Source: Bonnie Kraham, recordonline, January 23, 2014

A common theme in recent years regarding long-term care in New York is the shuttering of county-owned public nursing homes.

Historically, counties built long-term care facilities to provide specialized care for seniors, with operation and ownership in the hands of local policymakers. With current financial pressures mounting, the government-run approach is quickly changing.

Saratoga County’s woes
Last year, a New York State Comptroller’s audit of Saratoga County showed the severe economic impact of a county-run nursing home, Maplewood Manor. The entire county budget was in trouble because of the cost of subsidizing the home. …

Deal made for Saratoga County nursing home
Source: Dennis Yusko, Times Union, Saratoga Seen blog, December 16, 2013

Saratoga County leaders agreed Monday to sell the public Maplewood Manor nursing home to a private health care company for $14.1 million. Board members of the Maplewood Manor Local Development Corporation (LDC) selected Zenith Care Health Group to purchase its 237-bed nursing home, which has lost several million dollars annually since 2004 due to declining Medicaid reimbursements from the state. If the deal is approved by the state Health Department, Zenith would purchase Maplewood Manor and invest $2.5 million to improve it, LDC board members said Monday. …

County Eyes Potential Buyers for Maplewood Manor
Source: Saratoga Today Newspaper, October 4, 2013

The seven-member Maplewood Manor Local Development Corporation (LDC), which was formed early this year with the goal to transfer ownership of the Saratoga County-funded nursing home, has narrowed the list of potential buyers to five. No names were released publicly at this time. Each potential buyer has pledged to pay at least $11 million for the 277-bed facility…

Judge dismisses CSEA challenge to nursing home sale
Source: Stephen Williams, Daily Gazette, Around Saratoga blog, July 16, 2013

A state Supreme Court judge has dismissed the Civil Service Employees’ Association’s effort to block Saratoga County from selling its Maplewood Manor nursing home in Ballston Spa. Judge Robert J. Chauvin ruled July 9 that CSEA Local 1000, which represents county employees, and three individual members who helped bring the suit lack the standing to sue over the county’s privatization plan…The parties have shown no direct injury, Chauvin wrote in denying them standing, and also haven’t raised the kinds of issues that would get him to overrule a legislative body….

CSEA sues to block sale of Maplewood Manor to private company
Source: Caitlin Morris, Saratogian, March 27, 2013

The union that represents most employees of county-owned nursing home Maplewood Manor is suing the county in an attempt to block the sale of the nursing home to a private company. In January, the county transferred Maplewood Manor into the hands of a local development corporation in order to sell the home to a private-sector operator. The Civil Service Employees Association, one of the largest public-sector unions in the state, filed the case in state Supreme Court March 20 and it has been assigned to Judge Robert Chauvin. In court documents, the union argues that local governments cannot sell public property that still serves a “necessary public purpose.” The suit also contends county taxpayers could be left holding the bag if the LDC issues bonds or loans and dissolves before the debt is repaid.

CSEA sues Saratoga County over nursing home transfer
Source: Dennis Yusko, Times Union, March 26, 2013

Union sues to stop nursing home plan
Source: Stephen Williams, Daily Gazette, Around Saratoga blog, March 26, 2013

Maplewood plan challenged by CSEA
Source: Stephen Williams, Daily Gazette, March 25, 2013
(subscription required)

Saratoga County supervisors hear discontent; expected to decide this week whether to privatize Maplewood Manor nursing home
Source: Caitlin Morris, Saratogian, January 13, 2013

…The people who spoke during the public comment period were vehemently opposed to the privatization of the county-owned facility…. Citing examples of privatized nursing homes that have failed in Dutchess and Delaware counties and another with documented violations in Fulton County, Tyler said Saratoga County officials could seek to improve the nursing home model rather than follow those examples. …

Vote puts Saratoga County’s nursing home, Maplewood Manor, on path to privatization
Source: Caitlin Morris, Saratogian, November 21, 2012

A landmark vote by the Saratoga County Board of Supervisors Tuesday approved the creation of a Local Development Corporation to manage the sale of the county-owned nursing home, Maplewood Manor…Declining Medicare reimbursements and rising operational costs have led public assets like nursing homes to be frequent targets for privatization in recent years….

Nursing home on road to privatization
Source: Dennis Yusko, Times Union, November 20, 2012

Corruption, bribery rampant in government contracting, key witness in case says

Source: Jim McElhatton, Washington Times, December 14, 2014

Even before he competed for his first government job, the key witness in the largest bribery case in federal contracting history said an associate warned him that he’d have to “pay to play,” according to a recent jailhouse letter. Alex Cho said he began work as a contractor because he thought doing business with the U.S. government would be an honest way to make a living — a notion he quickly abandoned. …. The ringleader, Army Corps program manager Kerry Khan, extracted millions of dollars in kickbacks from corrupt contractors for years. But Cho said Khan also made other “absurd demands.” “As I told agents, he asked me on numerous occasions to drive 45 minutes, including at night, from my home in Ashburn to his [home in] Alexandria … to unclog his toilet, fix his A/C and even to replace his light bulbs.”…
Related:
Another contractor admits to bribery charges
Source: Nick Wakeman, Washington Technology, April 12, 2013

The body count surrounding the Nova Datacom-Army Corps of Engineers bribery and kickback scandal continues to grow, reaching 15 guilty pleas on Thursday. This time it is Min Jung Cho, the president of the now defunct company, who admitted to her role in a conspiracy that saw nearly $30 million in bribes and kickbacks paid. The contracts in question were for work in Iraq. The count is likely to grow as the U.S. Attorney for Washington, D.C., said that the investigation continues. Other Army contracts might be involved, the Washington Post reported.

How a contracting official scammed more than $30M
Source: Jim McElhatton, Federal Times, April 1, 2013

…In all, Khan and his associates had illegally pocketed more than $30 million in kickbacks and bribes over almost five years. When authorities finally arrested Khan in October 2011, he had been planning an even bigger scheme to steer a nearly $1 billion federal contract….But even as he received the prestigious Legion of Merit award in summer 2009, Alexander already had been working with Khan to steer Army Corps contracts to favored contractors in exchange for kickbacks, including to one company where Alexander hoped to get a job….

…In March, prosecutors filed bribery charges against a company called Nova DataCom and its president, Min Jung Cho. Both are expected to plead guilty, according to papers filed in U.S. District Court in Washington….Other contractors — some real, others little more than front organizations — were involved, too, according to court records. Harold Babb, former director of contracts for Eyak Technology, has received more than seven years in prison for his dealings with Nova DataCom and Khan….

….The kickback scheme involved a big Army Corps contract known as TIGER, for Technology for Infrastructure, Geospatial and Environmental Requirements. Until their arrests in fall 2011, Khan and others planned to steer another nearly $1 billion contract known as CORES, for Contingency Operations Readiness Engineering and Support, prosecutors said….

…But despite recent developments in the case, none of the newly filed documents shed light on one big unanswered question: How could such a scam have grown so big, so fast, without anyone noticing? Machen declined to comment on specifics but said all contract fraud cases expose a lack of internal controls, and the Khan case is no different….

Virginia Businessman Pleads Guilty to Bribery and Other Charges In Contracting Scheme Involving U.S. Army
Source: United States Attorney’s Office for the District of Columbia, Press release, September 26, 2012

Guilty Plea In Government Contracting Fraud Case
Source: Associated Press, January 25, 2012

Four Accused Of ‘Brazen’ Federal Contracting Corruption Scheme
Source: Mark Memmott, NPR, Two-Way blog, October 5, 2011

Four men were arrested Tuesday for their alleged roles in what the U.S. attorney for the District of Columbia, Ronald Machen, alleges was “one of the most brazen corruption schemes in the history of federal contracting.”

The Washington Post’s Crime Scene blog writes that:

“Charged in the District’s federal court with conspiracy, bribery and unlawful kickback were two Army Corps contracting officers, Kerry F. Khan of Alexandria, and Michael A. Alexander of Woodbridge. “Facing the same charges are Khan’s son, Lee, of Fairfax County, and Harold F. Babb, of Sterling, director of contracts for EyakTek, an Alaska Native Corporation with an office in Dulles, Va.”

