Tag Archives: Kentucky

Financial advisor recommends against divesting TVA

Source: Robert Varela, Public Power Daily, June 9, 2014

An independent strategic review by an financial advisory firm, Lazard, Frères & Co. LLC, has recommended that the federal government not divest the Tennessee Valley Authority. TVA said it is pleased the report “supports TVA’s financial and operational plan.” The utility engaged Lazard to assist in analyzing financial data for the Obama administration’s strategic review of options for addressing TVA’s financial situation, including the possible divestiture of the utility. The Lazard report “concluded that the business model with TVA’s financial and operational plan is the best current option for the citizens of the [Tennessee] Valley and others,” TVA noted….The high level of complexity associated with a possible divestiture “would likely lead to a costly, multi-year process to execute any such strategy, during which time TVA would experience organizational disruption and which would result in an uncertain outcome,” the report said. The complex network of TVA stakeholders would add to the difficulty of divesting TVA “in a manner that creates value for all parties,” Lazard said. …TVA released the Lazard report on June 4 as part of a mandatory Form 8-K filing with the Securities and Exchange Commission. The 8-K document is available on the TVA website.
Related:
Study findings: TVA should not be sold; analysts reject Obama’s call to privatize utility
Source: Dave Flessner, Chattanooga Times Free Press, June 5, 2014

Selling TVA wouldn’t yield much for American taxpayers, but it could prove costly for Tennessee Valley residents and the region’s economy and environment, according to an outside financial review of America’s biggest government utility. In $1 million study prepared for White House budget planners, Lazard Freres & Co. said if TVA had to earn the financial returns of private utilities, electricity rates would jump by 13 percent. At the same time, dismantling its power and nonpower programs could hurt TVA’s recreation, economic development and environmental programs.

Unions fear a ‘New Deal’ sell-off
Source: Kevin Bogardus, The Hill, March 11, 2014

Labor unions are going on the attack against a proposal buried deep in President Obama’s budget that they charge is a move to privatize the Tennessee Valley Authority …. But while the utility is now self-financing, the government could pocket a hefty profit by selling its stake. Obama proposed studying that option in his last two budgets, angering a trio of major labor unions that have thousands of members at TVA facilities. …… In this year’s budget, the administration said it “continues to believe that reducing or eliminating the federal government’s role in programs such as the TVA, which have achieved their original objectives, can help mitigate risk to taxpayers.” That language was included over the strenuous objections of labor unions, which approved a resolution at the AFL-CIO convention in September urging Washington to reject all efforts to privatize the TVA.

TVA to meet with budget officials over privatization
Source: Eric Snyder, Nashville Business Journal, May 20, 2013

Executives with the Tennessee Valley Authority will meet with officials from President Obama’s administration this week to discuss privatization of the utility, WPLN 90.3 FM reports. It will be the first face-to-face meeting between the groups to discuss a possible sale of TVA since the idea was floated in Obama’s budget proposal earlier this year.

Shocker: Republicans Fight Obama Plan to Privatize the Hugely Popular, Cheap Energy Source of the TVA
Source:Gar Alperovitz, Thomas Hanna, AlterNet, May 19, 2013

US electricity giant rejects privatisation plan
Source: Ed Crooks and Stephanie Kirchgaessner, Financial Times, April 29, 2013
(subscription required)

The head of the Tennessee Valley Authority, the US government-owned electric company and a pillar of Franklin D. Roosevelt’s New Deal, has rejected an Obama administration plan to explore privatisation….But in an interview with the Financial Times, Bill Johnson, who took over as chief executive of the TVA in January, said the authority “isn’t broke” and could fund the investment it needed while staying in the public sector. His comments reflect an upsurge of support, led by typically pro-privatisation Republicans from Tennessee, for retaining government ownership of one of the largest electricity companies in the US…

Politics can obscure history’s reasons
Source: Edward Lotterman, Bismark Tribune, April 28, 2013

If you like irony, the kerfluffle about the Obama administration’s proposal to privatize the Tennessee Valley Authority provides plenty… Stalwart congressional Republicans like Richard Shelby of Alabama and Bob Corker and Lamar Alexander of Tennessee, who are all for small government, free enterprise, and lowering the national debt are decrying this move…

So why are GOP congressmen from the region now all opposed to its sale?

