Tag Archives: North Carolina

Why is a Private Prison Corporation Doing Business with the IRS?

Source: Donald Cohen, Huffington Post, December 8, 2017

… CoreCivic now owns what appear to be its first buildings that have nothing to do with incarceration. In September, the publicly traded corporation that owns and operates prisons, jails, immigration detention centers, and halfway houses bought properties in North Carolina and Georgia that are leased to the Internal Revenue Service (IRS) and Social Security Administration (SSA). In their words, the deals are part of a plan to make “additional investment via acquisition in mission-critical government real estate asset classes outside of our traditional correctional detention residential reentry facilities.” In other words, CoreCivic wants to be a landlord of all types of government buildings. … We shouldn’t be surprised. If you recall, CoreCivic used to be Corrections Corporation of America, which rebranded last October not only to outrun bad PR but also to provide a “wider range of government solutions” and “better the public good.” And several years ago, along with primary competitor GEO Group, they changed their corporate legal status to a real estate company—technically, a Real Estate Investment Trust (REIT)—to score a massive tax break. In 2015 alone, the corporations used their REIT status and other avenues to avoid a combined $113 million in federal income taxes. … But CoreCivic’s latest move highlights the newest private prison trend, towards building, owning, and leasing real estate—and they’re selling it hard. …

Lawmakers request info on NCDOT outsourcing after WBTV investigation

Source: Nick Ochsner, WBTV, March 9, 2017

State lawmakers have requested information from the North Carolina Department of Transportation on the comparative cost to hire private contractors versus using state employees for design and engineering services. The request comes just weeks after a WBTV investigation exposed questions about the increased use of private contractors at NCDOT. Rep. Frank Iler (R-Brunswick) made the request during a meeting of the Joint Committee on Transportation Appropriations in the House of Representatives held Tuesday morning. … In response to the question from Iler, NCDOT Chief Engineer Mike Holder said the department was working on trying to quantify the cost of using state personnel versus outside contractors. … Holder told lawmakers NCDOT has agreed to pay a consulting company to study how much money NCDOT pays in overhead costs for its employees. The focus on overhead comes after WBTV’s investigation published line-item cost estimates from private consulting firms that showed the state was paying between 140% and 200% overhead, in addition to the cost of man-hours and other actual expenses. …

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Senator steers millions in NCDOT contracts while taking campaign cash
Source: Nick Ochsner, WBTV, February 20, 2017

A powerful state lawmaker has pushed to increase the outsourcing of services within the North Carolina Department of Transportation while collecting campaign contributions from private firms that do business with the state agency. NCDOT has increasingly been required to rely on private firms for engineering and design services since 2011. Since then lawmakers have required NCDOT to shed hundreds of workers and pay hundreds-of-millions of dollars to private firms instead. Ten of the largest engineering firms collectively billed taxpayers more than $111 million for services in 2016 alone. That sum does not include dozens of other private companies who were also awarded contracts. Internal documents obtained by WBTV Investigates show the private firms being hired by NCDOT are building in inflated overhead costs and a built-in profit margin into their bottom line. But some lawmakers continue to advocate for the outsourcing of more state highway jobs as a way to save money and build state roads more efficiently.

State Senator Bill Rabon (R-Brunswick) said it was a pretty easy decision to start outsourcing some services at NCDOT when he and other Republicans took the majority in the state legislature in 2011. … But a review of cost estimates for projects completed by private engineering firms suggests taxpayers may be paying a premium for outsourced services. WBTV Investigates obtained detailed cost estimates for several projects submitted to NCDOT by private firms. … It is not clear if projects completed by private firms—with a built-in profit margin and line items for overhead at up to twice the cost of labor—are more efficient than projects completed by state employees who work for NCDOT. … Campaign finance records show Rabon has collected campaign money from employees of private engineering firms and other companies involved in building roads and bridges, their political action committees and industry-related special interest groups. Records show Rabon’s campaign has taken more than $124,000 since 2012, the first year in which NCDOT was required to hit a specific outsourcing target. It is impossible to know for sure, though, exactly how much campaign money Rabon took from individuals connected to private engineering firms because occupation and employer information is incomplete for a large number of donors. … In his interview with WBTV Investigates, Rabon said he did not keep track of who donated to his campaign and insisted his push to privatize NCDOT services was not connected in any way to contributions made to his campaign. … Legislative records show Rabon continued to advocate for aggressive outsourcing at NCDOT during the 2015 and 2016 budget discussions. …