As The Wall Street Journal adds, the men are accused of taking part “in a scheme to steer a $780 million government contract to a Virginia-based company in return for millions of dollars in kickbacks, the Justice Department said.”…

CSEA president rips Neuhaus over Valley View

Source: Chris McKenna, Record Online, December 6, 2014
(scroll down)

The president of the union representing Orange County’s Valley View Center for Nursing Care and Rehabiliation has fired back at County Executive Steve Neuhaus for continuing his campaign to privatize the 360-bed home and what she described as his “race to the bottom” in wages for nursing-home employees. Sabina Shapiro, president of the county’s Civil Service Employees Association units, was responding to remarks Neuhaus made last Monday in his message to county lawmakers about their changes to his 2015 budget plan, some of which he vetoed. Folded into that letter were sharp jabs at legislators who blocked his second attempt to sell Valley View last month and at the CSEA, which he accused of fighting to preserve higher wages at the county home in comparison to private-sector peers.
Related:
Public rises to Valley View’s defense /Speakers blast county for ignoring the people’s will
Source: Edie Johnson, Photo News, October 3, 2014

The public once again gave full-throated support to keeping Valley View nursing home under county ownership. In the second hearing on the subject so far this year, all but three speakers favored holding on to Valley View. Several at the Sept. 29 hearing urged legislators to spend a day as caretaker at the nursing home to better understand the special kind of devotion it takes to do that kind of work. Others challenged the legitimacy of the hearing itself, saying that since the resolution to transfer the facility to a local development corporation (LDC) had been pulled from this week’s legislative agenda, there could be no legal public hearing but only an “informational session.”…

Residents blast proposal to privatize Valley View Center for Nursing Care and Rehabilitation
Source: News 12, September 29, 2014

Hundreds of people attended a public hearing in Goshen Monday about whether the county should get rid of a health care facility in order to save taxpayers money. Members of the legislature proposed privatizing the county-owned Valley View Center for Nursing Care and Rehabilitation. Some Orange County residents took the microphone and blasted the idea. … But, workers and patients are fearful about what the move could mean for their future. County legislators have scheduled a vote in November to decide whether or not to privatize Valley View. Opponents of it say they plan to fight it every step of the way. …

Second suit filed to halt Valley View sale /Union seeks to invalidate April vote
Source: Chris McKenna, Times Herald-Record, June 25, 2014

A second lawsuit has been filed to stop Orange County’s latest effort to privatize its nursing home, which already has been successfully challenged in court but appears to be moving forward in spite of the ruling. The new case by the Civil Service Employees Association seeks again to invalidate the Legislature’s April 9 vote to transfer the Valley View Center for Nursing Care and Rehabilitation to a local development corporation, which was created to sell the home….But the 22-page petition adds further objections. The union’s attorneys contend, for instance, that the county couldn’t transfer the 360-bed nursing home to Orange Valley View Development Corp. without the state commissioner of health’s approval, under the state Public Health Law….

Neuhaus to Appeal Judge’s Rule on Valley View Transfer
Source: Jessica Chen, Time Warner Cable News, June 17, 2014

News of the ruling by state Supreme Court Justice, Elaine Slobod, came down Tuesday. Slobod decided the legislature’s 12-9 vote in April to transfer the nursing home to a Local Development Corporation, also known as LDC, was invalid….President of the CSEA, Danny Donohue, who represents workers at Valley View released a statement, praising the ruling, “the transfer of public nursing facilities to the control of a LDC, which have no accountability to the public, represents an abandonment of responsibility by public officials.”…

Orange County seeks to have challenge to Valley View LDC dismissed
Source: MidHudsonNews.com, May 13, 2014

Attorneys for Orange County Government filed papers on Monday asking State Supreme Court to dismiss an Article 78 proceeding filed against the county for its creation of a local development corporation to determine the future of the county’s Valley View nursing home. The suit was filed by a number of county CSEA employees, including those who work at the nursing home….

Lawyer makes good on promise, files lawsuit against Orange County over Valley View vote
Source: Midhudsonnews.com, April 17, 2014

Saying the issue of removing the Valley View nursing home out of county hands is “more than a legal issue; it’s a moral issue,” attorney Michael Sussman Wednesday filed an Article 78 proceeding against the county for its creation of a local development corporation to dispose of the facility. Representing several individuals in the suit, including county employees, Sussman challenged the county legislature’s majority vote to create an LDC. He maintains under state law, a super-majority of two-thirds of the members, is needed for such a move if drafted as a resolution. A simple majority vote last week approved the transfer.

Sussman promises lawsuit over Valley View
Source: Midhudsonnews.com, April 10, 2014

Civil rights attorney Michael Sussman was one of many who spoke in opposition to creating an LDC to oversee the future of the county nursing home. He who blasted the elected officials saying they supported one position before election last fall and then changed once in office. Sussman threatened to sue the legislature if the LDC was approved …. One CSEA officer, Annie Beth Moran, urged lawmakers to table the decision to allow negotiations to continue with givebacks by the union to save the county money.

Orange lawmakers take step toward sale of county nursing home
Source: Daily Freeman, April 10, 2014

Orange County legislators voted 12-9 Wednesday night to create a local development corporation to address the future of the Valley View nursing home. The vote came after much debate and public comment with nursing home residents and CSEA union members, who work there, opposing the move. The LDC model is styled after the method by which Ulster County sold its Golden Hill nursing home last year….

Union offers wage freeze to help save Valley View
Source: Chris McKenna, Times Herald-Record, April 8, 2014

The union representing about 1,950 Orange County employees has offered to forego raises for three years to try to stave off the possible privatization of the county-owned Valley View Center for Nursing Care and Rehabilitation. Sabina Shapiro, president of two Orange County units of the Civil Service Employees Association, made the offer public during a marathon hearing Friday, telling county legislators and a large crowd in Goshen the union had proposed a six-year deal with no retroactive raises for 2012, 2013 and 2014.

Donnery says Neuhaus wears ‘many masks’ – Speaks out against his Valley View plan
Source: Gittel Evangelist, Times Herald-Record, October 30, 2013

Like a wolf in sheep’s clothing, Orange County executive candidate Roxanne Donnery said, her opponent’s idea to spin off the county’s nursing home to a separate agency betrays his true intention to privatize it. Donnery and her supporters in the CSEA — the union that represents the nursing home’s workers — held a news conference Tuesday evening to speak out against Republican Steve Neuhaus’ interest in transferring control of Valley View Center for Nursing Care and Rehabilitation to a local development corporation. …While true that Benton and Berardinelli have maintained support for selling the nursing home, both voted along with the legislative majority last week to fund Valley View for a full year. … Moreover, say Donnery and the labor leaders who support her, Ulster County transferred its nursing home, Golden Hill, to an LDC for precisely the purpose of selling it; the same thing happened in Rockland County. Donnery points out that Neuhaus received a $1,000 campaign donation from Harris Beach, the law firm that formed the LDCs that took over both those counties’ nursing homes. …

Union balks at latest contract proposal Negotiations called for Valley View concessions
Source: Chris Mckenna, Times Herald-Record, June 20, 2013

In a pair of surprising twists, Orange County officials have resumed contract talks with the union representing more than 2,000 county workers, but hit a snag after quickly reaching what they and the union’s president thought was a promising deal. Negotiations had dissolved in acrimony in April, with County Executive Ed Diana declaring an impasse and complaining the Civil Service Employees Association had made costly, unrealistic demands. ….. With talks now in mediation, county officials contacted the union last week and hammered out a proposal so swiftly that Diana shared the terms with county lawmakers in a closed-door meeting on Monday, and the union president, William Oliphant, presented them to his 11-member negotiating committee on Tuesday.

Diana believes Valley View bailout will cost another $20 million
Source: Mid-Hudson News Network, April 15, 2013

As the fate of the Orange County-owned Valley View nursing home remains in limbo, the county legislature believes it will take about $45 million to cover the operating expenses of the Goshen facility through the end of the year. That will be covered by taxation, Medicare and Medicaid and private pay residents, said County Executive Edward Diana, who believes the cost, through the end of the year, will be closer to $60 million. … Diana maintains his position that the county should sell the nursing home, but has met resistance from county legislators and the CSEA, which represents the employees at the facility.

