Nassau’s financial control board is warning the county not to pay vendors for work done before contracts are approved, weighing in on a controversy that has caused a rift between Republican County Executive Edward Mangano’s administration and GOP county lawmakers. The Nassau Interim Finance Authority last week added language to its contract approval forms that explicitly states its guidelines on vendor payments. It says: “NIFA approves this contract/amendment, but no time charges shall be recognized or paid for services rendered prior to” the agreement’s final execution. NIFA counsel Jeremy Wise said the board took action because Nassau had allowed work to begin on numerous pacts before they’d come before county legislators. The county this month identified 47 such contracts, some dating back eight years. … The county administration for years has allowed some vendors to start work without legislative approval, but the practice began generating consistent complaints from GOP lawmakers only in the last month. … But [county procurement compliance director] Cleary said the problem isn’t unique. New York City, where Cleary worked previously, reported more than 600 retroactive contracts in 2013, records show.
Source: Gillian B. White, The Atlantic, March 9, 2017
… How to Kill a City: Gentrification, Inequality, and the Fight for the Neighborhood, a new book by the journalist Peter Moskowitz, brings some much-needed clarity to thinking about a slippery concept. … Moskowitz tells of how gentrification has swept through some of America’s biggest cities, writing case studies of Detroit, San Francisco, New York, and post-Katrina New Orleans. In each city, there are specific problems and circumstances that helped the process along, but it’s striking how similar the choices made by politicians, business leaders, and developers and their effect on poor really are across the country. … While Moskowitz includes the important stories of those who called a neighborhood home long before coffee shops and luxury condos appeared, it’s his outline of the systemic process of displacement that is the most devastating. He convincingly shows how the choices that a city and its government make in the name of a booming economy assign value to some residents and not others: From choices on where and how to fund affordable housing, to invest in public schools, to support new local businesses, but not old ones, the process that goes by the name “revitalization” is often something more pernicious.
… And despite stable economies, liberal leanings, and high involvement in municipal politics in both New York and San Francisco, policies that could potentially help poorer residents have been much slower to come and less robust than the influx of new private capital that devours neighborhoods and displaces residents. In just about every city Moskowitz examines, he finds that choices by city and state governments limited the creation of affordable housing and changed public-housing policies, giving poorer residents little refuge in increasingly expensive cities. Ultimately, Moskowitz says that a big part of the problem when it comes to the unremitting pace of gentrification is that it is a process that often involves the investments and decisions of the private entities, including developers and big corporations, that decide to set up shop in new neighborhoods. In some ways, that’s great for areas that are floundering, but when city leaders become too reliant on the plans and dollars of the private sector, the people who had been living and working in these neighborhoods all along have no one to look out for them and the lives they’ve built. Private organizations have different interests and responsibilities when it comes to making plans to spruce up a neighborhood. And that can mean that their investments don’t happen an egalitarian manner, or benefit a diverse group of residents. ….
Source: Habitat Magazine, March 1, 2017
In a vote watched closely by opponents of the gentrification now sweeping Brooklyn, shareholders at the 326-unit St. James Towers co-op in Clinton Hill have voted to remain in the affordable Mitchell-Lama program instead of going to market-rate sales. The vote was a victory for Mayor Bill de Blasio, who has vowed to add and protect thousands of affordable housing units in a city that is becoming less affordable by the day. The vote was also a blow against the wave of gentrification that is particularly visible in Brooklyn, Manhattan and parts of Queens. … There are compelling arguments on both sides of the issue. Opponents of privatization, like Cumbo, view it as a threat to a vital, and beleaguered, piece of the city’s housing stock. Proponents of privatization counter that after serving the required time in the Mitchell-Lama program, with its tax breaks and limited resale prices, shareholders are entitled to reap the rewards of the city’s currently hyper-inflated real estate prices. Last week’s vote at St. James Towers was the second in the three-step process of privatization, each of which requires approval by a two-thirds super-majority of shareholders. In the first vote, held in 2014, a sufficient number of shareholders voted to authorize a privatization feasibility study. Last week’s vote was on whether or not to authorize the money to prepare an offering plan. A third vote, which will not be held, would have determined whether the co-op stayed in the Mitchell-Lama program or went to market-rate sales.