The simplest answer is that under private ownership, without an implicit federal guarantee of its debts and faced with the same requirements to pay state and federal taxes as any other private corporation, electricity rates would go up and TVA employment would go down. That would be politically unpopular. It is a case of “I’m against big government except when big government benefits me and my constituents.” Cynics may say that it also reflects the fact that the guiding principle for the GOP right now is “whatever Obama is for, we are against.”…

The Tennessee Valley Authority: Dammed if you don’t / Barack Obama mulls privatising America’s biggest public utility

Source: Economist, April 27th 2013

Eighty years ago Franklin Roosevelt signed a law creating America’s biggest public utility. The Tennessee Valley Authority (TVA) was charged with delivering cheap hydropower to the rural South, which it did by damming the Tennessee river (see map)…. Privatising the TVA would end the perception of an implicit federal debt guarantee. (A similar implicit guarantee for Fannie Mae and Freddie Mac, the federal mortgage-financiers, ended up costing taxpayers untold billions.) Divestiture would also free the TVA to raise more capital than the $30 billion debt cap allows—though, as the bond spike earlier this month hinted, it would probably pay steeper interest rates….

Role reversal: GOP attacks Obama plan to sell Tennessee Valley Authority, icon of New Deal
Source: Matthew Daly, Associated Press, April 16, 2013

Kentucky Inmate Starved To Death

Source: Brett Barrouquere, Associated Press, April 21, 2014

A prison doctor has been fired and two other staffers are in the midst of being dismissed after an inmate at the Kentucky State Penitentiary starved himself to death, a case that has exposed lapses in medical treatment and in how hunger strikes are handled at the facility. Prison officials have asked prosecutors to investigate after The Associated Press began asking questions about the inmate’s death…. An internal investigation determined that medical personnel failed to provide him medication that may have kept his suicidal thoughts at bay and didn’t take steps to check on him as his condition worsened. The internal review of Embry’s death also exposed broader problems involving the treatment of inmates — including a failure to regularly check inmates on medical rounds and communication lapses among medical staff….The internal investigation found that Hiland and Wilkinson didn’t check on inmates as they should have during routine visits. The report also documented multiple communication problems among medical staff and allegations that other nurses were intimidated by Wilkinson, a contract staffer who works for Nashville, Tenn.-based Correct Care Solutions…. Hiland said the Corrections Department used Embry’s death as an excuse to fire him so that Correct Care Solutions could fill his $164,554-a-year job more cheaply. Since firing Hiland last month, the state has given the Corrections Department’s medical chief, Douglas Crall, direct oversight of medical care at the penitentiary. The state has also hired the company on a one-year contract worth $14.8 million to provide nurses for all 12 of Kentucky’s prisons…..

Private money, public projects: More U.S. states doing deals

Source: Hilary Russ, Reuters, April 14, 2014

Short on funding but big on need, U.S. states and cities are increasingly turning to such deals, known as public-private partnerships, or P3s, hoping to leverage assets that can bring a quick infusion of private dollars to rebuild crumbling infrastructure. … The projects include everything from a light rail system in suburban Washington, D.C., to the replacement of hundreds of bridges in Pennsylvania. In the past, the United States has had an average of one or two public-private partnership deals valued at more than $500 million in the works annually, according to Bank of America Merrill Lynch’s municipal banking group. This year, the bank said, there are 8 to 10 such projects. Thirty-three states allow varying levels of public-private partnerships for transportation projects, according to the National Conference of State Legislatures, up from 23 in 2006. Kentucky lawmakers passed such legislation in late March, but the governor vetoed it on Friday. …

P3 bill advances in Kentucky legislature

Source: Kalliope Gourntis, Infrastructure Investor, April 7, 2014
(subscription required)

Kentucky may soon be counted among the states with legislation that allow the use of public-private partnerships (PPP; P3) for developing and financing major transportation projects after the House and Senate both overwhelmingly approved House Bill 407 and sent it to Governor Steve Beshear for signing. Introduced by State Representative Leslie Combs on February 19, the bill passed with a vote of 82-7 in the House a month later, and passed the Senate by a 27-9 vote on March 27. In addition to allowing local governments to partner with the private sector in financing transportation infrastructure, the bill also calls for the creation of a P3 model system….