Down to the wire on fate of Valley View
Source: Mid-Hudson News Network, December 10, 2012

Leadership of the union representing the Orange County employees at the Valley View nursing home on Monday said they are upset with the way last minute negotiations are going with the county as the fate of the facility hangs in the balance. County Executive Edward Diana’s 2012 budget provides funding for the nursing home for one month after which it would have to be sold or closed. The county legislature will convene on Wednesday to pass final judgment on the spending plan.

Orange County legislature votes to keep Valley View open
Source: Elaina Athans, YNN, November 14, 2012

Orange County’s legislators voted to keep Valley View Nursing Home open another year. They amend a proposed budget that originally called for the facility’s closure. … CSEA represents the majority of the workforces and the union president’s says he will make concessions to keep operational costs low…. Also, the same day the legislature voted to keep Valley View open, Diana contacted the other union that oversees the management end of Valley View. He notified them services were no longer needed in the new year.

Valley View committee in final stretch of its investigatory hearings
Source: Mid-Hudson News Network, August 9, 2012

The committee of lawmakers looking into the financial picture of the Orange County-owned Valley View nursing home is in its final week of hearings before it begins to compile a final report to submit to the full legislature. Chairwoman Roxanne Donnery and the committee interviewed two CSEA directors during Wednesday’s session, Robert Compani and Steven Alviene, on the privatization trend of nursing homes in the state. They spoke on the recent sale of the Fulton County Residential Health Care Facility, which was purchased by Centers for Specialty Care in April, one of the top candidates in line for Valley View. The company has also purchased once county-owned nursing homes in Essex and Washington counties.

According to the union heads, the results were less than ideal in Fulton.On the day of the purchase, the nursing home went from 210 employees to 170. Many left for other jobs, or because they had no knowledge of what their contract would look like under a new employer. While retained employees’ salaries did not change, new hires were brought in at a reduced salary; LPNs went from $16.25 per hour to $14, and certified nursing assistants from over $10 to $9.50, said Compani….

Union official rips Valley View bidder / Takeover sees staff exodus, rise in cost of health care
Source: Chris Mckenna, Times Herald-Record, August 9, 2012

Nursing home report hardens positions / Diana warns of layoffs, tax hikes
Source: Chris Mckenna, Times Herald-Record, August 2, 2012

Valley View’s true costs hard to pin down / Hearings off to a rocky start
Source: Chris Mckenna, Times Herald-Record, July 22, 2012

Witnesses blast OAS management
Source: Edie Johnson, Chronicle, July 13, 2012

Louisiana needs smarter approach to managing state employee health care benefits: Editorial

Source: Times-Picayune ∙ November 12, 2014

Louisiana’s Office of Group Benefits, which provides health care coverage to 230,000 state employees, retirees and teachers, had $500 million in reserves in 2011. It’s on pace now, by some estimates, to have only $6 million by the end of this fiscal year. … Unlike private employers that have increased employee co-pays and deductibles, the state has been slow to adjust benefits to deal with current financial realities. The state will still have to take some of those measures, PAR points out, and there will almost certainly be some pain involved for individual policyholders.
Related:
Health benefit changes planned for Louisiana state workers
Source: Associated Press, August 26, 2014

Louisiana’s state government employees and retirees face increased out-of-pocket costs, higher deductibles and new health service limitations as Gov. Bobby Jindal’s administration reworks state insurance plans to keep the program from financial disaster. Financial analysts say those in the insurance program in many instances will be paying more and getting less. Critics of the changes say workers and retirees are being held responsible for the Jindal administration’s mismanagement of their program…. The Office of Group Benefits provides health care coverage for more than 230,000 public employees, retired workers and their dependents. Blue Cross and Blue Shield of Louisiana manages the health care plans that cover most of them. In recent months, the insurance program has been hemorrhaging cash, at one point spending $16 million more each month than its revenue collections. A 5 percent premium hike took effect earlier this year to help stabilize the program, along with some benefit reductions….


Changes to state worker health benefits prompts lawmaker to ask Louisiana House to return to Baton Rouge

Source: Julia O’Donoghue, Times-Picayune, August 26, 2014

… Louisiana’s Legislative Fiscal Office predicts that 230,000 state workers, retirees and their dependents will be paying an average of 47 percent more out of pocket for their health care benefits starting in January. The plans offered to state workers also won’t cover as many procedures and as much treatment as they do currently….

Letter: What happened to trust fund?
Source: James David Cain – Former state senator, DailyComet.com, June 18, 2014

…Now on the state level a similar situation has happened to our 250,000 families with state group benefits by this administration in Baton Rouge. This group of state workers and retirees paid premiums to build up a $500 million health care trust fund….After privatization of the Office of Group Benefits, health benefits are being cut, premiums are being raised, and the $500 million trust fund has been raided. They gave a 1.5 percent pay increase to retirees that starts in July and the same month a 5 percent rate increase on premiums….

Outsourcing not always answer
Source: Jim Beam, American Press, June 15, 2014

The Gov. Bobby Jindal administration and Blue Cross-Blue Shield are putting a classic spin job on upcoming changes in the way 230,000 state workers, retirees and their families are going to receive health care. What those insured people are really going to get are higher premiums or higher deductibles and more restrictions on medical procedures they might need. Blue Cross-Blue Shield took over complete administration of the Office of Group Benefits on Jan. 1, 2013. It is another one of Jindal’s privatization plans. The company inherited reserves that in 2011 totaled $500 million, but that is expected to be down to $55 million by the end of the year. The money was used to pay medical claims. The Jindal administration raised health care premiums twice in 2011, which the OGB board said wasn’t necessary because of the reserve funds. Critics called it an effort to make privatization look more attractive to potential buyers, which was being considered at the time. Then, the administration surprisingly cut premiums by 7 percent on July 1, 2012. That move was considered an effort to make privatization more acceptable to those 230,000 people served by OGB. The administration eventually decided to hire someone to manage OGB, and Blue Cross-Blue Shield got the job at the beginning of last year. Just over 17 months later, that reserve fund is almost gone. Meanwhile, the governor paid a company $5 million to find ways for the state to save money. The company came up with $2.7 billion in suggested savings, and $1 billion (nearly one-third) of that is supposed to come from changes in OGB health care benefits.

Letter: Group Benefits raided after privatization
Source: James David Cain, Advocate, June 10, 2014

…. In June 2011, the Jindal administration started talking about privatizing the Office of Group Benefits. The state auditor said at that time the privatization could cause higher insurance premiums. The Jindal administration announced in July 2012 that Blue Cross and Blue Shield was chosen to run the Office of Group Benefits at the whopping cost of $37.8 million per year! ….. After privatization of the Office of Group Benefits, health benefits are being cut, premiums are being raised and the $500 million trust fund has been raided. They gave a 1.5 percent pay increase to retirees that starts in July, and the same month a 5 percent rate increase on insurance premiums, at a loss of 3.5 percent for the year. This Jindal administration should be held accountable as to where the $500 million trust fund went.

Jindal’s office insists state health care program is solvent
Source: Marsha Shuler, Advocate, May 24, 2014

In response to fears voiced earlier this week by several Louisiana legislators, the Jindal administration’s top money manager insists the state’s health insurance program won’t go broke. Commissioner of Administration Kristy Nichols said a planned increase in premiums, a new employee wellness program and benefit changes will help stabilize Office of Group Benefits finances by year’s end. The plan pays for the health needs of about 250,000 state employees and retirees as well as their dependents. … Legislators have grown increasingly concerned about Group Benefits finances as costs keep eating into more and more of its reserves. Many of the complaints have arisen since the Jindal administration privatized the management of a program that largely was run by state government employees. The Legislature’s fiscal advisors say a reserve fund, which stood at more than $500 million a little more than two years ago when privatization began, could drop to $55 million based on current spending and revenues. A cut in the premiums is responsible for some of the decline of reserves…

Vote shelved on Jindal health outsourcing plan
Source: Melinda Deslatte, Associated Press, November 8, 2012

Gov. Bobby Jindal’s top budget adviser scrapped a legislative vote Thursday on the governor’s proposal to outsource a state employee health insurance plan, when it became clear the contract didn’t have enough support to win approval.

La. AG: Privatization plan requires legislative OK
Source: Jessica M. Karmasek, Legal Newsline, September 17, 2012

Louisiana Attorney General James “Buddy” Caldwell says any contract to privatize the state’s Office of Group Benefits must be approved by state lawmakers.