Source: Kyle Hughes, Daily Freeman, March 7, 2017
Gov. Andrew Cuomo’s plan to link state aid money to downsizing local government came under sharp criticism Tuesday during a press conference as a “top-down” dictate that doesn’t reflect the fiscal realities facing municipalities. … He and others said the biggest problem is the costs of pensions, employee healthcare and other mandates handed down by the state and shouldered by local taxpayers. CSEA Capital Region President Ron Briggs called Cuomo’s plan a “dangerous scheme” that “undermines local government leadership and erodes vital services taxpayers rely on. It also sets up local governments for failure.” He also said any consolidation or shared services planning should include rank-and-file employees who will be affected by any change. … They spoke at a press conference with state Sen. Kathy Marchione, R-Halfmoon, who is opposing Cuomo’s plan to tie $715 million in funding for municipalities for creation of a government consolidation plan. Under the plan, county governments would draw up merger plans to downsize local governments and put the recommendations up for a vote. … The proposal is part of Cuomo’s $162 billion budget plan for 2017-18 which is on track to be adopted by the end of March. Legislators are expected to make changes in the plan before its final adoption, possibly including a revision of the consolidation proposal. …
Source: Martin Carnoy, Economic Policy Institute, February 28, 2017
Betsy DeVos, the new U.S. secretary of education, is a strong proponent of allowing public education dollars to go to private schools through vouchers, which enable parents to use public school money to enroll their children in private schools, including religious ones. … This report seeks to inform that debate by summarizing the evidence base on vouchers. Studies of voucher programs in several U.S. cities, the states of Florida, Indiana, Louisiana, and in Chile and India, find limited improvements at best in student achievement and school district performance from even large-scale programs. In the few cases in which test scores increased, other factors, namely increased public accountability, not private school competition, seem to be more likely drivers. And high rates of attrition from private schools among voucher users in several studies raises concerns. The second largest and longest-standing U.S. voucher program, in Milwaukee, offers no solid evidence of student gains in either private or public schools. In the only area in which there is evidence of small improvements in voucher schools—in high school graduation and college enrollment rates—there are no data to show whether the gains are the result of schools shedding lower-performing students or engaging in positive practices. Also, high school graduation rates have risen sharply in public schools across the board in the last 10 years, with those increases much larger than the small effect estimated on graduation rates from attending a voucher school.
… The lack of evidence that vouchers significantly improve student achievement (test scores), coupled with the evidence of a modest, at best, impact on educational attainment (graduation rates), suggests that an ideological preference for education markets over equity and public accountability is what is driving the push to expand voucher programs. Ideology is not a compelling enough reason to switch to vouchers, given the risks. These risks include increased school segregation; the loss of a common, secular educational experience; and the possibility that the flow of inexperienced young teachers filling the lower-paying jobs in private schools will dry up once the security and benefits offered to more experienced teachers in public schools disappear. The report suggests that giving every parent and student a great “choice” of educational offerings is better accomplished by supporting and strengthening neighborhood public schools with a menu of proven policies, from early childhood education to after-school and summer programs to improved teacher pre-service training to improved student health and nutrition programs. …
