Category Archives: Transportation

Public Private Partnerships (P3s) in Transportation

Source: William J. Mallett, Congressional Research Service, November 2, 2017

Public private partnerships (P3s) in transportation are contractual relationships typically between a state or local government, who are the owners of most transportation infrastructure, and a private company. P3s provide a mechanism for greater private-sector participation in all phases of the development, operation, and financing of transportation projects. Although there are many different forms P3s can take, this report focuses on the two types of agreements that generate the most interest and discussion: (1) design-build-finance-operate-maintain (DBFOM); and (2) longterm lease. …

Read full report.

County services for disabled moving to private providers

Source: Rita Price, Columbus Dispatch, October 30, 2017
 
Federal rule changes about case management and Medicaid payments are forcing county disabilities boards throughout the state to privatize and outsource many of their remaining programs. The Centers for Medicare and Medicaid Services has mandated “conflict-free case management” by 2024 in Ohio, which means counties cannot be both the coordinator and the provider of services paid with Medicaid waiver funds.  But county boards still must pay for services and put up the local share of the Medicaid match — in Franklin County, more than $60 million a year for adult waiver services. Medicaid waivers provide money for community-based services so that people don’t have to be in an institution to get the care and programs they need. … Some 300 members of the county’s adult-services staff are to become ARC Industries employees in January 2019. … ARC is the disabilities program that provides job training, workshop employment, transportation and other services. Although ARC already was a nonprofit employer for people with disabilities, the workshops and programs have been staffed by county employees. Early childhood and school programs can continue to be operated by the board because they’re not funded through Medicaid waivers. … Initially, Morison said, the board’s costs might increase as a new infrastructure is established. He expects it to even out in coming years. …

Ige applauds work in progress at rental car hub

Source: Brian Perry, Maui News, October 6, 2017
 
The governor also expressed support for a Senate bill — now pending before state lawmakers — that would create the Hawaii Airport Corp. as an entity to consolidate the ownership, control and management of the state’s airport system. It would take that responsibility from the state’s Transportation Department, although that department would be administratively attached to the corporation. Senate Bill 658 advanced to a conference committee this year, but lawmakers were unable to achieve final passage of the measure supported by the Department of Transportation. Next year, legislators may pick up where they left off .Referring to the Kahului rental car facility’s construction, Ige said Transportation Department Director Ford Fuchigami and his team “have done a terrific job in moving the project forward, but we are pursuing the airport authority because we believe even with the work that has been done we can do better.” … Funds for construction of the consolidated rental car facility come from a pool of money generated by customers who pay $4.50 a day to rent vehicles in Hawaii. Funds for the airport corporation would come from fees paid by airlines and other airport vendors.Hawaii Government Employees Association Executive Director Randy Perreira submitted testimony opposed to the bill. …  “The bill advances the notion that such a corporation addresses delayed decision-making and inefficiency resulting from multiple agencies involved in the planning, development and operation of Hawaii’s airport infrastructure,” Perreira said. “We assert that multiple agencies, each with their own area of responsibility, are rightly involved to collectively protect the public interest.”

Related:

Effort to establish airports corporation advances
Source: Ivy Ashe, Hawaii Tribune Herald, March 24, 2017

Another attempt to consolidate management and planning for Hawaii’s airports is making its way through the state House of Representatives.  The measure was first brought to the Senate last year by the late Hawaii Island Sen. Gilbert Kahele. That legislation died during conferencing.  This year’s bill, Senate Bill 658, was introduced by Sen. Lorraine Inouye, D-Hilo, Hamakua, Kohala, Waimea, Waikoloa, Kona, and would establish a Hawaii airport corporation comprised of a governor-appointed board of directors. … The measure has been opposed by labor groups such as the Hawaii Government Employees Association. In written testimony during Senate hearings, executive director Randy Perreira stated having multiple agencies involved in airport management was a way to “collectively protect the public interest.”  “The public benefits from the involvement of the Department of Health with respect to addressing environmental concerns, the Board of Land and Natural Resources with respect to protecting public lands and the Department of Human Resources Development with respect to enforcing the civil service law to render impartial service to the public,” he wrote. …