Attorney general: OGB privatization takes legislative OK
Source: Mike Hasten, Advertiser, September 14, 2012

State to seek bids on health overseer
Source: Michelle Millhollon, Advocate, April 02, 2012

Official says Jindal’s plan to privatize will cut costs
Source: Michelle Millhollon, Advocate, April 05, 2012

OGB Board wants explanation for privatization
Source: Mike Hasten, thenewsstar.com, August 18, 2011

Louisiana Governor to Choose Adviser on Health Insurance Privatization
Source: Associated Press, July 11, 2011

Three firms are vying to advise the Louisiana Gov. Bobby Jindal’s administration on efforts to privatize a state worker health insurance program. Michael DiResto, a spokesman for the governor’s Division of Administration, said the firms are Barclays Capital, Goldman Sachs and Morgan Keegan. The division is seeking a financial adviser to determine the market value of the Office of Group Benefits’ book of business, before the administration looks for a private company to manage one of the agency’s insurance plans….

Payments increase after garbage bill added to utilities

Source: Michael D. Bates, Hernando Today, August 16, 2014

To streamline payment collections, Hernando County commissioners in October voted to add people’s garbage collection bills to their water and sewer statements. The combined billing effort is helping the county’s garbage hauler, Republic Services, which had complained it wasn’t receiving payments from enough people. County figures show the company only had an 80 percent success rate. … Republic Services has seen a 16.7 percent hike in collection rates, resulting in a $480,500 annual increase in company revenue. Also, because Republic Services no longer bills its customers, the cost of things such as printing, postage and customer service work related to handling billing inquiries and processing payments are taken out of the company’s normal operations and realized as added savings. …
Related:
Residents trash talk Republic
Source: Michael D. Bates, Hernando Today, August 5, 2013

Recurring complaints of missed trash pick-ups and clogged customer communication lines forced county commissioners to chastise Republic Services Inc. a year ago. And just when it was believed that conditions had improved, the same problems have resurfaced, at least according to County Commissioner Jim Adkins. Adkins said he is fielding scores of calls from customers complaining of missed pick-ups and lengthy phone delays. He said there is no reason for such a large company to have recurring problems and will seek answers.

County asks trash hauler to improve service
Source: Michael D. Bates, Hernando Today, May 22, 2012

Recurring complaints of missed trash pick-ups and clogged customer communication lines forced county commissioners to ask for a face-to-face with Republic Services Inc. representatives at Tuesday’s board meeting. What they got from Republic were assurances that they would strive to do a better job of customer relations. It’s been about six months since Republic took over the countywide garbage hauling contract and complaints, which had leveled off briefly, began surfacing again when the company recently stopped picking up the waste bins at the curb from delinquent paying customers….

Commissioners to discuss tweaking the mandatory collection area in Spring Hill and add 1,250 homes
Source: Michael D. Bates, Hernando Today, April 21, 2013

About 1,250 homes would be added to Spring Hill’s mandatory garbage collection area under a new plan going before county commissioners Tuesday. Residents can weigh in during a public hearing on a proposed resolution that would modify the boundaries for the mandatory (or universal) Spring Hill solid waste collection area. The expansion became an issue because of increasing numbers of Spring Hill subdivisions left outside the mandatory collection zone since it was created two years ago. There was confusion on the part of homeowners and Republic Services because that zone often went right through a subdivision, which meant some neighbors were part of mandatory collection and others were not. Republic Services complained because it did not have the mailing lists to inform haulers who was or was not in the zone….

Garbage complaints still piling up in Hernando County
Source: Barbara Behrendt, Tampa Bay Times, January 6, 2012

The fourth day of new garbage service for Hernando County residents dawned Thursday, and still some people had not seen the first sign of a Republic Services garbage truck in their neighborhoods.

Florida child-welfare agencies battling high staff turnover — 80 percent in some parts of state

Source: Margie Menzel, News Service of Florida, September 8, 2014

One of the worst problems facing Florida’s troubled child-welfare system, advocates say, is job turnover among the case managers who oversee adoption and foster-care services — 80 percent in some parts of the state. It’s costing Florida tens of millions of dollars a year, and those are just the costs that can be quantified. … Rosenberg said caseworker turnover is directly related to how long a child stays in foster care; the more workers on a case, the longer a child is likely to spend in the state system. Now, with turnover among caseworkers averaging 37 percent per year statewide, the privatized agencies responsible for adoption and foster care are turning to market research to keep their best employees…. Gold conducted a series of studies for the Florida Coalition for Children, which represents the privatized community-based care lead agencies, and for subcontractors like the Children’s Home Society and Devereaux. Both hire caseworkers to find places for children to live after they’ve been removed from their homes by the Department of Children and Families…. Low pay and high caseloads were frequently cited by Gold’s interviewees as reasons for a lack of job satisfaction. …
Related:
Probe: Contractor unintentionally misspent $400K
Source: Kelli Kennedy, Associated Press, May 19, 2011

A Miami foster-care provider contracting with the Department of Children and Families unintentionally misspent more than $400,000 in state funds, according to a state investigation released this week. But the contractor takes issue with the findings. The inspector general’s investigation found no intentional fraudulent misuse by Our Kids, a DCF contractor that receives about $74 million a year to care for 3,500 children. But the investigation illustrates a broader problem of vague contracts between the department and its private contractors, including policies on awarding subcontracts and bonuses.

Pa. Lottery outsourcing critics say Illinois’ failed privatization could have played out here

Source: Jan Murphy, pennlive.com, August 25, 2014

After three years of revenues falling short of expectation, Illinois is parting ways with the private management firm it hired in 2010 to run its state lottery. The news of Illinois’ decision to divorce Northstar Lottery Group announced on Friday struck a chord with a Pennsylvania labor union official and others who had been critical of a similar pursuit by Gov. Tom Corbett to hand over the reins of the Pennsylvania Lottery to a private management firm. Corbett abandoned that privatization pursuit, at least for the time being, when he announced at the end of 2013 that he was allowing a bid from United Kingdom-based Camelot Global Services to expire after extending it eight times over the course of a year. That decision came after Attorney General Kathleen Kane raised constitutional and legal objections about the proposed contract with Camelot….
Related:
Editorial – Bet on politics: The new lottery director has scant expertise
Source: Pittsburgh Post-Gazette, January 15, 2014

When the Corbett administration was promoting its now-abandoned idea of privatizing the Pennsylvania Lottery, it was on the basis of not only bringing private enterprise know-how to its operations but also special expertise in gambling. As explained a year ago by Revenue Secretary Dan Meuser, in an email to lottery workers informing that a British firm, Camelot Global Services, would soon be signing a contract: “We’re confident that by combining one of the nation’s best lotteries with one of the best private-sector lottery industry experts in the world, we’ll end up with a win-win proposition to grow and protect lottery profits … .” Now it’s on to other things, such as filling the vacant position for the lottery’s new executive director. On Monday, Silvan B. Lutkewitte III, 50, of Hershey took up the position, replacing Todd Rucci, who left in November for another job. In picking Mr. Lutkewitte to head the lottery instead of conducting a national search, did the administration put the same premium on gambling expertise as it did in its privatization efforts? …

Corbett feeling lucky about lottery privatization
Source: Mary Wilson, WITF, January 6, 2014

The Corbett administration let a private firm’s bid to manage the Pennsylvania Lottery expire at the end of December, but that doesn’t mean the governor feels down on his luck about privatizing the enterprise eventually. State senators last month began considering legislation that would allow the governor’s plans to advance. A measure under discussion would pave the way for an expansion of lottery games and outsourcing the lottery’s management to a private company.

Lottery workers union ‘pleased’ with end to privatization effort
Source: Robert J. Vickers, pennlive.com, December 30, 2013

State lottery workers breathed a sigh of relief Monday after Gov. Tom Corbett appeared to give up on a two-year effort to privatize the management of the Pennsylvania Lottery. “Right now we’re just pleased they’re keeping everything in-house,” said David Fillman, executive director of AFSCME Council 13, the union that represents about 170 employees of the state lottery. Earlier in the day, Corbett issued a news release indicating that he would not pursue a ninth extension on the lottery management bid from UK-based Camelot Global Services.Although he said he would allow the lottery to run as-is, and a state aging official said the move wouldn’t immediately harm commonwealth seniors, another administration official said future privatization efforts could be on the cards….