Op-ed: Why we should kick Aramark off campus

Source: Jamie Berger, The Daily Tarheel, October 10, 2016

When I graduated from UNC three years ago, I was proud to have helped build a strong relationship between socially conscious students and Carolina Dining Services. As a representative from the student group FLO (Fair, Local, Organic) Food, I met with CDS, including several employees from Aramark, UNC’s dining service provider, on a regular basis for several semesters. Together, we worked to add healthier, more sustainable food options to the dining halls. Our collaboration also led to the dramatic expansion of the on-campus farmers’ market, which continues to be an enormously popular event. That’s why it saddens me, perhaps more than any other student past or present, to say that I’m now joining a growing movement of students and alumni across the country urging our universities’ administrators to kick Aramark off campus. … Currently, Aramark does not have a single policy in place to protect the chickens in its supply chain. As a result, chickens endure endless agony on Aramark’s supplier farms. Birds on these farms are confined inside filthy, windowless sheds and forced to stand atop accumulated waste that burns their eyes and lungs with ammonia fumes. The barren environment offers them few opportunities to engage in natural behaviors. … An even crueler fate awaits the animals who survive this abuse. At the slaughterhouse, they’re thrown upside down into metal shackles, electrocuted, slit at the throat, and then scalded in hot water. Many birds endure this entire process while still alive and able to feel pain. No animal deserves this torture. Chickens are intelligent and sensitive; they have individual personalities just like dogs and cats. They can learn their names, form close bonds with their family members and human companions, and can even perform simple arithmetic. …

As NC seeks to privatize Medicaid, nonprofit touts cost savings

Source: John Murawski, The News & Observer, September 2, 2016

As federal authorities weigh the North Carolina legislature’s request to privatize Medicaid services here, a Raleigh-based nonprofit that manages 1.6 million Medicaid patients for the state said it continues delivering financial savings and improved health outcomes for patients. The nonprofit organization, Community Care of North Carolina, or CCNC, published its 2015 performance measures in the summer issue of N.C. Medical Journal, the first time that CCNC has publicized its performance in such a fashion. The Journal’s editors requested the submission for a special July/August issue dedicated to the subject of value-based care, an emerging health care trend that seeks to measure quality as it relates to the cost of providing care. … In the medical journal article, CCNC said that in 2015 the state’s Medicaid results are beating expectations. CCNC said total costs were 5 percent below an established benchmark, emergency room visits were 7 percent below, inpatient hospital admissions were 26 percent below, and hospital readmissions were 51 percent below. … Among the 1.6 million patients CCNC manages, the average cost per patient per month last year was $543. That amount has fallen every year since 2010, when the average monthly cost per patient was $597. … The state pays $3.6 billion toward Medicaid for state residents and is a huge chunk of the state’s $22 billion budget. The federal government pays the majority of North Carolina’s $15 billion Medicaid program. That money largely pays for doctors, medicine, hospitals and other related costs. Of the CCNC-managed patients, 53,875 were admitted to hospitals last year. That year there were 3,262 hospital readmissions within 30 days of the original admission, but more than 6,600 readmissions had been expected based on the 2012 performance benchmarks. …

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State proposes privatizing Medicaid
Source: Kent McDonald, Daily Tarheel, March 9, 2016

State officials announced a multi-year draft of a plan to reform North Carolina’s Medicaid program last week, effectively moving it toward privatization. The plan has been in the works since reform legislation was approved in September by the N.C. General Assembly. The N.C. Department of Health and Human Services has helped coordinate and create the draft for the new program, which features a patient-centered approach. …

Providers fret, insurers hail N.C. move to Medicaid managed care
Source: Virgil Dickson, Modern Healthcare, October 6, 2015

North Carolina hospitals and doctors say the state’s push to institute Medicaid managed care will reduce services for the poor and shortchange providers despite the legislation giving them the opportunity to bid on the contracts. Late last month, Republican Gov. Pat McCrory signed legislation enabling changes that will move the state’s $12.7 billion Medicaid program serving 1.9 million residents from fee-for-service payments made directly to providers to capped payments to managed care insurers. … Providers, on the other hand, wanted the state to build on the success of a medical home initiative already in place for some Medicaid beneficiaries. The Community Care of North Carolina initiative organized 14 provider-based community networks, which still use fee-for-service but are paid a monthly per-member fee to coordinate patient care. The model appears to have saved the state money, according to a report from North Carolina’s Office of the State Auditor released in August. Community Care of North Carolina saved the state $312 a year for every non-elderly Medicaid patient from 2003 to 2012, which equates to more than $400 million a year.

