Category Archives: Insourcing/municipalization

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. …

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. …

Related:

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.

DCFS vows change to program that saw surge of child deaths

Source: David Jackson and Gary Marx, Chicago Tribune, October 25, 2017
 
Following a Tribune report on deaths of children in a privatized child welfare program, a state Department of Children and Family Services official said Tuesday that the agency has started taking back some of those cases from contract agencies and will handle them in-house.  Nora Harms-Pavelski, the agency’s deputy director of child protection, also disclosed at a legislative hearing Tuesday that agency administrators are now getting immediate reports on any instance of mistreatment of a child in the “intact family services” program, among other reforms. …

Related:

Child deaths spike after DCFS privatizes ‘intact family services’
Source: David Jackson and Gary Marx, Chicago Tribune, October 23, 2017
 
The state Department of Children and Family Services had conducted two abuse investigations into Verna Tobicoe’s Southeast Side home in the months before her death in May 2015. The agency also had hired a nonprofit group to make frequent visits and conduct safety checks on Verna and two siblings. … And then 44-pound Verna became part of a growing pattern of similar fatalities: She was one of 15 Illinois children to die of abuse or neglect from 2012 through last year in homes receiving “intact family services” from organizations hired by DCFS, a Tribune investigation found.  There was only one such child death under the intact family services program during the previous five years from 2007 through 2011, according to DCFS records released to the Tribune under the Freedom of Information Act. … The spike in deaths began in 2012 after DCFS completely privatized the program, putting the care of families in the hands of nonprofit groups but doing little to evaluate the quality of their work, give them guidance and resources, or hold them accountable when children were hurt or put at risk, the Tribune found. …

CalOptima Takes Mental Health Administration In-House

Source: Thy Vo, Voice of OC, September 11, 2017

CalOptima, the county’s health care plan for low-income and elderly residents, now will administer its own mental health care services, after the agency voted to phase out its $41 million-a-year contract with Magellan Health. The agency’s Board of Directors voted Sept. 7 to take administration of mental health services for a majority of the health plan’s members in-house, including responsibilities like contracting with mental health providers, processing reimbursement claims and overseeing therapy programs for patients with autism. Patients still will see outside specialists for treatment. This will be the third time in three years the agency has made a major change in the management of its mental health services, and the change comes just one year after the agency approved its original contract with Magellan. … CalOptima is the federal and state financed health plan for about 800,000 county residents, roughly a quarter of the population. … The change was prompted in part by a contract dispute between CalOptima and Magellan in July, which may have left some patients without mental health care for nine days when the company refused to process Medi-Cal payment claims. …

Niles Township High School Union Contract Ushers In New Era

Source: Tom Robb, Journal & Topics Online, August 23, 2017

The Niles Township High School Dist. 219 Board of Education on Aug. 15 approved a new contract for the Niles Township Federation of Teachers and Support Staff, who earlier the same day voted to accept the July 1, 2017-effective agreement. … Under the new agreement, 37 staff support positions currently performed by outsourced contract workers will become direct district employee positions. The contract also covers 369.5 full-time teachers and 205 support staff.
Maintenance, clerical and librarian jobs that were contracted would become district union employee positions. Cafeteria, janitorial, security and transportation workers would remain contracted. District and union officials said district employees would have preference in hiring to fill those positions.

… The shift from contracted workers to direct district employees is significant. According to union President Ann Goethals, former Supt. Nanciann Gatta was on record as wanting to have only teachers and paraprofessionals working as classroom teacher aids to be in union bargaining units. Before her departure in 2015, Gatta told the Journal she was trying to outsource non-core educational positions in the district. Supt. Steven Isoye said the having the majority of workers in the school as direct employees generates better productivity. Union members complained bitterly at a school board meeting last year about contracting and outsourcing positions. …

Harris County Nixes Private Prisons

Source: Allison Lee, Houston Public Media, August 1, 2017

Private prisons usually get a bad wrap from advocates, for a lack of oversight. But, that wasn’t main reason behind Sheriff Ed Gonzalez shifting the department away from private prisons. … “Within three months, we were able to move everybody back in house,” Gonzalez said. … According to the Harris County Sheriff’s office, the department spent $4.5 million on outsourced inmates last fiscal year. This fiscal year, they’re projecting to spend just under $300,000 (for what’s been spent before the transition). … He says there are also other benefits to bringing inmates back in-house. “We have more control of what we’re doing. You know, the medical records, things like that,” Gonzalez said. Another benefit? Loved ones can visit inmates, without having to travel to other municipalities or cities.

Is Privatization on Its Way Out?

Source: Donald Cohen, HuffPost, July 27, 2017

According to a new report by the Transnational Institute, cities across Europe are increasingly deciding to reclaim public goods like water, energy, and health care from corporations and private investors. For example, fourteen cities in the Catalonia region of Spain have brought their water under public control in the past two years alone. … As always, the movement is starting at the bottom.  There’s Milford, Connecticut, a small city pushing to purchase its water system after learning that the corporation that owns it plans to raise rates by nearly 30 percent.  There’s New York, which just brought back state workers to provide IT help desk services after concerns about rising costs in a contract with IBM.  There’s Atlantic City, New Jersey, which earlier this month passed an ordinance to ensure residents get to vote on any action by the state to sell or lease the city’s water system.  There’s Baltimore, Maryland, where teachers just recruited hundreds of new public school students after weeks of knocking on doors. And Miami, Florida, where parents and teachers rallied over the weekend to demand more funding for public education and regulation of charter schools.