Related:
Panel OK’s Allowing Public-Private Partnerships
Source: Associated Press, March 6, 2014

A bill that would allow public-private partnerships for projects has been approved by the House Appropriations and Revenue Committee. The measure, dubbed P-3, has drawn objections from a Kentucky lawmaker who says it would be used to charge tolls to finance a new Ohio River bridge between Cincinnati and Covington. House Bill 407 would allow state and local governments in Kentucky to partner with private sources to finance transportation and public works projects.

Senate panel OKs bill to insulate contractors

Source: Rae Hodge, Associated Press, February 13, 2014

Labor contractors would be protected from some litigation under a bill that cleared a Senate panel Thursday. If passed, the bill would insulate primary contractors from any liability for the illegal practices of their subcontractors. The bill also broadens the legal classification of contractors, allowing more types of employees to fall under the definition. …. Opponents of the bill also included Kentucky State AFL-CIO President Bill Londrigan, who cautioned the committee that removing legal responsibilities from primary contractors would open the door to substandard safety practices at worksites and could deprive subcontractors of legal protection. …

Prison company pays $260K in lawsuit settlement

Source: Associated Press, August 13, 2014

The largest private prison company in America paid $260,000 to a group of shift supervisors in Kentucky to settle claims that they were denied overtime. Corrections Corporation of America, based in Nashville, Tennessee, paid the money last year to end a lawsuit. The former employees took $129,000 of the settlement. Plaintiff’s attorneys received $131,000.
Related:
Details Sought on Private Prison Settlement
Source: Iulia Filip, Courthouse News Service, February 11, 2014

Prison Legal News asked a federal judge to unseal documents supporting a settlement Corrections Corporation of America reached with employees in a lawsuit accusing it of labor laws violations. The nonprofit, which publishes a monthly newspaper, claims it needs the documents to report on the ongoing political dialogue about whether private prison operators hide legal settlement expenses and minimize their costs to get prison contracts. Employees at two prison facilities CCA ran in Kentucky sued the company in May 2012, alleging it violated Kentucky and federal labor laws by misclassifying them and withholding overtime compensation. CCA denied the allegations, but after more former and then-current employees joined the class action, the parties reached a tentative settlement in November 2013. …

Fitch Sees More P3s As Government Funding Dwindles

Source: Jim Watts, Bond Buyer, January 13, 2014
(subscription required)

More public-private partnerships for transportation projects are on the horizon for 2014 due to declines and uncertainties in state and federal funding streams for highways and bridges, Fitch said in a recently released report. Availability payments, which provide annual state subsidies to the private partner rather relying on fee revenues to support debt issued for P3 projects, will probably be considered as state-supported debt, the rating agency said. … Kentucky doesn’t have P3 enabling legislation, but the governor supports the idea, Kim said. A state P3 bill under development in the Kentucky legislature is expected to be considered in the current session that begins this week and end in mid-April. …
Related:
U.S. P3 Funding Activity Likely to Rise
Source: Fitch Wire, January 10, 2014

Fitch Ratings-New York-10 January 2014: U.S. states are likely to pursue public-private partnerships (P3) more frequently in the coming year, Fitch Ratings says. Last week, Kentucky and Ohio submitted a financing plan for the Brent Spence Bridge Project to the Federal Highway Administration that includes a P3 model. This will be Kentucky’s first P3 project, if it is procured. Nevada is also considering a P3 project for the first time with Project Neon. Other states with active P3 programs include Florida, Indiana, Maryland, and Virginia among others….

