Category Archives: Insourcing/municipalization

Library groups call for inquiry after Carillion collapse

Source: Natasha Onwuemezi, The Bookseller, January 17, 2018

Libraries body CILIP has called for a public inquiry to investigate whether the government knowingly issued contracts for the delivery of public services to a failing company following the collapse of Carillion. The government services provider has gone into liquidation after losing money on big contracts and running up huge debts of around £1.5bn, putting thousands of jobs at risk across multiple sectors. Carillion has run several public library services since 2013, including Hounslow, Ealing, Croydon and Harrow. Hounslow terminated its contract with Carillion last August and on Tuesday (15th January), Croydon Council stepped in to “secure the long-term future” of all its libraries and “guarantee the jobs of library staff” by taking the running of its library service back in house. However, the councils of Ealing and Harrow have told The Bookseller they have not as yet terminated their contracts with Carillion. …

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Croydon libraries to be run by the council again to ‘protect jobs’ after Carillion collapse
Source: Andy Datson, Croyden Advertiser, January 15, 2018

Croydon Council has announced it “intends” to terminate its contract with troubled contractor Carillion and that it will take back control of running libraries across the borough, “protecting” jobs in the process. Construction giant Carillion announced on Monday (January 15) that it is to go into liquidation, putting thousands of jobs at risk across multiple sectors…..

Now Carillion remove home library service from the disabled
Source: Inside Cryodon, November 20, 2017

Carillion, the building company which runs Croydon’s public libraries, has been accused of “blatant discrimination” against the disabled over plans to withdraw the home library service from January 1, something described as a “disgraceful and stupid decision”…..

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City-owned Internet services offer cheaper and more transparent pricing

Source: Jon Brodkin, Ars Technica, January 15, 2018

Municipal broadband networks generally offer cheaper entry-level prices than private Internet providers, and the city-run networks also make it easier for customers to find out the real price of service, a new study from Harvard University researchers found. Researchers collected advertised prices for entry-level broadband plans—those meeting the federal standard of at least 25Mbps download and 3Mbps upload speeds—offered by 40 community-owned ISPs and compared them to advertised prices from private competitors. The report by researchers at the Berkman Klein Center for Internet & Society at Harvard doesn’t provide a complete picture of municipal vs. private pricing. But that’s largely because data about private ISPs’ prices is often more difficult to get than information about municipal network pricing, the report says. In cases where the researchers were able to compare municipal prices to private ISP prices, the city-run networks almost always offered lower prices. This may help explain why the broadband industry has repeatedly fought against the expansion of municipal broadband networks. This fight includes pushing legislators to draft anti-municipal broadband state laws, lobbying against local ballot initiatives, and filing lawsuits against cities that build their own networks. …

Council unanimously votes to take back library operations

Source: Andrew Clark, The Signal, January 9, 2018

Santa Clarita decided to take back full control of its library system Tuesday evening. The Santa Clarita City Council voted unanimously to end a contract with Library Systems and Services, LLC, and independently operate and staff the Santa Clarita Public Library system. … he move looks to save the city about $400,000 in what would be the city’s first fiscal year of operations. The decision comes nearly seven years after the city pulled the libraries out of the county system and contracted with Library Systems and Services to operate and staff libraries in Newhall, Valencia and Canyon Country. City documents noted the city initially had success with LSSI as library hours were expanded and the annual budget for books and materials was increased, but the company’s performance has declined in recent years. …

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Privatization–and Pushback–Proceed in Santa Clarita
Source: Beverly Goldberg, American Libraries, July 27, 2011

…. Mayor McLean’s sentiments about public accountability are echoed in a new toolkit from ALA’s Office for Library Advocacy. However, “Keeping Public Libraries Public: A Checklist for Communities Considering Privatization of Public Libraries” makes no bones about ALA’s opposition to library privatization. …. That distinction has also captured the interest of the California legislature, where a bill is being considered that would regulate under what circumstances the management of a library that is withdrawing from a free county library system could be privatized.