Lawmakers, union leaders want MBTA privatization reigned in

Source: Metro, October 3, 2017
 
The MBTA privatization debate may change course after lawmakers urged their colleagues Monday to start rolling back the privatization powers they granted the T after the disastrous 2015 winter.  After winter storms suspended the MBTA’s train service more than once, lawmakers gave Gov. Charlie Baker three years to fix the T without the constraints of the Taxpayer’s Protection Act, called the Pacheco law. That law requires private contractors to prove cost savings and no service reduction before any state service can be outsourced.  Since the law’s suspension, the MTA has outsourced cash handling and equipment management operations and is considering privatizing bus maintenance at three garages. …

Related:

Quincy officials to speak against privatization of Quincy T facility
Source: Sean Philip Cotter, The Patriot Ledger, September 22, 2017

As the prospect of privatizing services at the MBTA maintenance garage in Quincy approaches, two Quincy officials plan to speak in a state Senate hearing against the prospect. State Sen. John Keenan and state Rep. Tackey Chan will speak Oct. 4 before a hearing of the Senate Committee on Post Audit and Oversight, letting their concerns about privatizing the operations of Quincy’s and similar garages. The T’s request for proposals for contractors to take over up to three garage’s operations are due on Wednesday. If the T wishes, the contractors could begin operations around the start of the new year, according to the request for proposals the agency issued in July. …

MBTA union blasts Baker’s privatization plan
Source: Christian M. Wade, Gloucester Times, August 14, 2017
 
Union workers at the MBTA are pushing back against Gov. Charlie Baker’s plans to privatize bus maintenance, saying it will cost jobs and compromise safety.  Hundreds of workers rallied Thursday outside the MBTA’s Lynn garage, where they blasted Baker’s support for hiring private companies to take over bus maintenance.  “Gov. Baker has chosen to gamble with the taxpayers, the safety of riders and the livelihoods of these hardworking men and women,” said Michael Vartabedian, who heads the International Association of Machinists Local 264, a union representing 120 MBTA bus maintenance machinists. “We won’t let core public services like MBTA bus maintenance be dismantled and destroyed.” …

Continue reading

KC Council picks Edgemoor team for KCI terminal job

Source: Rob Roberts, Kansas City Business Journal, September 21, 2017

A joint meeting of two Kansas City Council committees voted Thursday in favor of selecting a team led by Edgemoor Infrastructure & Real Estate LLC to design, develop and arrange financing for a new airport terminal. … The committee’s decision comes after heavy lobbying and criticism by two other teams pursuing the roughly $1 billion project. … The airport ordinance calls for the city manager to begin negotiating a memorandum of understanding with Edgemoor. At the request of Councilman Jermaine Reed, it also spells out components of a community benefits agreement that must be part of the MOU, requires Edgemoor to institute a local hiring preference and requires negotiation of minority- and women-owned business and workforce participation goals that recognize “the transformative possibilities for disadvantaged businesses and workers that can result from a public infrastructure project of the magnitude of the proposed terminal modernization project.” …

Federal Labor Lawsuit Accuses LAZ of Failing to Pay Overtime

Source: Robert Storace, The Connecticut Law Tribune, September 15, 2017

A Georgia man has filed a prospective collective action lawsuit claiming Connecticut-based LAZ Parking company violated federal labor laws when it failed to pay for overtime. The federal lawsuit filed Wednesday in U.S. district court claims Hartford-based LAZ Parking regularly does not pay assistant managers overtime in violation of the Fair Labor Standards Act. …