The Port Authority of New York & New Jersey was established in 1921 to create a sustainable, de- politicized way to provide and manage bi-state transportation infrastructure. At the time, the highly centralized, Progressive-Era public authority model was state-of-the-art. Nearly a century later, however, the model’s three key limitations have become evident: politicized decision-making, money-losing facilities, and declining financial viability. … The PA needs more dramatic reform, and understanding why is based on a fundamental fact: Major transportation infrastructure requires ongoing investment: adding capacity as needed, renewing and replacing aging facilities, and keeping pace with the latest technologies. That is simply not possible until the PA abandons its decades-long practice of common-pool funding and extensive cross-subsidies, and moves instead toward infrastructure facilities funded by dedicated revenue streams and facility-specific accountability. The mechanism to do so is long-term public-private partnerships (P3s), which today mobilize hundreds of billions of new capital for infrastructure around the world. …
According to just-leaked documents, Donald Trump’s team has pulled together a national priority list of 50 major infrastructure projects that taxpayers could subsidize through a Wall Street giveaway. On his list are two corporate water supply projects: Poseidon’s expensive, energy-intensive desalination plant and Cadiz’s water bank – both set to privatize water resources and profit from droughts in California. … For a taste of the problems that Trump’s plans could cause, consider the case of Rockland County, New York. In Rockland County, the local arm of French multinational Suez is billing residents and businesses millions of dollars for a desalination plant it never built. Two weeks ago, the state government agency that exists to help consumers mostly blessed this ratepayer rip-off. … Private water companies like Suez have left a trail of broken promises and botched service in cities around the country, from Camden, New Jersey to Atlanta to Gary, Indiana. Cost overruns and safety problems have plagued communities where the companies have been active. …
Trump Attacks the Safety of Our Drinking Water
Source: Mary Grant, Food and Water Watch, January 25, 2017
The Trump administration has declared war on the environment and the safety of our drinking water. His team put together an aggressive action plan for the EPA, stripping away public protections and critical resources. … While gutting these vital water funding programs, Trump’s team is also advancing a proposal to let Wall Street take over our public infrastructure. Trump’s policy advisors have outlined a scheme to give massive tax breaks to Wall Street firms that take over infrastructure projects. It would give Wall Street a tax credit of $0.82 for every $1 of equity invested into a project. This privatization scam will benefit only Wall Street. Widespread privatization of water systems would lead to large rate hikes, loss of local control, loss of transparency and accountability, loss of jobs and deterioration of customer service quality. Water bills would skyrocket to allow Wall Street to profit, leading to unaffordable bills and more water shutoffs. … Trump’s plans amount to a massive windfall for Wall Street, and combined with his proposed cuts, they endanger our public water systems. … On Tuesday, Senate Democrats released their own blueprint to rebuild our country’s infrastructure, calling for $110 billion to update our water and sewer systems. Their blueprint recognizes that communities need real direct assistance and that privatization is the wrong way forward: “Our Blueprint will invest directly in communities because Democrats know that we can’t fix a problem of this magnitude simply by tolling more highways or privatizing water and sewer system that profit on ratepayers.” …
In American Towns, Private Profits From Public Works
Source: DANIELLE IVORY, BEN PROTESS and GRIFF PALMER, New York Times, December 24, 2016
Nicole Adamczyk’s drinking water used to slosh through a snarl of pipes dating from the Coolidge administration — a rusty, rickety symbol of the nation’s failing infrastructure. So, in 2012, this blue-collar port city cut a deal with a Wall Street investment firm to manage its municipal waterworks. Four years later, many of those crusty brown pipes have been replaced by shiny cobalt-blue ones, reflecting a broader infrastructure overhaul in Bayonne. But Ms. Adamczyk’s water and sewer bill has jumped so much that she is thinking about moving out of town. “My reaction was, ‘Oh, so I guess I’m screwed now?’” said Ms. Adamczyk, an accountant and mother of two who received a quarterly bill for almost $500 this year. She’s not alone: Another resident’s bill jumped 5 percent, despite the household’s having used 11 percent less water.