IPERS considering in-house management of retirement funds

Source: James Q. Lynch, The Gazette, January 16, 2018
 
IPERS officials told Iowa lawmakers it likely will be next year before they ask for legislative changes to allow in-house management the $30 billion public employee retirement fund.  IPERS, Iowa Public Employee’s Retirement System, which paid out $2 billion in benefits last year, is in “preliminary discussion” of what they are calling internal investment management. Currently, IPERS contracts for outside management of its funds, but CEO Donna Mueller and Chief Investment Officer Karl Koch told the House State Government Committee Tuesday they believe millions of dollars could be saved annually through in-house management of investments.  However, they added, the change would require “significant” startup investment as well as trading, accounting and control infrastructure. …

Peorians Deserve Their Water Back

Source: Jenya Polozova, Food & Water Watch, December 14, 2017

Illinois American Water is running a complicated show in the City of Peoria. They control the water system and they’re charging residents twice as much as what customers of neighboring public systems pay and the U.S. average. Water privatization in Peoria mirrors issues that towns all across the country run into when they sell a public resource to a privately owned corporation. Each time it means: losing transparency, accountability, management, and reliability. In sum, local residents have little say over the operations of the water system. … With the deadline of fall 2018 fast approaching, it’s finally time for Peorians to take their water back – but the water company is not going to go come to the negotiation table without a fight. …

… Years of propaganda and messaging campaigns create doubt that a City has the ability to provide services. But, when it comes to water systems, public provision is the American way.
… This trend to public ownership continues today. In June, Missoula, Montana, bought its water system from a provide company to provide long-term stability and better water resource management, as well as to make necessary improvements. The system was losing more than half of its water through leaks. The city plans $30 million in investments over the next 5 years — all without raising water rates. As the mayor said: “The city of Missoula is in this business for only one reason and that’s to serve customers. Water is it.” While it is understandable that the local union in Peoria fears that jobs may be jeopardized if the city takes over the water company, the City Council can and should include recognizing the local labor union and keeping the existing workforce as part of the municipalization effort. Not a single union worker should be dropped. Furthermore, cities that take back their water systems experience incredible economic benefits as a direct result. Take the city of Evansville, Indiana, where remunicipalization from IAW was expected to save the city $14 million over a short period of five years. Or even the city of Cave Creek, Arizona, where the city took back their water from American Water and saved an astonishing $1,335,017. …

Unhappy with cleanliness, Chesterfield school leaders break ties with outside custodial service

Source: Vanessa Remers, Richmond Times-Dispatch, December 12, 2017

Chesterfield County School Board members will bring at least some of their custodial services back in-house, cutting ties with an outside contractor that school officials said couldn’t keep the county’s schools clean enough. School Board members voted unanimously Tuesday not to renew their contract with Tennessee-based Service Solutions Corporation. Instead, they moved forward with a hybrid plan in which the daytime custodial work will be done in-house and after-school cleaning will be completed by at least three outside contractors. … In the past two years, school officials charged SSC more than $400,000 in penalties for not meeting the contracted level of cleanliness. … To shift back to at least some in-house custodial work, School Board members supported hiring custodians to work as day porters, in addition to outsourcing after-school cleaning to at least three contractors. That could cost the school system approximately $19 million in the first year, according to a plan that has been proposed by staff. That’s about $7 million more than it pays now under the current SSC contract. The tab could increase to $23 million annually as the schools increase staff to achieve a higher “ideal” level of cleanliness. … The school system switched from providing custodial services in-house to an outside contractor three years ago, in part because the shift would save millions. But even before that switch happened, school officials said the internal system wasn’t staffed properly. …

Video: Deal of the Year 2017 – Small Issuer: City of Missoula, Mont.

Source: Bond Buyer, December 6, 2017

The city of Missoula, Montana waged a six-year legal battle to wrest control of its water system from a private company. The water system in the town of 70,000 was privately-owned by Mountain Water – a company that refused to make needed repairs to the system or sell it to the city. … Obtaining traditional financing with no disclosure from Mountain Water — and water assets nearly beyond repair — was unattainable given the risks. The city also had to provide payment before the court could rule it owned the water system. The solution: the direct sale to Barclays of nearly $140 million in A-rated bond anticipation notes. The financing plan uniquely provided the necessary mechanics to allow the city to purchase the water system. Prior to the acquisition, water bills were 17% higher than elsewhere in the state, but dropped to 49% below average after the deal.