… The company has been the target of several lawsuits including at least one class action. Most recently, LAZ agreed to pay $5.6 million to settle a lawsuit with the Massachusetts Bay Transportation Authority. LAZ was accused of failing to detect and stop the theft of millions of dollars in cash belonging to the MBTA. Separately, the parking company agreed to pay $1.1 million to Massachusetts to settle allegations it failed to implement contractually-required revenue controls and auditing tools at 13 MBTA parking lots. LAZ is also a defendant in a February 2017 class action claiming the ParkChicago app resulted in false parking tickets. That suit is still pending. And, in 2010, LAZ paid $46,000 to settle a U.S. Equal Employment Opportunity Commission religious discrimination lawsuit. …

Labor Unions, Civil Rights, Progressive Groups Unite To Oppose ATC Privatization

Source: Aero News Network, September 13, 2017
 
The Professional Aviation Safety Specialists (PASS), AFL-CIO, along with 36 other unions, civil rights groups and progressive associations representing thousands of employees across the country, united to send a strongly-worded letter to lawmakers on Capitol Hill late last week opposing any efforts to privatize the U.S. air traffic control system. In addition to PASS, the letter was signed by the NAACP, the American Federation of Government Employees (AFGE), American Federation of State, County & Municipal Employees (AFSCME), American Federation of Teachers (AFT), Service Employees International Union (SEIU), United Steelworkers (USW), the Leadership Conference on Civil and Human Rights and many more. …

Related:

Trump’s Dire Air-Traffic Claim Contradicted by Government Report
Source: Alan Levin, Bloomberg, September 7, 2017

Efforts to upgrade the U.S. air-traffic system are on budget and steadily improving flight efficiency, a government watchdog found, contradicting assertions by President Donald Trump and airline executives. Just as the House is set to debate a bill that would separate the air-traffic system from the Federal Aviation Administration, a Government Accountability Office report requested by lawmakers shows that the existing system is performing well, undercutting one of the chief arguments by proponents of the change. …

Read full report.

Unions representing air traffic controllers, flight attendants support House bill to reauthorize FAA
Source: Kim Riley, Transportation Today, August 29, 2017
 
Two of Capitol Hill’s prominent aviation-related labor unions have found more than one thing to support in the House proposal that aims to reauthorize the Federal Aviation Administration (FAA).  Specifically, one of the main thrusts of the 21st Century AIRR (Aviation Innovation, Reform, and Reauthorization) Act, H.R. 2997, would be to transfer air traffic control (ATC) operations currently overseen by the FAA into a private, separate, not-for-profit corporation. The bill also would reauthorize FAA funding and other programs. …

Continue reading

Construction of long-awaited Purple Line begins in Prince George’s

Source: Sara Gilgore, Washington Busines Journal, August 28, 2017
 
The latest investment in the 16.2-mile, $5.6 billion project is a $900 million infusion of federal dollars, including the $325 million already appropriated for the project — funding the Trump administration had proposed cutting but saved partly because the public-private partnership building the Purple Line could serve as a model for other U.S. transit systems. The Purple Line P3, to be funded by the federal, state and local governments and the private sector, is the largest in the country’s history.  The system’s construction alone will mean thousands of jobs for the state — more than 6,000 construction positions and more than 400 ongoing jobs — and is expected to generate millions of dollars in economic development. …

Related:

MD: ARTBA: Purple Line legal woes seen as bad precedent for transportation P3s
Jim Watts, Bond Buyer, August 25, 2017 (subscription required)
 
A year-long legal delay in Maryland’s $5.6 billion Purple Line light rail system being financed as a public-private partnership poses risks for the future of similar transportation P3 projects, the American Road & Transportation Builders Association said in a brief filed with a federal appeals court. In its friend-of-the-court brief, ARTBA contends that federal Judge Richard Leon of the District Court for the District of Columbia misapplied the National Environmental Policy Act (NEPA) when he revoked the project’s environmental permits, stopping work on the project.  “Unless reversed, this precedent will have adverse consequences for complex transportation and related infrastructure projects across the country.” ARTBA said. “The district court’s holding injects new delay and litigation risks, thereby stifling the growth of this key financing mechanism to leverage and combine governmental and private dollars and responsibilities to meet the nation’s exigent transportation needs.” …