Related:
Pa. lottery manager effort has clear path
Source: Karen Langley, Post-Gazette, December 4, 2013

A tentative agreement between the Corbett administration and a union representing state workers appears to have breathed new life into the governor’s effort to hire a private manager for the Pennsylvania Lottery. A 20-year management agreement with Camelot Global Services, which operates the United Kingdom’s lottery, has been stalled since February, when Attorney General Kathleen Kane announced that attorneys conducting a routine review of contracts had concluded the deal would violate state law. …

AFSCME warming up to outsourcing of Pennsylvania Lottery’s management
Source: Jan Murphy, pennlive.com, December 4, 2013

The most vocal critic of Gov. Tom Corbett’s proposed privatization of the Pennsylvania Lottery’s management may be backing off its opposition. …

Privatizing Pa. Lottery doesn’t add up
Source: Mercury, November 1, 2013

From the outset, Gov. Tom Corbett’s proposed privatization of the state lottery was ill-fated. And for good reason: It was a bad idea. It’s bad public policy. It’s bad for state taxpayers. It’s bad for the senior citizens who depend on lottery funds to pay for transportation, meals, prescription drugs and property tax and rent rebates. But now we learn the governor’s quixotic quest — guided by ideology more than practicality — hasn’t been bad for everyone. Consultants have hit the jackpot. …

Auditor General Eugene DePasquale calls on Corbett to stop spending on lottery privatization consultants
Source: Jan Murphy, pennlive.com, October 29, 2013

State Treasurer Rob McCord may have reluctantly decided to pay the more than $3.4 million in bills associated with Gov. Tom Corbett’s exploration of privatizating the Pennsylvania Lottery’s management, but that is not going to stop state Auditor General Eugene DePasquale from giving them another once over. In a news release issued Tuesday, DePasquale said he directed his staff to immediately begin to review and scrutinize this diversion of use of Lottery Fund dollars from funding senior programs to paying for consultants. …

Auditor General DePasquale Will Scrutinize Payments of Lottery Funds Diverted to Firms Associated with Stalled Privatization Effort
Source: Commonwealth of Pennsylvania, Department of the Auditor General, News Release, October 29, 2013

Auditor General Eugene DePasquale today released the following statement on the commonwealth’s diversion of more than $3.4 million to firms associated with the Corbett Administration’s effort to privatize the Pennsylvania Lottery: “I directed Department of Auditor General staff to immediately begin to review and scrutinize the Corbett Administration’s diversion of more than $3.4 million in Lottery funds to firms associated with a still-pending contract with the British-owned Camelot Global Services Inc. to privatize the Pennsylvania Lottery management. “Funds from the Pennsylvania Lottery are supposed to help older Pennsylvanians with prescriptions, transportation, home-delivered meals and property tax and rent rebates, not to fatten the coffers of law firms and private consultants over a Lottery privatization contract that may never see the light of day…

2 State Senators Want Corbett to End Lottery Privatization Bid
Source: Kevin Gavin, WESA, October 7, 2013

Two Democratic state senators want Gov. Tom Corbett to pull the plug on his efforts to privatize Pennsylvania’s Lottery and turn his attention to what they say are more pressing issues including transportation funding, Medicaid expansion and education funding.

UK-based Camelot Global Services’ original bid to operate Pennsylvania’s Lottery was to expire at the end of 2012, but the Corbett administration and the company agreed on an extension of the offer. A contract was then finalized Jan. 16 which called for Camelot to give the state $34.6 billion over 20 years. In exchange Camelot would be allowed to increase the gaming options including Keno.

However, 30 days later state Attorney General Kathleen Kane rejected the contract Thursday on the grounds it violates the state constitution and state law. Since then the administration and Camelot have been agreeing to extensions to give the administration more time to “refine contract language.”

The latest extension, the 10th, is set to expire Oct. 29. Sen. Tim Solobay (D-Washington) says there is no public demand for privatization…

Pa. Lottery should not follow Illinois path, lottery outsourcing opponents say
Source: Jan Murphy, pennlive.com, July 23, 2013

…An official from the labor union representing Pennsylvania Lottery employees and Democratic lawmakers have taken notice of how the situation is unfolding in Illinois. They suggest that should serve as yet another reason why Corbett should halt his pursuit of hiring United Kingdom-based Camelot Global Services to manage the Pennsylvania Lottery. In its bid, Camelot committed to generating $34.6 billion in profits over the next 20 years that would be used exclusively to fund the senior citizens’ programs. The Corbett administration estimates that is $3 billion to $4.5 billion more than the lottery would produce by keeping its management in-house. Camelot’s bid is currently set to expire on July 31….

Pa. Lottery privatization costs don’t cut profits, Revenue spokeswoman says
Source: Jan Murphy, pennlive.com, July 19, 2013

The record profits that the Pennsylvania Lottery earned last year do not include the more than $3.5 million that Gov. Tom Corbett’s administration has spent or expects to spend on its exploration of tapping a private company the lottery. A spokeswoman for the Department of Revenue said, however, it would be wrong to assume that had those costs not been incurred, it would have driven up last year’s profits even higher. The lottery reported a record $1.067 billion in profits…. The lottery’s annual report for the period covering July 1, 2012 to June 30 shows the lottery hit an all-time ticket sales record of $3.48 billion, which is 6.3 percent more than the prior year’s record-setting performance….

Lottery privatization pursuit continues despite approaching record-breaking profits
Source: Jan Murphy, pennlive.com, May 20, 2013

Despite a trajectory that shows Pennsylvania Lottery profits on course to break the past year’s record-breaking performance, Gov. Tom Corbett’s administration has not abandoned its effort to privatize the lottery’s management. Administration officials have been working with consultants and lawyers to revise the contract that Attorney General Kathleen Kane rejected in February, because she determined it was unconstitutional….

PA Lottery privatization deal questioned by third state agency
Source: Associated Press, April 15, 2013

A third state agency is pointing to potential legal problems in Governor Corbett’s stalled plan to hire a British company to manage the $3.5 billion Pennsylvania Lottery. The chief counsel of the Pennsylvania Gaming Control Board wrote in a letter last month that the proposed contract is too ambiguous to tell what kinds of new gambling it would allow. As a result, the lawyer, Douglas Sherman, says it’s impossible to say whether it infringes on state casino gambling laws.

Corbett’s lottery privatization tab for consultants nears $3 million
Source: Jan Murphy, pennlive.com, April 2, 2013

Senior citizens may stand to pay a substantial cost in lost services if Gov. Tom Corbett’s effort to privatize the Pennsylvania Lottery’s management goes nowhere. Already, the costs of the consultants hired to assist the Corbett administration in that endeavor exceed $2.85 million, said Elizabeth Brassell, a spokeswoman for the Department of Revenue, which oversees the lottery. Unless another funding source is found, that money will come out of the lottery profits that are used to pay for senior programs, she said.

To understand the impact that would have if it came out of the lottery fund, information available from the state indicates that $2.85 million is enough to:
– Assist seniors in paying for 137,681 prescriptions through the PACE and PACENET programs,
– Pay for 1.1 million free transit rides for seniors,
– Provide 6,055 rebates through the state’s property tax and rent rebate programs, or
– Cover 576 months of nursing home care, the equivalent of paying the tab for 48 people to stay in a nursing home for a year….

Pennsylvania lottery deal being revised to address attorney general’s concerns
Source: Karen Langley, Pittsburgh Post-Gazette, March 16, 2013

…With an appeal to the courts due today, the governor’s office announced late Friday it would revise the contract “in order to provide clarification to the attorney general.” The attorney general had raised three objections to the contract: that it infringes on the Legislature’s power to make policy; that state lottery law does not allow monitor-based games, like keno; and that it included too broad a provision for Camelot to make claims against the state. The administration does not plan to remove keno or other components of the contract, but rather to demonstrate that the agreement is lawful….

Treasurer Rob McCord favors expanding lottery before looking to privatize its management
Source: Jan Murphy, pennlive.com, February 20, 2013

…At a Senate budget hearing, McCord suggested the administration would have done better had it had an open conversation with the Legislature about expanding the lottery to include terminal-based games such as keno at the same time it was looking at the idea of privatizing the lottery’s management….