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City Of Missoula Takes Ownership Of Mountain Water Company
Source: Beau Baker, MTPR, June 22, 2017

The city of Missoula has taken ownership of the water utility that serves its residents after a three-year court battle. The city bought Mountain Water Company for $84 million and paid another $6.8 million to developers who had a claim against the company. A separate bundle of transition costs, the bulk of which are attorneys’ fees, amounts to $7.5 million.
Mayor John Engen said city attorneys originally estimated the legal costs would be $400,000. Missoula won the right to buy the utility in an eminent domain case. It now joins all 128 cities and towns in Montana in controlling and owning its own water and distribution system. … Merriam says there are no immediate plans to change the rates. …

One for the history books: Missoula will buy its water system
Source: Sherry Devlin, Missoula Current, February 22, 2017

In an historic vote Monday night, the Missoula City Council unanimously approved the purchase of Mountain Water Co., forever ensuring the city’s “access to clean, affordable and reliable water.” … Throughout the recent effort, and decades of unsuccessful attempts by previous mayors and councils, the goal has been to place Missoula’s drinking water system into public ownership. … That now could happen by the end of March. With Monday’s vote, the local water system will be free from an increasingly distant and disaffected roster of corporate owners, most recently The Carlyle Group, a global investment fund, and the Canadian utility Algonquin Liberty. … Missoula’s water has always been in private ownership; all other Montana cities own their water system. … In fact, Bender said, Mountain Water Co.’s purchase by an international hedge fund – The Carlyle Group – imperiled every future generation.
The city’s purchase of its drinking water system will benefit those future generations the most, Bender said. …

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Editorial: Laketran, Painesville Township applauded for cost-saving efforts

Source: The News-Herald, December 2, 2017

… At Laketran, an idea that will save money and potentially produce revenue arose after the transit agency began having difficulty finding vendors to perform alignments on its 35-foot transit buses and 40-foot commuter coaches. As Bare considered alternatives, he came up with an idea that led back to Laketran’s own maintenance garage. He suggested Laketran bring alignment service in-house with potential to sell the services through governmental agency contracts. … “We believe there are other governmental agencies, like the county or local school districts, that may be having the same difficulties,” said Laketran General Manager Ben Capelle. “Once our maintenance department is trained and we have a general idea of how much time the alignment will take, we plan to offer alignment services to governmental agencies within Lake County. … So with a state-of-the art alignment machine and a staff of highly skilled mechanics, Laketran has positioned itself to not only save on maintenance expenses for its own bus fleet, but also to work with other governmental agencies who need similar work done on their buses or trucks. The concept of regionalism — government entities from different nearby communities sharing services, personnel or programs to save money for all parties involved — has become quite popular in recent years. So give Laketran credit for seeing how doing alignment services in-house was a smart idea. …

JEA Privatization Uniquely More Complicated Than Other Efforts Around The State

Source: Ryan Benk, WJCT, December 6, 2017

Following a regular board meeting that saw departing member Tom Petway charge his soon-to-be former colleagues with exploring privatization, JEA’s board chair is calling for a swift examination of the utility’s assets. … Should the board and Jacksonville’s political leaders decide privatization is the right path, JEA would not be the first municipal utility to do so in Florida. In fact, there are even examples of voters deciding to go the opposite direction: From private to public. Still, according to one expert, the massive tentacles of JEA’s electric grid, water service and sewer system — which serve more than 450,000 electric, 337,000 water and 261,000 sewer customers in Northeast Florida — would represent one of the largest and most complicated such conversions in Florida’s history. … After a lengthy 2012 exploration of JEA’s assets and the logistics of the city splitting with the utility, the decision was ultimately made to shelve the privatization idea. The last time an audit of JEA’s value was conducted in 2007, it was pinpointed at $2 billion as a municipal utility and more than $3 billion if it went private.