Even as Wall Street deals like the one with Bayonne help financially desperate municipalities to make much-needed repairs, they can come with a hefty price tag — not just to pay for new pipes, but also to help the investors earn a nice return, a New York Times analysis has found. Often, these contracts guarantee a specific amount of revenue, The Times found, which can send water bills soaring. Water rates in Bayonne have risen nearly 28 percent since Kohlberg Kravis Roberts — one of Wall Street’s most storied private equity firms — teamed up with another company to manage the city’s water system, the Times analysis shows. City officials also promised residents a four-year rate freeze that never materialized. In one measure of residents’ distress, people are falling so far behind on their bills that the city is placing more liens against their homes, which can eventually lead to foreclosures. … President-elect Donald J. Trump has made the privatization of public works a centerpiece of his strategy to rebuild America’s airports, bridges, tunnels and roads. Members of his inner circle have sketched out a vision, including billions of dollars of tax credits for private investors willing to tackle big infrastructure projects. And Mr. Trump himself promised in his victory speech “to rebuild our infrastructure, which will become, by the way, second to none.” Private equity firms like K.K.R. have already presented themselves as a willing partner, and Bayonne provides an important case study. Its arrangement is one of a handful of deals across the country in the last few years in which private equity firms have managed public water systems. While these deals are a small corner of private equity’s sprawling interests, they represent the leading edge of the industry’s profound expansion into public services. …
… The Times analyzed three deals in which private equity firms have recently run a community’s water or sewer services through a long-term contract. In all three places — Bayonne, and two cities in California, Rialto and Santa Paula — rates rose more quickly than in comparable towns, which included both publicly and privately run water systems. In Santa Paula, where Alinda Capital Partners controlled the sewer plant, the city more than doubled the rates. A fourth municipality, Middletown, Pa., raised its rates before striking a deal. Now, some of these cities are trying to take back their water. Missoula, Mont., wrested away its water system, which had been owned by the Carlyle Group. Apple Valley, Calif., whose waterworks were also owned by Carlyle, has filed a similar lawsuit. Santa Paula bought its sewer plant from Alinda last year. …
Investing in America’s Public Water Systems — Making Public-private Partnerships Work
Source: Wharton School – University of Pennsylvania, Knowledge@Wharton, May 2015
[editor’s note: Suez Environnement – a private water company – is one of the sponsors behind this report. One of its subsidiaries is United Water]
From the summary:
The U.S. public water system needs a massive, long-deferred investment. Neither the public nor the private sector alone is up to the challenge, but a growing number of public-private partnerships suggest a solution.
U.S. Shifts to Strong Support for Public-private Infrastructure Deals
Source: Knowledge@Wharton, Public Policy, June 10, 2015
….As part of what the Canadian government calls, “the largest and longest infrastructure plan” in the nation’s history, Canada has committed $1.25 billion to a national portfolio of 20 public-private partnerships, seven of which involve water and wastewater infrastructure. But what is noteworthy about the Canadian program is not just the size or scope of its investment but the process it has put in place. …But whether or not the IRS changes its policy, or Congress agrees to any of the president’s new proposals, the bipartisan passage of WRRDA makes it clear the federal government will be stepping up its support for P3s for water and other infrastructure in the years ahead….
Making the Most of Public-private Partnerships
Source: Knowledge@Wharton, Public Policy, June 10, 2015
It may not be common knowledge, but private companies have been helping cities manage public water systems for some time. According to the National Environmental Services Center, a process known as design-bid-build is the traditional method employed by water utilities throughout the U.S. Under this process, a municipality hires an engineering firm to design a water project, puts the project out to bid and chooses a private contractor to build the plant. The local water authority may choose to run the plant itself or hire yet another private firm to operate and maintain it…..
A Tale of Two Public-private Partnership Cities
Source: Knowledge@Wharton, Public Policy, June 10, 2015
….It is indeed early in the relationship among United Water, KKR and the citizens of Bayonne. So far, the rate increase has been an issue locally, but few have complained about inferior service. United Water, for its part, reports fielding positive consumer comments about access to information from the smart water meters it has installed…. In 2013, Rialto entered into a 30-year, $300 million public-private partnership (P3) agreement with Veolia Environnement S.A.’s Veolia Water as the operator of the project. Ullico, a labor-owned insurance and investment company, was the lead finance partner, along with Table Rock Capital. An agreement with labor unions ensured that all existing employees would keep their jobs for at least 36 months. ….
