Category Archives: Insourcing/municipalization

Kelly calls for 300 more workers to fix ‘cluster-mess’ KanCare application center

Source: Kansas City Star, January 18, 2019

Kansas Gov. Laura Kelly’s first proposed budget calls for hiring 313 additional state workers at a beleaguered Medicaid application center to take over some functions that were privatized by then-Gov. Sam Brownback. The KanCare Clearinghouse in Topeka has been a target of criticism from legislators, nursing home advocates and other groups since Brownback established it in 2015 and contracted with a Virginia-based company called Maximus to run it. Under Maximus, a backlog of Medicaid applications ballooned into the thousands, leaving nursing homes to wait months or even years for compensation. Some had to stop taking in people whose applications were still pending, leaving them to search elsewhere for a bed. …

Related:

Colyer: Kansas Will Pursue Medicaid Work Rules Despite Court Ruling
Source: Jim McLean, Salina Post, July 3, 2018
 
Kansas Gov. Jeff Colyer says he will continue to push for a Medicaid work requirement despite a recent court order blocking a similar policy in Kentucky. Last week, U.S. District Judge James Boasberg, an Obama appointee in the District of Columbia, questioned whether the Trump administration had adequately considered the consequences of Kentucky’s work requirement before reversing longstanding federal policy to approve it.  Despite the setback, Colyer said his administration will continue discussions with federal officials about requiring some of the more than 420,000 Kansans enrolled in KanCare, the state’s privatized Medicaid program, to work or pursue job training. …

Kansas chooses 3 companies to manage Medicaid
Source: Associated Press, June 22, 2018
 
The Kansas Department of Health and Environment has awarded new contracts to three insurance companies to manage the state’s privatized Medicaid program.  Two of the new contracts announced Friday are renewals for companies currently in the program, Sunflower State Health Plan Inc. and United Healthcare Midwest Inc. The Lawrence Journal-World reported that the third contract went to a company new to the program, Aetna Better Health of Kansas Inc….

Continue reading

After High-Profile A Line Troubles, RTD Plans To Operate N Line Itself

Source: Colorado Public Radio, January 24, 2019

Before construction started on the Regional Transportation District’s N Line in 2014, most of the agency’s senior leadership thought that the private contractor building, maintaining and operating RTD’s other commuter rail lines — the A, B and G lines — should operate the new line to Thornton as well. … In the intervening years, the A, B and G Lines — collectively known as the EAGLE Project — have been beset by delays, dramatic breakdowns, lawsuits, and operational issues that put passengers at risk. While the A Line has been running smoother in recent years — 97 percent of trains are on time, RTD says — the transit agency has decided not to farm out operations to Denver Transit Partners. …

Editorial: Consumers paid, then paid again

Source: Lexington Herald Leader, January 27, 2019

Five years ago, the private Kentucky American Water quit including local government fees on water bills then used the resulting revenue loss to justify charging Lexington households and businesses more for water. It still galls that the public had to pay twice — once because it cost $700,000 a year more to outsource sewer and other billing to the Cincinnati Water Works, and again when the water company used its annual loss of $1.59 million from canceling the city contract to argue for a rate increase, an argument accepted by the Kentucky Public Service Commission. The city recently brought the billing home, in hopes of eventually saving $400,000 a year. The transition to in-house billing also created six customer service jobs in Lexington. It appears to be a smart move by Mayor Jim Gray’s administration. The city has paid the increased billing costs out of fees paid by consumers. That’s millions of dollars that could have gone into upgrading sanitary sewers, controlling flooding and supporting recycling if Kentucky American had not ended the billing agreement. Most cities never face such a problem because most water utilities are owned by the public. …

The case against Chartwells

Source: CBS News, August 17, 2018

… Imagine the only meal a schoolchild ate came from a school’s kitchen dishing out spoiled and rotten food. It happens, Mills found out. … In 2010, he took a hefty paycut to take a job as director of food services for Washington, D.C.’s public schools, where he would oversee feeding some 50,000 students. … He took over a system where the food was supplied by Chartwells, a multibillion dollar company that managed the menus and made all the purchase agreements for the food. He was shocked by what he saw. … Mills found the food was poorly prepared, not healthy and, in some cases, unsanitary. … He took his concerns to Chartwells with no real change. Then the contract was up for renewal by the District, and Mills called for an audit. He maintained the school district was being overcharged millions. The school district removed Mills and his team from oversight of the auditors. Mills was told to back off. Three years after he was hired, he was fired. He then sought an attorney for wrongful termination – and as a whistleblower. …

Related:

Auditor: DC Schools Should Stop Outsourcing Food Service
Source: Associated Press, October 8, 2016