Attorney General Kathleen Kane says Gov. Tom Corbett overstepped his constitutional authority in signing the lottery contract
Source: Jan Murphy, pennlive.com, February 14, 2013

Attorney General Kathleen Kane says Gov. Tom Corbett overstepped his authority in signing a contract with Camelot Global Services PA, LLC to take over management of the Pennsylvania Lottery. But that wasn’t the only reason she rejected it. She cited the state lottery act, the gaming act and other applicable case law as reasons why the contract didn’t meet her test for form and legality….

Toohil backs Kane on lottery contract block
Source: Kent Jackson, citizensvoice.com, February 19, 2013

AFSCME Urges Gov. Corbett To Negotiate With PA Employees On Lottery Proposal
Source: AFSCME Council 13, February 19, 2013

Costa, Blake to Gov: Let Lottery Implement AFSCME Approach to Raise Profit
Source: State Sen. John Blake, Press Release, February 11, 2013

State Sens. Jay Costa (D-Allegheny) and John Blake (D- Lackawanna/Luzerne/Monroe) said that instead of outsourcing the Pennsylvania Lottery’s operations to a U.K. company, Camelot Global Services, the governor should allow the Lottery to implement AFSCME’s recommendations to raise new revenue….

Poll: Voters say don’t privatize lottery management
Source: Borys Krawczeniuk, Scranton Times Tribune, February 7, 2013

Pennsylvania voters overwhelmingly think privatizing management of the state lottery is a bad idea, with some saying they’ll no longer play if that happens, according to a new Franklin & Marshall poll released Wednesday…Fewer than one in five voters (18 percent) said they either strongly or somewhat favor Gov. Tom Corbett’s plan to hand off management of the lottery to a private company. Almost two-thirds (64 percent) either somewhat or strongly oppose privatization….

AFSCME adds new arguments in its lottery privatization lawsuit
Source: Jan Murphy, pennlive.com, February 04, 2013

…The American Federation of State, County and Municipal Employees Council 13 on Thursday amended its lawsuit in Commonwealth Court to provide two additional reasons why it thinks the court should stop the administration’s outsourcing of the lottery’s management….

Corbett Gives U.K. Firm 20-Year Pennsylvania Lottery Deal
Source: Romy Varghese, Bloomberg, January 17, 2013

Pennsylvania Governor Tom Corbett handed the management of the state’s $3.48 billion lottery to the company that runs Britain’s National Lottery. Disregarding criticism from Democratic lawmakers and a union representing lottery workers, Corbett awarded the 20-year contract yesterday to Camelot Global Services PA LLC, which is part of U.K.-based Camelot Group Plc. The attorney general’s office received the contract yesterday and will have 30 days to review it, Eric Shirk, a spokesman for the governor, said by e- mail. …

Inside the Bid to Privatize the PA State Lottery
Source: Randy LoBasso, PhillyNow blog, January 15, 2013

British firm wins Pennsylvania Lottery management
Source: Paul J. Gough, Pittsburgh Business Times, January 14, 2013

It’s official: Pennsylvania will become the third U.S. state to have a private firm run its lottery. Camelot Global Services, which also runs the British lottery, will pay $34 billion over the next 20 years to run the Pennsylvania Lottery. …

Pennsylvania lottery workers’ union pitches own plan
Source: Laura Olson, Post-Gazette, January 9, 2013

Arguing that the state is comparing “apples to screwdrivers” in weighing a private company’s plan for boosting state lottery profits against the projected performance of public employees, a union representing lottery workers says it can beat the bid. In a proposal submitted Tuesday to Gov. Tom Corbett’s administration, the American Federation of State, County and Municipal Employees Council 13 contends that the bid from Britain-based Camelot Global Services PA LLC would provide less funding for seniors programs and too little security against missing its profit margins. …

Union fights effort to privatize Pa. Lottery
Source: Amy Worden, Philadelphia Inquirer, January 9, 2013

Unionized employees make Pa. Lottery pitch
Source: Marc Levy, Associated Press, January 9, 2013

Union say lottery privatization could be costly
Source: Melissa Daniels , Watchdog.org, January 8, 2013

Pennsylvania Lottery privatization Q&A: Secretaries of aging and revenue discuss Camelot Group bid3
Source: John L. Micek, Morning Call, January 8, 2013

…. Pennsylvania Revenue Secretary Dan Meuser and Aging Secretary Brian Duke took a few minutes to talk about the proposed privatization and the bid submitted by a North American subsidiary of the Camelot Group, which runs the National Lottery in the United Kingdom….

Corbett may hold hearings on privatizing the state lottery
Source: Laura Olson, Pittsburgh Post-Gazette, December 20, 2012

Lawmakers, union tiring of ‘secret’ talks on lottery privatization
Source: Mark Shade, Times Online, December 14, 2012

Editorial: More questions than answers in lottery deal
Source: Dave Fillman, Times-Tribune, December 16, 2012

State’s financial adviser doesn’t hide connection to only bidder for Pennsylvania lottery
Source: Jan Murphy, Patriot-News, December 06, 2012

A firm hired to advise Gov. Tom Corbett’s administration in its pursuit of privatizing the Pennsylvania Lottery management is no stranger to the company interested in taking over the lottery. The state’s financial adviser, Greenhill & Co., worked on the $576 million sale of the Camelot Group to its present owner, the Ontario Teachers’ Pension Plan, in 2010. One of Camelot’s companies, Camelot Global Services PA, was the only firm to submit a bid to take over running the state’s $3 billion-plus lottery enterprise for the next 20 to 30 years. Now both Greenhill, which has a financial incentive in its contract if the lottery’s management goes private, and Camelot stand to make millions if Corbett signs the privatization deal.

Pa. Auditor General-elect Eugene DePasquale questions the urgency in the Corbett Administration’s lottery management privatization discussion
Source: Jan Murphy, Patriot-News, December 06, 2012

Pa. House Democratic lawmakers blast away at Gov. Tom Corbett’s lottery privatization proposal
Source: Jan Murphy, Patriot-News, December 03, 2012

More questions than answers on lottery privatization
Source: Sen. Richard Kasunic, Daily American, November 29, 2012

…Last year alone, the lottery generated $3.48 billion in sales, reaping over $1 billion in profits – all dedicated to senior citizen programs, which was an increase of over 10 percent from the previous year. The lottery managed to achieve these record sales despite increased competition from casinos and other gaming offerings across our state. Without question, the lottery is one of the most well run, efficiently operated agencies in all of state government.

With this record of success, why has our governor been quietly seeking to outsource the lottery’s management, and hurry this closed-door process along with little public review or legislative scrutiny? The governor stated that he wants a private operator in place by the beginning of January.

Making matters worse and adding to a laundry list of already legitimate suspicions about this privatization process, we now learn that only one firm has bid to run our lottery. Citing concerns about the terms of the Private Management Agreement and the process, two other potential bidders bowed out in August and November, leaving British-based Camelot as the sole bidder. This lack of competition raises serious issues about the model the Corbett administration has chosen to solicit privatization proposals and begs the question of whether Camelot’s bid reflects the best deal we can get if we are going to continue down this misguided path…..

Pa. unveils $34B, 20-year bid to privatize lottery
Source: Marc Levy, Associated Press, November 21, 2012

The Britain-based company that runs the national lottery in the United Kingdom is pledging to produce more than $34 billion in profits over 20 years if it wins a contract to manage the Pennsylvania Lottery, Gov. Tom Corbett’s administration said Tuesday as it moves toward privatizing the state’s $3.5 billion system. The administration said it will weigh the offer by Camelot Global Services, which it said is good until Dec. 31, and is the only one it said it will receive after two other companies that it would not identify dropped out.

Privatize the lottery? Corbett administration moves forward with efforts
Source: Nick Malawskey, Patriot-News, November 09, 2012

As lottery privatization decision looms, another state offers advice
Source: Megan Lello and Radio Pennsylvania, WITF, August 8, 2012

Pennsylvania is currently looking into privatizing its lottery. But one official with the Illinois lottery, the only private system in the nation, is warning the commonwealth to carefully plan how it would choose a company to manage day-to-day operations.