Read full report.

State workers to return to help desk jobs that had been outsourced

Source: Rick Karlin, Times Union, July 21, 2017
 
Less than a year after it started, the state Office for Information Technology Services is backing away from the outsourcing of its help desk, and will be once again have state workers assume many of those responsibilities. Soon after it began last fall, representatives of numerous state agencies complained they couldn’t get through to the newly privatized help desks, which were based in Buffalo but were backed up in Boulder, Colo. There had also been worries about the cost of the outsourcing. …  The agency said it will continue to work with its main outsourcing contractor, IBM, but state employees will provide on-site assistance at the various state agencies. The process will begin this month in the Capital Region. …

Towns sell their public water systems — and come to regret it

Source: Elizabeth Douglass, The Washington Post, July 8, 2017

Neglected water infrastructure is a national plague. By one estimate, U.S. water systems need to invest $1 trillion over the next 20 years. Meanwhile, federal funding for water infrastructure has fallen 74 percent in real terms since 1977, and low-interest government loans have not filled the gap. … The prospect of offloading these headaches to for-profit water companies — and fattening city budgets in the process — is enticing to elected officials who worry that rate hikes could cost them their jobs. Once a system has been sold, private operators, not public officials, take the blame for higher rates. But privatization will not magically relieve Americans of the financial burden of upgrading their water infrastructure. … One of the biggest inducements for water deals is the “fair market value” legislation that has been passed in six states — Indiana, California, Illinois, Missouri, New Jersey and Pennsylvania — and is being considered by others.  …

… Even as more cities consider selling their water infrastructure, others are trying to wrest control of their systems back from private operators, usually because of complaints about poor service or rate hikes. Since private owners are rarely willing to surrender these lucrative investments, cities usually end up pursuing eminent domain in court. That means proving that city ownership is in the public’s interest and then paying a price determined by the court. Those prices can be exorbitant. …

For some cities, promises of privatization fall short

Source: Mark Niesse and Arielle Kas, The Atlanta Journal-Constitution, May 18, 2017

In the beginning, the gospel of privatization was as if etched in stone. It was handed down from Sandy Springs, the first new city, to generations of descendants: Dunwoody, Johns Creek, Brookhaven and Tucker. … Sandy Springs is still an adherent of the outsourcing theory. But privatization has gradually given way to more traditional government in many of the nine cities that followed. … While Brookhaven, founded in 2012, started in the Sandy Springs mold, the city brought once-outsourced programs in-house, including community planning, human resources and government technology systems. It still contracts for road paving, park maintenance, permitting and code enforcement. Even those that have backed away from blind faith in privatization still see it as the best way to start a new city. … In Sandy Springs, faith in the model remains unshaken, though it has evolved. … Jason Lary, the mayor of the new city of Stonecrest … [plans] to learn from other municipalities that outsource, and is contracting out city administration, planning and zoning, attorneys and building permitting. The Stonecrest City Council voted Monday to hire CH2M as its primary service provider. … South Fulton is taking the opposite tack. Leaders there want to assume control of the services currently under the county’s umbrella and the employees who provide them. They are negotiating agreements with the county to transfer those departments to South Fulton. …

Related:

Is the ‘Sandy Springs model’ of government changing?
Source: John Ruch, Reporter Newspapers, July 8, 2016

Since its founding in 2005, Sandy Springs has drawn national notice for outsourcing most city government operations to competitively bidding private contractors. But last month, the city approved three-year, no-bid contract extensions due to fears of government disruption during a planning and development boom. The City Council approved the no-bid extensions only after voicing caution about not shifting to an “in-house,” public-sector government. But new local cities inspired by Sandy Springs, like Brookhaven and Dunwoody, already have brought more jobs and departments in-house. … But the model has changed. In 2011, the city dumped CH2M’s single deal to bid out multiple contracts, saying that saved $7 million. …

Georgia city shows pros, cons of going private
Source: Stanley Dunlap, barrowcountynews.com, April 27, 2014

While Barrow County leaders mull privatization, one Georgia city provides an example of both sides of the equation. Milton is one of three Fulton County cities that have undergone privatization in the last decade. The majority of operations in Milton, Sandy Springs and Johns Creek were contracted out when they incorporated in 2006, however two of them have since scaled back privatization in an effort to save money. ….. The majority of operations in Milton, Sandy Springs and Johns Creek were contracted out when they incorporated in 2006, however two of them have since scaled back privatization in an effort to save money. In 2008 the economy led to Milton officials renegotiating their contracts in order to save money. The city now has 144 employees and only contracts out a few departments. “What they figured out was that by ending the contract with CH2M Hill, and going with a more traditional model for most departments, Milton saved $1.2 million in 2010 and another $1 million in 2011,” said Milton Communications Manager Jason Wright. …. If Barrow officials decide to privatize on a large scale, then it would become the first county in Georgia to do so….