A report from the District of Columbia auditor said the city’s school system should stop turning over food service to outside contractors. The report released Friday said outsourcing food service has not saved the city money as school officials promised and will continue to cost the system millions of dollars a year. In their response to the auditor’s report, school officials said they continue to oppose bringing food services back in-house. Former schools chancellor Kaya Henderson repeatedly argued that food service was not a “core competency” of the school system. …

Chartwells Era Ends As DCPS Selects New Food Providers – Following a whistleblower lawsuit last year
Source: Andrew Giambrone, Washington City Paper, May 23, 2016

The school-food provider at the heart of a whistleblower lawsuit in 2015 that revealed substandard food quality and fraud will not serve D.C. Public Schools students next academic year. DCPS announced in a statement on Friday that it has chosen DC Central Kitchen and SodexoMagic, with Revolution Foods as a subcontractor, to provide meals at more than 110 facilities. … The announcement follows a request for proposals DCPS posted in December, featuring a one year contract with four options years to renew. Still, which entities applied for the RFP won’t be publicly available until the contracts are approved because of procurement rules. Under the proposal, 12 schools in Ward 7 would be served by DC Central Kitchen, while the rest would be served by SodexoMagic and Revolution Foods. DC Central and Revolution served hundreds of thousands of meals last year. ….

Continue reading

Michigan’s Failed Effort to Privatize Prison Kitchens and the Future of Institutional Food

Source: Tom Perkins, Civil Eats, August 20, 2018
 
The stated purpose of Michigan’s privatization plan was to save the state money on operating costs—replacing union workers earning $15-$25 per hour with low-wage Aramark workers earning $11-$13. But critics point out that disabling the union positions in prison kitchens served as an added benefit. In 2013, the MDOC signed a three-year, $145 million contract with Aramark despite the fact that a union—the American Federation of State, County, and Municipal Employees (AFSCME) Council 25—offered to match that price. The union-busting point was driven home in 2015, when the department dumped Aramark and switched to Tampa-based Trinity Food Services, with which it signed a three-year, $158 million contract—a more expensive contract than what AFSCME had offered. …

Related:

Despite problems, Michigan is hiring Trinity employees to work in its prison kitchens
Source: Tom Perkins, Detroit Metro Times, June 19, 2018

For several years, private food service employees in Michigan’s prison kitchens have been a consistent problem. … Despite that, the Michigan Department of Corrections is now hiring some of Trinity’s employees, and they will be unionized state workers within the next several months. … The employees will be a part of the American Federation of State, County, and Municipal Employees union. Nick Ciaramitaro, legislative director for AFSCME Council 25, didn’t immediately respond to a request for comment. …

Michigan’s $56.8B budget tackles prisons, potholes and pot
Source: Emily Lawler, MLive, June 12, 2018

The House and Senate on Tuesday voted to approve a $56.8 billion budget for Fiscal Year 2019, putting more money toward things like roads and regulating medical marijuana facilities while saving $19.2 million by closing a prison. … In his budget proposal earlier this year, Snyder moved to get rid of the contractor altogether and go back to state workers. The legislature followed suit, putting an extra $13.2 million into food services and authorized 352 new full-time equivalent employee positions.    Overall the Department of Corrections gets $2 billion in the budget. …

Continue reading

City of Fort Wayne takes fleet maintenance in house; savings expected

Source: News-Sentinel, July 11, 2018

In a move expected to improve service and reduce costs, the city of Fort Wayne will no longer outsource fleet maintenance services and will instead bring operations in-house. Ending the contract with outside vendor, First Vehicle Services, is expected to save the city nearly $350,000 a year. … The new contract will also allow the city to take advantage of federal and state cooperative agreements, reducing costs on vehicle parts. Current workers for First Vehicle were offered positions in the new arrangement and most accepted. The city will hire 26 employees and will take over the operation Sept. 30.

MEU fails by three votes

Source: Sarah Strandberg, The Decorah Newspapers, May 14, 2018

The special election May 1 on whether the city of Decorah should be authorized to pursue a municipal electric utility (MEU) has been defeated by three votes. Following a recount Friday morning, two more “yes” votes were added, bringing the final total for the referendum to 1,385 “no” votes to 1,382 “yes” votes. Alliant Energy is the city’s current electrical provider. A citizens group, Decorah Power, asked the city to explore the possibility of a MEU. … Since the MEU was defeated, the matter cannot be brought back for a vote for another four years. … The “incredibly close” vote is a testament to the work of Decorah Power volunteers and supporters, Decorah Power volunteer Emily Neal said after the recount. … “We hope that the Iowa Utilities Board and Iowa lawmakers are paying attention to what happened here. If the role of the Iowa Utilities Board is indeed to look out for the consumers’ best interest, then the process for municipalizing needs serious reconsideration. …