… Most recently, Winter Park successfully booted Progress Energy (now Duke Energy) and municipalized. Meanwhile voters in South Daytona Beach rejected a similar effort to turn their utility public. Kurry said data on customer satisfaction is mixed. Winter Park voters are generally happier with their choice and so are those in South Daytona Beach. … Just as murky as ratepayer views on service quality, customer perception of pricing fairness is mixed across the sector. …

Dallas district takes steps to operate its own school buses

Source: Mike Kennedy, American School and University, December 4, 2017

As expected, the Dallas school district is moving forward on taking over its own bus operations. The Dallas Morning News reports that the school system plans to pick up the pieces — including 925 buses and over 1,100 employees — from the soon-to-be-shuttered Dallas County Schools bus agency. Running its own in-house busing operations was the district’s most viable option, says Scott Layne, the Dallas district’s deputy superintendent for operations. Voters decided in November to shut down Dallas County Schools after numerous failings, including financial mismanagement, unpaid traffic violations and a questionable business deal involving stop-arm cameras. … According to a district analysis, Dallas is the only one among the state’s six largest school districts to use a vendor for busing, and cost-per-rider rate in Dallas was the highest among the six districts. The size of the district, spanning 384 square miles and parts of 16 different cities, makes it too difficult to find a transportation contractor for 2018-19, Layne says. Any outside vendor could take years to get online, needing time to assemble a fleet of buses and hire staff. … Layne expects the district will hire many of bus agency’s existing staff, including bus drivers, dispatchers, mechanics and monitors. At this point, it’s unclear how many of the 925 buses allocated to the Dallas district are leased by the bus agency, and it is uncertain whether those leases would be considered as part of the debt that would be absorbed in the dissolution of the contractor. A penny tax rate levied on property in the county will stay in effect until all of the bus contractors’ debt is paid off. …

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Report on Embattled School Bus Agency: ‘Ignorance, Incompetence, Negligence and Criminal Conduct’
Source: Scott Friedman and Jack Douglas Jr., NBC 5, November 16, 2017

A critical analysis, withheld for months by the former administrators of the Dallas County Schools bus agency, has now been released to NBC 5 Investigates, suggesting crimes were committed in a deal that cost taxpayers millions of dollars. The author of the report, former FBI agent Dennis Brady, didn’t mince words, stating that “ignorance” … “incompetence” … “negligence,” and possibly “criminal conduct” contributed to the financial woes for the school bus agency. The internal report, written last spring, was commissioned by the former board members for Dallas County Schools, in an attempt to determine whether crimes were committed in dealings between DCS and Force Multiplier Solutions, the company hired to equip school buses with security cameras. … Denise Hickman, the agency’s executive director of business during the deal, raised concerns when paperwork showed Louisiana businessman Slater Swartwood Sr. profited from the deal. Swartwood is linked to Force Multiplier Solutions, a company Dallas County Schools worked with on the camera business venture that got the agency into financial trouble in 2012. The purchase agreement describes Swartwood as the agency’s broker. He earned a $750,000 fee and nearly $200,000 was paid by the agency. Swartwood told the TV station in an email that he worked as a consultant for the buyer and didn’t know Dallas County Schools paid a portion of the fee. Force Multiplier Solutions is also linked with more than $245,000 in campaign contributions to the agency’s board president, Larry Duncan. …

Judge to decide fate of Dallas school bus contract
Source: Bob Kalinowski, Citizens Voice, June 27, 2013

Luzerne County Judge Michael Vough has a big decision on his hands regarding a multimillion-dollar bus contract in the Dallas School District.

Depending how he rules, a company that held the contract for decades could be forced out of business or another could be stuck with $2.1 million worth of new buses purchased to fulfill its newly awarded contract.

The school’s longtime contract holder Dallas-based Emanuel Bus Lines has asked Vough to grant an injunction to terminate the school’s new contract with Pike County-based G. Davis Inc.