The Faculty Student Association (FSA) announced the commencement of a bidding process that could prematurely end current campus food supplier Sodexo’s five year contract with the University. Stony Brook University students received the announcement via email by new Executive Director of the FSA, Nadeem Siddiqui, on Jan. 9. “Unfortunately, our partner (Sodexo) continued to fall short of expectations as demonstrated by quality assurance reports and customer satisfaction data,” the email said. A quick scroll through the Stony Brook Dining Feedback page shows pictures by students of raw meat in burgers, sandwiches served without buns and strongly worded student complaints. There are a few posts about liking and even commending campus vendors for producing quality food, but the majority of posts are complaints. The decision to hold a new bidding process comes only three years after the university’s last bidding process that ended with leaving their previous dining partner, Lackman, Jason Mazza, former member of Stony Brook Student Voices, said. … Four companies were considered in the last bidding process: Bon Appetit, Sodexo, Aramark and Compass (the company that bought Lackman). Mele said these companies are almost guaranteed to reapply. …
Food workers union reaches contract agreement with Sodexo
Source: Michaela Kilgallen, Stony Brook Statesman, October 4, 2016
After months of bargaining, Sodexo and the union representing Campus Dining workers have reached a contract agreement. The Retail, Wholesale, and Department Store Union Local 1102 ratified the contract at a membership meeting on Sept. 29 after an emergency contract negotiation the day before. … In the contract, workers will receive an 8 percent pay increase. Local 1102 also fought to keep union health insurance as opposed to Sodexo insurance, Brunet said. “The university and the union will continue to work together to ensure the ongoing satisfaction of all members of the Stony Brook University campus community,” Sodexo Director of Operations Support Deborah McMahon said in a letter to The Statesman. …
Contract negotiations stall between Sodexo and food workers union
Source: Michaela Kilgallen, Stony Brook Statesman, September 25, 2016
Stony Brook’s food service provider Sodexo and the workers’ union Local 1102 RWDSU will be entering an emergency contract negotiation on Sept. 28 in a final attempt to come to an agreement before the end of the month. … The two groups met on Sept. 15. at the Student Activities Center, where Sodexo withdrew its demands to move all campus dining employees from union health insurance to Sodexo insurance. Brunet said the premiums and deductibles associated with Sodexo insurance would be too high for many employees to afford on $12.74 per hour wages. … In the current medical system, the provider — in this case Sodexo — gives monthly payments to the Local 1102 Health Fund, which provides employees with health care. The current monthly rate per employee is $871. Although Sodexo is no longer demanding a system change, the food service company is still pushing for lower medical rates. The union was told that they are looking to lower healthcare contributions by $500,000. Sodexo is also seeking 401(k) changes to increase the number of hours per week employees must work to earn retirement benefits. The current number is 20 hours per week, but Sodexo is aiming to increase this number to 30. The union’s concern is that Sodexo would give employees fewer shifts in order to keep them under 30 hours. …
Source: Rome Sentinel, November 28, 2016
Assemblyman Anthony Brindisi is taking the New York State Department of Transportation and other state agencies to task for allegedly outsourcing work on the “I Love NY” signs to a company in Arkansas. Brindisi recently wrote a letter to the DOT asking that they and other state organizations change contract requirements for similar projects, according to an announcment from his office. Brindisi said that he wants to ensure that companies in the state and their workers receive priority when work contracts are awarded. … Media reports state that placards on several dozen ‘I Love NY’ signs that promote Taste NY, The Path Through History and other programs were printed by Interstate Sign Ways of Arkansas. Brindisi said other sign painting was done by Hermosa Corporation in New York Mills and Elderlee, Inc., in Ontario County. “I find it ironic that a company from Arkansas was paid to work on a project helping to promote New York State products,” Brindisi said. …