Related:

Power struggle: Iowa muni campaign heats up ahead of public vote
Source: Karen Uhlenhuth, Energy News Network, April 9, 2018

Voters in Decorah, Iowa, will decide May 1 whether they want the city to move ahead with a proposal to leave their current electricity provider and create a city-owned utility to take its place. … According to municipalization advocates, the utility, which is based 100 miles south in Cedar Rapids, has hired a community liaison to represent it at community gatherings. … Both camps developed feasibility studies, with vastly differing conclusions. Interstate’s study found that creating a municipal utility would be very costly and raise bills for customers using the 8,100 meters in the Decorah area. Decorah Power’s consultant concluded that a city utility would serve the community well and through 2023 charge at least 4 cents less per kilowatt hour than Interstate has projected. Estimates of what the city would have to pay for Interstate’s assets and startup and application fees were similarly at odds. … The election’s outcome won’t have a binding impact but will convey the thoughts of the city’s 5,250 registered voters, including some of the 2,000 Luther College students, whose election participation is once again the source of contention. …

Iowa town’s municipal utility effort is financially feasible, consultant finds
Source: Karen Uhlenhuth, Midwest Energy News, January 17, 2018

A northeastern Iowa community could lower its electric bills by creating a municipal-owned utility, according to a feasibility study presented to its city council Tuesday. Supporters of an effort to create a city-owned electric utility in Decorah, Iowa, got a boost this week from a consultant’s report that concludes the move is financially feasible. … Talk of a municipal utility surfaced after several attempts to develop renewable energy in the city ran into policies of Interstate Power and Light, the investor-owned utility that currently serves Decorah and much of the state. …

… Although the feasibility study, conducted by NewGen Strategies & Solutions and two other consultants, signaled that municipalization could work, Johnson said he’s aware of what a long and arduous process it would entail. The City of Boulder (Colo.), for example, last November approved a tax measure that will provide the funds needed to continue exploring the possibility of creating a city utility. That process began seven years ago. … Every year there are communities that start to explore creating a municipal utility to take the place of a for-profit utility, Schryver said. Although motivations tend to vary, she said that the desire for clean energy has been the main driver recently. A few new municipal utilities have taken shape lately. In California, the South San Joaquin Irrigation District, which provides water service, recently won approval from state authorities to create an electrical utility as well, meaning it will displace Pacific Gas & Electric in that locality. … Jefferson County in Washington state formed a municipal utility in 2013 to serve about 18,000 customers who formerly purchased electricity from Puget Sound Energy. Three smaller communities — two in Alaska and one in Ohio — also created new municipal utilities in the past few years, according to Schryver. Although exploration of municipalization doesn’t always result in a city-owned utility, Schryver said it can effect change in other ways. In Minneapolis, for example, efforts to depart from Xcel Energy ceased when the utility agreed to expand its clean-energy portfolio. …

Mayor Curry ‘will not submit JEA privatization plan to Council’

Source: Jim Piggott, News4Jax, April 26, 2018
 
Months into a political firestorm over the prospect of the city selling the JEA, Jacksonville Mayor Lenny Curry issued a statement Thursday morning, writing, “I am choosing to state unequivocally that I will not submit any JEA privatization plan to the City Council.” … While Curry has been consistent in his public statements that he is not pushing the agenda, members of City Council and the council auditor believe that his administration was working behind the scenes to valuate the electric/water/sewer utility for possible sale. …

Related:

JEA names private investor, a utility newcomer, interim CEO 
Source: David Bauerlein and Nate Monroe, Florida Times-Union, April 17, 2018

The JEA board of directors named a 38-year-old private investor with little experience managing a large utility the agency’s interim chief executive officer Tuesday, rejecting a bid by the finance chief to remain in the top spot, and marking a major departure from the kind of leaders JEA courted in the past. Aaron Zahn immediately assumed the interim CEO role and refused to take questions after the board meeting. The move to hire Zahn was contingent upon making a push to retain Melissa Dykes, the agency’s chief financial officer, as a high-level executive to run the day-to-day operations of the agency. Dykes, whose own bid to remain the interim CEO only garnered two votes from the five-member board, said she was open to staying but it’s not clear whether she will. …

Opinion: JEA union leaders explain opposition to sale
Source: Kathleen Crowe, Valerie Guiterrez, Rick Lehman, Ronnie Burris, Randy Hilton, April 15, 2018