Could the Pennsylvania lottery be privatized?
Source: Jan Murphy, Patriot-News, June 16, 2012

PA Lottery latest target in privatization campaign
Source: Mary Wilson, WITF, April 2, 2012

Pennsylvania exploring lottery privatization
Source: John L. Micek, Morning Call, April 2, 2012

Corbett eying private lottery manager
Source: Associated Press, March 31, 2012

Gov. Tom Corbett is taking steps toward hiring a private company to run the Pennsylvania state lottery, the latest move by the Republican to shift state services to the private sector….Last year, a private group that includes GTECH and Scientific Games took over management of Illinois’ lottery with promises to boost sales and revenue. The group gets a $15-million-a-year management fee and a percentage of profits it produces above a certain level….

Augusta set to bring outsourced human resources services back in-house

Source: Susan McCord, Augusta Chronicle, August 4, 2014

Four years after city leaders pushed to outsource the government’s health and welfare benefits administration to global outsourcing firm Automatic Data Processing, the service might be headed back in-house. According to Human Resources Director Tanika Bryant, despite ADP’s contract to handle most benefits-related calls from current and retired employees, the two city benefits representatives are still swamped with calls. It would be cheaper to replace the benefits administration portion of ADP’s contract with three additional city staffers, she said….
Related:
$1 million price tag, internal memo listing ‘ADP Issues’ may doom privatization plan
Source: Chris Thomas, News 12, January 25, 2012

Commissioners recently all but rubber stamped a plan to privatize Augusta’s Human Resources and payroll department….We got our hands on two pages of supposed issues with ADP that were compiled by the city administrator’s office….The list makes mention of workers dropped from health care coverage.

‘Internal control weaknesses’ remain in city’s handling of computer contracts in wake of CityTime scandal: investigators

Source: Greg B. Smith, New York Daily News, July 25, 2014

Five years after the CityTime scandal surfaced, “weaknesses” in hiring and oversight continue to pose threats to the city’s big-ticket technology contracts, a Department of Investigation analysis has found. The DOI reviewed how the city handles large-scale computer contracts in light of CityTime — the fraud-plagued project to modernize the city’s payroll system that was projected to cost $63 million but ballooned to more than $700 million and led to prison time for three computer consultants….

Related:
DOI Issues Report From Its CityTime Investigation On Lessons Learned And Recommendations To Improve Management Of Large Information Technology Contracts
Source: The City of New York, Department of Investigation, Press Release, Release #13-2014, July 25, 2014

…Specifically, the Report found the City did not implement proper internal controls and other management safeguards to prevent substantial cost overruns and delays in connection with CityTime, and failed to detect the enormous fraud against the City and its tax payers. The deficiencies exposed include:
∙ inadequate executive oversight of the project by City officials;
∙ failure to appoint an integrity monitor;
∙ failure to control the expansion of the scope and cost of the project
∙ failure to hold contractors accountable for their inability to provide deliverables on schedule, and within budget;
∙ failure to properly vet contractors and subcontractors for conflicts of interest and potential fraud; and
∙ failure to plan for future City control over management and maintenance of the completed projects….

Three sentenced for $100 million fraud in botched automated payroll project in New York City
Source: Gregory N. Heires, New Crossroads, April 30, 2014

The conviction of three consultants charged in a $100 million fraudulent scheme involving a project to modernize the payroll system in New York City offers yet another lesson of the perils of contracting out. On Monday, the three defendants each received sentences of 20 years in prison for their role in implementing the automated payroll system known as CityTime, whose cost mushroomed from an initial budget of $63 million to more than $700 million over more than 10 years.

Three men involved in $100M CityTime fraud sentenced to 20 years in prison
Source: Daniel Beekman, New York Daily News, April 28, 2014

Gerard Denault, Mark Mazer and Dmitry Aronshtein were found guilty in November of siphoning away nearly $100 million associated with CityTime in a kickback and money laundering scheme. A Manhattan federal judge gave the men the maximum sentence for each count Monday, but will allow the sentences to be served concurrently, meaning each will spend about 20 years behind bars.

Three Contractors Sentenced to 20 Years in CityTime Corruption Case
Source: Benjamin Weiser, New York Times, April 28, 2014

A federal judge in Manhattan on Monday sentenced three men to 20 years in prison for their roles in the scandal-ridden payroll modernization project known as CityTime, and he also sharply criticized New York City’s contracting procedures for what he called a lack of “adequate and effective oversight.” The sentences fell far short of what federal prosecutors originally sought, but they were substantially more than others imposed in public corruption cases in the city and state. Originally budgeted to cost the city $63 million, the project skyrocketed in cost to $700 million by 2011, a federal indictment charged. Almost all of the more than $600 million that the city paid to its prime contractor, Science Applications International Corporation, “was tainted, directly or indirectly, by fraud,” the indictment said….

CityTime Trial Begins: Ripoff by Consultants Or ‘American Dream’?
Source: Mark Toor, The Chief, October 21, 2013
(subscription required)

Three men accused of theft, money-laundering and bribery in the CityTime case bilked the city of millions of dollars, stuffing safe-deposit box after safe-deposit box full of bills and shipping some of the money “all the way around the world and back again,” a prosecutor said in opening arguments Oct. 16. Assistant U.S. Attorney Howard Master listed what he said were the defendants’ ill-gotten gains: “Mark Mazer, 30 million dollars. Gerard Denault, nine million dollars. Dmitry Aronshtein, five million dollars. That’s how much money these three men pocketed.” The defendants were paid hundreds of thousands of dollars a year each, he said, “but their legitimate earnings did not satisfy their greed.” Mr. Mazer and Mr. Denault overbilled the city for independent contractors they hired to do computer programming for the project, he said, and Mr. Aronshtein paid bribes to Mr. Mazer for a piece of the lucrative contracting business….

…The money at issue flowed from fees the city paid for the hiring of independent contractors. Mr. Shargel gave an example of how the staffing situation worked. The city agreed that it would pay $129.10 per hour to SAIC for each Specialist 1 hired. SAIC would pay Technodyne, the contractor in charge of staffing, $110.30 per hour. Technodyne would parcel the requests out among staffing companies, which would get $102.53 per hour. Mr. Shargel gave examples of four consultants hired by the staffing companies who would earn $47 to $52 per hour….

Mayoral candidate Bill Thompson failed repeatedly as controller to intervene as payroll system CityTime ballooned in costs
Source: Greg B. Smith, New York Daily News, July 1, 2013

Bill Thompson signed off on seven authorizations to increase money for CityTime. Federal prosecutors called it a “fraudsters’ field day that lasted seven years.” The effort to modernize the city’s payroll system — a project called CityTime — began with high hopes: a promise of huge savings by bringing the pen-and-paper timekeeping systems for city workers into the 21st century. But from an initial price of $73 million, city spending ballooned to more than $700 million. Some $500 million of that money disappeared into a vast network of overseas bank accounts. Ten people would be indicted. ….

SAIC sacks 3 execs in wake of CityTime scandal probe
Source: David Hubler, Washington Technology, October 25, 2012

CityTime scandal hits SAIC’s bottom line
Source: David Hubler, Washington Technology, March 21, 2012

Contractor Strikes $500 Million Deal in City Payroll Scandal
Source: Michael M. Grynbaum, New York Times, March 14, 2012

SAIC still haunted by CityTime scandal
Source: David Hubler, Washington Technology, December 07, 2011

New York’s $600 Million Fraud Shows Privatization Doesn’t Pay
Source: Mischa Gaus, Labor Notes, July 27, 2011

City Payroll Project Was Riddled With Fraud, U.S. Says
Source: David W. Chen and William K. Rashbaum, New York Times, June 20, 2011

Company Involved in Payroll Project Shuts Down
Source: David W. Chen, New York Times, June 1, 2011

A New Jersey technology company that had been a major contractor on the Bloomberg administration’s troubled CityTime payroll project has abruptly halted operations and terminated its employees’ contracts amid a widening federal investigation, according to a company memo sent out late Tuesday night. The top two executives of the company, TechnoDyne L.L.C., have also left the country and returned to their native India….The United States attorney’s office in Manhattan and the New York City Department of Investigation have accused several employees of CityTime contractors of defrauding the city in an $80 million scheme that began in 2005. But even before the accusations, the automated payroll project had become a liability for Mayor Michael R. Bloomberg because of its costs, which have climbed to about $700 million after an initial estimate of $63 million. On Friday, investigators charged the project’s senior manager, Gerard Denault, with receiving over $5 million in kickbacks, as well as wire fraud conspiracy and money laundering. Mr. Denault urged his employer, Science Applications International Corporation, to hire TechnoDyne as the project’s main information technology subcontractor. TechnoDyne, based here, received $464 million out of $628 million that was paid to Science Applications International. According to the complaint, TechnoDyne funneled $5.6 million to a sham consulting company owned by Mr. Denault via three companies affiliated with TechnoDyne, including one owned by Padma Allen’s mother, and two others in India….