Purple Line P3 back on track for $900 million federal transit grant
Source: Jim Watts, Bond Buyer, August 22, 2017 (subscription required)

Maryland and federal officials will sign a federal funding agreement next week for a promised $900 million federal grant to help fund the construction of the $5.6 billion Purple Line light rail system being financed as a public-private partnership. The Purple Line would connect with the Washington Area Mass Transit Authority’s Metrorail system and Amtrak at several points on its 16-mile route through the Maryland suburbs of Washington, D.C. A spokesman for Maryland Gov. Larry Hogan said late Monday that the Transportation Department agreed to move ahead on the grant following “very productive, high-level conversations” between Hogan and Transportation Secretary Elaine Chao. …

Continue reading

FAA airport privatization program grounded by financing concerns

Source: Jim Watts, Bond Buyer, August 24, 2017 (subscription required)
 
A 20-year-old federal pilot program of airport privatization has found few takers because of restrictions on how the Federal Aviation Administration allows private operators to fund related infrastructure projects, the Congressional Research Service said. A CRS report, released earlier this month, points to challenges that may lie ahead for the Trump administration, which says it is preparing a 10-year, $1 trillion plan that will focus on leveraging private investments in infrastructure through public-private partnerships.  The CRS focused on the FAA’s Airport Privatization Pilot Program (APPP), created by Congress in 1996 to increase airports’ access to private capital for infrastructure projects. Only two airports have been privatized since the law was enacted, and one of them, Stewart International Airport in Newburgh, N.Y., reverted back to public ownership after seven years in private hands. …

Read full report.

Related:

Airport Privatization: Limited Interest despite FAA’s Pilot Program
Source: U.S. Government Accountability Office (GAO), GAO-15-42, Published: November 19, 2014

From the summary:
Since the FAA started to accept applications to the Airport Privatization Pilot Program (APPP) in 1997, 10 airports have applied to the pilot program (see figure). Of these 10, 2 were privatized, 7 did not complete the program, and one application is currently under FAA review. Public-sector airport owners’ objectives for full privatization varied, but the overriding reason cited was financial benefit. The 7 applicants that withdrew did so for varied reasons, such as changes in market conditions that reduced expected privatization benefits.

Several factors reduce both public and private sector interest in airport privatization in the U.S.—such as higher financing costs for privatized airports and the possible lack of state and local property tax exemptions. Also, while the APPP reduces some of the challenges to privatization that we identified in 1996, privatization still requires considerable time and cost to navigate. Furthermore, public sector airport owners have found ways to gain some of the potential benefits of privatization without ceding control under full privatization, such as entering airport management contracts and joint development agreements for managing and building an airport terminal.

The potential effects of airport privatization on airport efficiency, the federal aviation trust fund, federal tax revenues, and airport employees and concessionaires are difficult to determine. Privatization’s impact on these areas depends on many different factors such as how each airport privatization is structured, making it difficult to estimate the overall impact.

Different airport ownership and financing structures and motivations have driven more extensive overseas privatization efforts, as at least 450 airports around the world have been privatized to some degree. Stakeholders mentioned a variety of lessons learned from the U.S. and international experience, including ensuring public-sector due diligence, involving all stakeholders and creating a transparent privatization process. Stakeholders also provided a range of suggestions for modifying the APPP, from increasing the clarity of the program’s rules to reducing the federal role in airport privatizations.

Opinion: Judge orders O’Hare contractor to rehire workers who led strike

Source: Mark Brown, Chicago Sun-Times, August 23, 2017

Barnett and Subijano were abruptly fired from their jobs as private security guards at O’Hare Airport on April 13, 2016. Two weeks earlier they had joined other low-wage airport workers in a well-publicized, one-day unfair labor practice strike at O’Hare organized by the Service Employees International Union. The women’s employer, Universal Security Inc., contends it fired them because they made statements to the news media revealing “sensitive security information” about airport operations. That was always nonsense. They were fired because they had the nerve to publicly speak up about why they wanted to join a union, which included criticism of their limited training. …