The international wave of airport privatization deals, which has seen private firms take control of many of the world’s largest airports, has yet to gain traction in the continental United States. Westchester County Airport now stands as the lone passenger facility seeking federal approval to turn over its airport revenue to a private company. A Tax Watch review of these deals around the world found a major difference: Westchester did not seek bids to test the open market before selecting Oaktree Capital Management to run the airport known as HPN. … Westchester County Executive Rob Astorino opted not to test the open market. He began talks with Oaktree in late 2015, with negotiations intensifying over the past three months. Federal regulations have no bidding requirement. Astorino said he felt comfortable with Oaktree because there aren’t many companies that have experience with the Federal Aviation Administration and airport management. … According to county budget documents, the county has received income of about $45 million a year, which includes revenue from a variety of sources. It includes rents from general aviation operators, corporate jet hangers, rental-car companies as well as landing fees from commercial airlines, the $4.50-per passenger fee added onto every ticket on departure flights, and a share of parking garage revenues. That money currently goes into a restricted airport fund to be used exclusively for airport operations. Emmett McCann, a managing director at Oaktree, said the U.S. privatization program, which began under President Bill Clinton, differs from others around the world because the airlines have a say in whether the deal goes through, with 65 percent of the carriers at an airport required to back the deal. Astorino has already lined up major carriers at Westchester to back the deal, including Jet Blue, American and United Airlines. … The Oaktree deal would expand upon Westchester’s partial privatization at the airport, which has had private management dating back to its establishment in the mid-1940s. Westchester now pays AvPORTS about $1 million a year to run the airport operation — on top of paying about $45 million in expenses, including the salaries of AvPORTS employees — from revenues it receives from myriad sources. Under the Oaktree deal, the private equity firm would manage the airport and receive the income stream over the next 40 years — bringing in an estimated $2 billion in today’s dollars. In exchange, Westchester would be able to use the proceeds for the 40-year lease for general county purposes. That’s a boon to an anti-tax crusader like Astorino, who is considering privatizing more county functions to reap non-tax income. …
Fact check: Airport privatization plan
Source: LoHud, November 14, 2016
County Executive Rob Astorino is pushing hard to privatize Westchester County Airport. The move would see Los Angeles-based Oaktree Capital Management take over, in exchange for an up-front payment of $130 million, a portion of which Astorino has included in his 2017 budget. In order to get that money, the Board of Legislators must approve the deal by Dec. 27. That means there’s a lot to unpack in a short period of time. Here, we try and flesh out some statements the county executive made to the Journal News during an editorial board meeting Nov. 3. …
Westchester County in Deal to Privatize White Plains Airport
Source: Andrew Coen, Bond Buyer, November 3, 2016 (Subscription Required)
New York’s Westchester County announced a public-private partnership for its municipal airport in White Plains, N.Y. designed to direct airport revenue to the county budget. County Executive Rob Astorino announced Thursday a 40-year deal to lease Westchester County Airport to Los Angeles-based Oaktree Capital Management for $140 million. The deal calls for Westchester County to receive a $111 million upfront payment from Oaktree, structured to have proceeds applied to the county’s operating budget over the course of the 40-year lease. The structure works like an annuity, a county press release said. Astorino said net revenue would amount to $15 million in the first year and $5 million annually over the following five years. … The P3 deal would come under the Federal Aviation Administration’s Privatization Pilot Program that allows for up to 10 airports to be privatized. Oaktree helped implement the first P3 for a major U.S. territory airport in San Juan, Puerto Rico. According to an FAA website, San Juan is the only privatized airport in the 19-year-old program. The transaction will require the approval of the FAA and the Westchester County Legislature must also approve the lease agreement. …