2013 City of Barbourville Examination Report

Source: Kentucky Auditor of Public Accounts, January 7, 2014

From the press release:
Auditor Adam Edelen on Tuesday released a special examination of the City of Barbourville, finding lax controls that allowed the mayor and others to exert undue influence over financial activities and likely benefit personally. The report, which contains 28 findings and recommendations, will be referred to the Attorney General, Kentucky Department of Revenue and Cabinet for Health and Family Services. The exam was launched last summer upon request by five of the six city council members. …

…Auditors found lax controls and oversight that led to financial mismanagement and abuses. The exam found that a general contractor, plumber and electrician were paid for work that the city street department could perform at little or no additional cost to the city. In 2007 and 2008, a contractor was paid more than $73,000 for work such as painting, tree pruning and mulching. Bids weren’t obtained, written contracts establishing hourly rates or scopes of work were not in place and invoices didn’t itemize the costs and hours worked. …Auditors identified several issues with the Barbourville Brickyard Waves Water Park, which the city leases from Union College. The mayor appears to have a conflict of interest between fulfilling taxpayers’ interest and his private financial interest in securing the position of water park manager for his wife. The mayor should have removed himself from the hiring process but did not. …

Auditors identified abuses elsewhere in city operations:
• Rent payments for space in a city building were suspended for one vendor unnecessarily, resulting in lost revenue to the city.
• The city didn’t receive vending machine revenue for six years despite contracts that stated it would.
• The city didn’t receive all expected revenue from the sale of aluminum to a Lexington recycling company.
• The city didn’t receive revenue from the sale of metal appliances.
• The city didn’t properly advertise for bids for fuel and asphalt expenditures over $20,000 and bid specifications were unnecessarily restrictive for some items, preventing fair competition from potential vendors.
• Work at a Civil War park went to the highest bidder without justification.

The exam also found repair and remodeling work of a city-owned building lacked oversight, potentially costing taxpayers more money. Oversight of fuel purchases and gravel stockpiles also was insufficient. …

Privatization Debate Likely to Resurface in 2014 General Assembly

Source: Stu Johnson WEKU News, December 24, 2013

Kentucky lawmakers are being asked to consider a new proposal for privatizing certain services or projects. It is not new to Kentucky state government. Privatization was used in a significant way to house inmates across the Commonwealth for decades. The state cut its tie to privately run prisons earlier this year. The number of inmates housed in prisons has been on the decline. There were also sexual abuse of inmate allegations and complaints by shift supervisors, allegations denied by the private firm. …One of the most high profile recent examples of privatization is the large student housing project at the University of Kentucky. UK Vice President for Facilities Management Bob Wiseman says borrowing to cover high deferred maintenance costs for existing dorms would have meant a long extended process. The UK administrator says going the private route offered efficiencies of scale, cost, and time. … A legislative initiative in 2014 could move the privatization discussion further along. Bob Gray says it follows a Virginia model where state government and private sector representatives sit down to review proposals….

Major ambulance service shuts down without notice in six states

Source: M. Alex Johnson, Staff Writer, NBC News, December 9, 2013

A private ambulance service that transported more than a half-million patients a year in six states abruptly shut down without explanation, leaving dozens of cities and towns scrambling for medical transportation options this week without a word of warning.

First Med EMS, based in Wilmington, N.C., served hospitals and other medical facilities in more than 70 municipalities in Kentucky, North Carolina, Ohio, South Carolina, Virginia and West Virginia. It operated under the names TransMed, Life Ambulance and MedCorp, boasting in publicity materials: “We take pride in our performance and the safety of our patients. We refuse to compromise on this.”

First Med’s website was inaccessible Tuesday, and calls to corporate offices either reached disconnected lines or weren’t answered. Company workers said in Facebook posts and tweets that they were told the corporation had declared bankruptcy, but no bankruptcy documents were yet on file in U.S. Bankruptcy Court for the Eastern District of North Carolina.

First Med was the largest EMS service in Ohio, where at least 1,500 paramedics and other medical workers were left jobless in Cleveland, Columbus, Dayton, Toledo, Cincinnati, Youngstown and numerous smaller towns.

First Med also provided services in Richmond, Norfolk and Newport News in Virginia, as well as Wilmington, N.C.

Much of First Med’s business was “non-emergent” transportation — such as taking dialysis patients to their weekly treatments and shuttling nursing home patients to doctors’ appointments — and officials in some cities said there should be little impact on patient treatment. …