Question: Would a private utility better serve the city of Jacksonville and the JEA ratepayers of Northeast Florida better than JEA? Answer: It is the official position of the JEA union leadership that a privatization of JEA would have severe, harmful and long-term detrimental economic impacts on all stakeholders. … While we have attempted to counter much of the noise regarding the privatization of JEA, there is a very simple reason for not selling JEA that overcomes all the noise. Any company or entity willing to buy JEA, whether it is $1 billion or $20 billion, must have the resources to ensure the price it pays will definitely be paid back in full with interest. This is not like selling your house for a premium and walking away with no further commitment to that house. The customers of JEA will still be on the hook for the premium paid in the initial purchase price, as well as the interest or earnings above and beyond that premium paid to the city. …

Jacksonville utility unions pan potential JEA sale as ‘harmful’
Source: A.G. Gancarski, Florida Politics, April 6, 2018
 
Even as well-connected lobbyists for major utility companies hover over Jacksonville’s JEA ahead of a potential sale, five utility unions combined in opposition to any moves Friday. Per a statement from the five unions: “It is the official position of the JEA Union Leadership that a privatization of JEA would have severe, harmful, and long term detrimental economic impacts on all stakeholders.” … Signatories include American Federation of State, County & Municipal Employees, International Brotherhood of Electrical Workers. Jacksonville Supervisor Association, Labors International Union of North America, and the Professional Employees Association. …

Continue reading

Cobo Center to save $200,000 annually by bringing janitorial services in-house

Source: Kurt Nagl, Crain’s Detroit Business, April 13, 2018

Cobo Center is on track to save around $200,000 annually on housekeeping by bringing those services in-house. The Detroit venue parted ways with The Professional Group, a janitorial services provider based in Detroit, last October and is pleased with the savings and performance of the restructured team, said Claude Molinari, general manager of Cobo. The venue’s budget for housekeeping this year is $1.75 million a year, which would mean a savings of 10 percent compared to the cost last year, Molinari said. Cobo, which is operated by the Detroit Regional Convention Facility Authority and managed by SMG, had contracted with Detroit-based ABM Janitorial Services for several years prior to The Professional Group winning the bid in 2016. The Professional Group terminated the contract after one year. … Molinari said that under the new management structure the average wage of a full-time cleaner is $13.50 plus benefits — up from an average of $11.10 plus benefits before the new arrangement. …

Whittier-area schools have new bus provider — it’s the high school district

Source: Mike Sprague, Whittier Daily News, April 14, 2018

When Hun Joon “Paul” Lee, a 19-year-old special needs Whittier Union High student, died after being left inside a parked, hot school bus in 2015, his death sparked a movement that culminates with what is essentially a new bus provider for seven Whittier-area school districts. Whittier Union High School District has left the Pupil Transportation Cooperative, or PTC, which had been providing bus transportation since 1984. Instead, starting July 1, it will run the buses for all seven PTC member districts — East Whittier City, El Rancho, Little Lake, Los Nietos, South Whittier and Whittier City. … After his death, Lee’s family received $23.5 million in a settlement with the PTC. In turn, the PTC sued the high school district last year for partial compensation of the settlement. That lawsuit since has been dismissed. Now, with the contracts approved Tuesday, the changeover from the PTC to the high school district is nearly ready to go. …

Related:

Bus Company to upgrade safety policies after death of special-needs student in Whittier
Source: Miriam Hernandez, ABC7 Eyewitness News, September 16, 2015

Immediate safety upgrades will be put into place by Pupil Transportation Cooperative following the tragic death of a 19-year-old man with special needs in Whittier, the company announced during a press conference Wednesday. … PTC will be pushing for electronic notification devices to be placed in school buses and two adults will now monitor every bus to ensure no student is left on board. … DeLapp said the substitute driver was a 10-year veteran who may not have known Lee’s limitations. Yet there is evidence the driver ignored what is characterized today as a standard child check procedure, which is spelled out in the bus operator manual. “Walk the entire length of the bus interior, front to rear, and check for students who may still be on board,” the manual states. DeLapp said the procedure was signed off, but yet Lee was still inside the bus. …

Special Needs Student Found Dead on School Bus May Have Been Waiting for Instructions: Family
Source: Hetty Change and William Avila, NBC Los Angelos, September 14, 2015

When family members learned that Lee had been left on a school bus on a hot Friday afternoon, they thought he may have stayed there waiting for a cue. The 19-year-old was found alone and unresponsive. Police could not revive him. Lee, or Paul to those who knew him, had a severe form of autism. Leslie Perez’s mom was his caregiver. She says her mom waited outside for Lee’s bus to drop him off at 3:30 p.m., like she does every afternoon, but it never showed up. Police found the adult school student lying in the aisle near the front of the bus parked in a Whittier school district parking lot. He was declared dead — less than two weeks before his 20th birthday — after lifesaving efforts failed. … It’s also unclear whether drivers with the bus company, Pupil Transportation Cooperative, are required to do head counts. Family members say a different bus driver had picked him up that morning.