NYC’s Computer-System Cash-Dump Disaster / New York City threw away a mountain of cash over a new computer system. Now, finally, someone is going to pay.
Source: Graham Rayman, Village Voice, January 12, 2011

Berger, who worked for a CityTime consultant called Spherion, Mazer, and four other people were indicted last month for defrauding the city of $80 million… Supposedly acting as “quality assurance” consultants, Mazer, Berger, and their accomplices are instead accused of falsifying payments to shell companies, pocketing the proceeds, and making up phony time cards for work they never performed. The defendants have pleaded not guilty. Bondy, meanwhile, was suspended without pay following the indictments and forced to resign as the head of Bloomberg’s Office of Payroll Administration. He could face indictment as well. Bondy, it emerged, not only was a former CityTime consultant, but had also worked with Mazer in the past, yet he didn’t disclose those ties until years later. Originally slated in 1998 to cost $63 million over five years, CityTime has cost the city more than $760 million over its 12 beleaguered years of existence. Despite all that expense, the system is operating in only about a third of all city agencies. The cost overruns were caused by the vast complexity of the project and changes to the plans, claim Bloomberg officials and the company responsible for building the system, Virginia-based Science Applications International Corp. Nonsense, says a union official who represents city architects and engineers, and has closely tracked the project. “There’s no way that any problems or changes they had could justify a cost increase of more than 10 times,” says Local 375 vice president Jon Forster, who believes SAIC should face criminal investigation. “In 12 years, we haven’t changed the number of agencies or the number of employees. My sense is that someone saw a gravy train here, and they said, ‘Let’s go for it.'”

Six charged in $80M ‘CityTime’ rip-off
Source: Bruce Golding and David Seifman, New York Post, December 15, 2010

Four consultants to the city’s problem-plagued payroll system were busted today on charges of ripping off more than $80 million in an elaborate fraud and kickback scheme. The wife and mother of alleged ringleader Mark Mazer — who has been paid $4.4 million to help oversee the costly CityTime project — were also accused of helping launder proceeds of the five-year flimflam. According to a complaint filed in Manhattan federal court, Mazer steered more than $76 million worth of bogus contracts to firms run by Dmitry Aronshtein, who is believed to be a relative, and Victor Natanzon. To cover up the fraud, the three of them, along with co-defendant Scott Berger, allegedly cooked up phony timesheets intended to justify the spending. Aronshtein and Natanzon then kicked back more than $24.5 million to a series of shell companies controlled by Mazer’s wife, Svetlana, and his mother, Larisa Medzon, the complaint says. The Mazers allegedly used more than $3 million of their crooked cash to buy and renovate two homes, and also splurged on six late-model cars over the past two years.

Fraud Charges in New York’s Payroll Overhaul
Source: John Eligon, New York Times, December 15, 2010

Computer Scamsters Took Mayor Mike to Cleaners for $80M
Source: Tom Robbins, Village Voice, December 15, 2010

Controller John Liu orders firm to fix disastrous CityTime payroll system – or ELSE!
Source: Juan Gonzalez – NY Daily News, September 29, 2010

City Controller John Liu has won a huge victory for New Yorkers by finally shutting down the out-of-control CityTime spigot. Liu successfully rebuffed pressure from Mayor Bloomberg to sign off on another $130 million, three-year contract extension for defense giant SAIC to complete the computerized timekeeping and payroll system that is already years behind schedule and more than 10 times over budget. At the same time, Liu has halted the city’s use of biometric hand scanners – a sore point with city unions.

Statement by DC 37 Executive Director Lillian Roberts on CityTime

Audit Report on the Office of Payroll Administration’s Monitoring of the Oversight of the CityTime Project By Spherion Atlantic Enterprises LLC
Source: New York City Comptroller’s Office, Bureau of Audit, FM10-135A, September 28, 2010
See also: Audit brief

City Hall’s Budgetary Exuberance May Soon Fade Away
Source: by Glenn Pasanen, Gotham Gazette (NY), July 13, 2010

….. The CityTime computerized payroll project, significantly over budget, is “a prime example” of mismanagement, according to the comptroller. Juan Gonzales in a June 4 Daily News column pointed out that this system has already cost $700 million, 10 times its original estimated cost. It is not near completion, and the mayor is spending another $100 million on it this year. Earlier in the year the Daily News found that 230 private CityTime consultants received an average of $400,000 each this year. (City computer technicians cost an average $77,000 a year.) At a June 16 labor rally outside City Hall, Lillian Roberts, executive director of the city’s largest union, District Council 37, argued that a 15 percent reduction in city consultant contracts would save over $316 million and thus eliminate all service cuts and preserve city jobs.

‘Consultants’ getting $722M from city for doomed CityTime computer project
Source: Juan Gonzalez, Daily News (NY) Friday, March 26th 2010

The city is paying some 230 “consultants” an average salary of $400,000 a year for a computer project that is seven years behind schedule and vastly over budget. The payments continue despite Mayor Bloomberg’s admission the computerized timekeeping and payroll system – called CityTime – is “a disaster.” Eleven CityTime consultants rake in more than $600,000 annually, with three of them making as much as $676,000, city records obtained under a Freedom of Information request show….

Citytime contract: 1,000% over budget
Source: Diane S. Williams, Public Employee Press (NY), February 2010

DC 37 leaders blasted a 1,000 percent cost overrun on a computer contract — still unfinished after 12 years — that the city gave to former Giuliani officials with ties to the Bloomberg administration. They testified Dec. 18 before the City Council Contracts Committee, which is investigating how the $63 million Citytime deal ballooned to $700 million as the city budget went into the red and the mayor laid off employees….

Library board taps Bartholomew for contract with county

Source: Damian Mann, Mail Tribune, July 14, 2014

A newly formed library board has selected Medford lawyer Mark Bartholomew to represent it and help negotiate a more-than-$8 million contract with Jackson County. The board will pay Bartholomew $200 an hour and decided to turn down an offer by retired lawyer Bill Mansfield to work free of charge…. The contract with the county is a complicated legal document in which the county assumes administrative functions of the library district and contracts with LSSI for the management of the libraries. The current cost to operate the libraries for a year is $6.5 million, but the contract is for a more than 16-month period, rather than a year, because property taxes won’t be collected until November….. The library district was formed July 1 with the passage of Ballot Measure 15-122, designed to provide a permanent source of funding for all 15 library branches after county budget woes threatened to close them. Passed May 20, the measure allows the district to tax Jackson County property owners up to 60 cents per $1,000 in assessed value each year….
Related:
LSSI begins labor talks / NLRB complaint means workers rehired by library firm will still be unionized
Source: By Damian Mann, Mail Tribune (OR), February 13, 2008

A private firm that operates Jackson County’s 15 libraries is being forced to recognize that a majority of its employees are members of a union to resolve a complaint filed with the National Labor Relations Board. “It means library employees will have their union back and more of a voice at their work,” said Pauline Black, a library assistant in Ashland. Service Employees International Union Local 503 filed an unfair labor practice complaint again Library Systems and Services LLC on Dec. 18, 2007, with the National Labor Relations Board, which was scheduled to rule on the matter later this week….. Frank Pezzanite, president and chief executive officer of LSSI, said he wants to work with the union but his company did not envision it would enter into bargaining talks when it signed a contract with Jackson County to operate libraries.

Related:
Workers Get A Voice! BIG win for S. Oregon!!
Rogue Valley Independent Media, February 2008

Public libraries find outside management
Source: Annie Gentile, American City and County, Jan 1, 2008

……. In April, Jackson County, Ore., closed all 15 of its public libraries after the county lost $23 million from timber receipts after Congress failed to renew the Secure Rural Schools and Community Self Determination Act. County officials twice attempted to increase taxes for additional library funding, but both efforts were voted down, says County Administrator Danny Jordan. With no options left, the county closed the libraries, laying off 81 employees. … In October, the county contracted with Germantown, Md.-based Library Systems and Services (LSSI) to operate all 15 branches for five years for $27 million less than the county would have to spend to operate them in-house….