Lawmakers ignore their own Medicaid expert
Source: Chris Fitzsimon, The Courier-Tribune, September 28, 2015

Rep. Nelson Dollar, a prominent member of the House Republican leadership and its top budget writer, not only opposed the plan that he correctly said would be putting stockholders ahead of N.C. citizens, he challenged the misleading claims about the current Medicaid system made by the ideologues and special interests who are intent on privatizing it. Dollar pointed out that for all the bluster about the current system being broken and out of control — two characterizations repeated incessantly by the privatizers — Medicaid claims costs have fallen in the last five years even as the program now serves 200,000 more people. Dollar said North Carolina ranks 42nd in the nation in the cost per full-time Medicaid enrollee and the cost per patient has declined in the last four years. …
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Guilford County Schools pay bus drivers to clean buses

Source: Amber Roberts, Fox 8, July 19, 2016

Guilford County Schools is testing out a new program. They’re hiring bus drivers to deep-clean the roughly 750 buses used during the school year. In past years, bus drivers have been responsible for cleaning their own buses and turning them in at the end of the school year. However, Guilford County Schools Transportation Director Jeff Harris has decided to take a new approach to getting the buses thoroughly cleaned. … The school system is spending about $54,000 out of their budget to pay bus drivers and to purchase the equipment needed. Going to a commercial site to get the buses cleaned could cost $300,000, Harris said. This program gives employees the opportunity to work this summer and receive additional income. Workers come in from 7 a.m. until noon to clean. They clean about 100 buses a week. …

NCDOT: Ripple effect of I-77 toll-lanes bill costly, damaging

Source: Erik Spanberg, Charlotte Business Journal, June 13, 2016

Expanding Interstate 77 and canceling the private contract to build toll lanes would cost $800 million — including a $300 million cancellation fee, according to figures disclosed in a letter from the state transportation department to lawmakers. The figure, if accurate, is higher than the $650 million budget to build the 26-mile toll lanes project by private contractor I-77 Mobility Partners. Nick Tennyson, N.C. transportation secretary, sent a letter late last week to the chairs of the state Senate’s transportation committee as part of a campaign to stop a bill that would end the toll lane construction contract with I-77 Mobility Partners. The N.C. House passed the bill by a vote of 81-27 this month. That sent the measure on to the Senate, where two committees — transportation and finance — would have to approve the bill going to the floor for a final vote. … Opponents of the project argue Cintra won’t be able to complete the 50-year contract or repay all of the debt, citing similar toll-lane expansions that wound up in bankruptcy in Indiana and Texas. The state says the Cintra contract provides protection to prevent taxpayers assuming construction debt, an assertion critics say in inaccurate. In addition, opponents argue the toll lanes will do little to relieve congestion and are poorly designed. Backers point to state and regional representatives approving public-private partnerships and toll lanes as a transportation strategy for years leading up to the agreement reached between Cintra and the state in 2014. …

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House Approves Bill To Kill I-77 Tolls
Source: David Boraks, WFAE, June 2, 2016

The state House of Representatives on Thursday approved a bill calling on NCDOT to cancel the I-77 widening project north of Charlotte. The bill now goes to the Senate, where Senate leaders have said they don’t see a need to cancel the project. Gov. Pat McCrory and the DOT have said they’re committed to the $650 million contract with I-77 Mobility Partners, a subsidiary of Spain-based Cintra. The company started grading and other work last November. Bill co-sponsor Charles Jeter of Huntersville says the state has the right to cancel the contract because Cintra failed to disclose lawsuits over similar projects elsewhere.   House Bill 954 passed 81-27. It also would prohibit the state from partnering with a private company on any future toll-lane projects in Mecklenburg and Iredell counties. …

North Carolina Lawmakers Want to Ax State’s First P3
Source: Shelly Sigo, Bond Buyer, May 4, 2016

North Carolina’s first tollway pact with a private developer closed financially a year ago, yet remains so controversial that some want it terminated no matter the cost. Two state lawmakers have filed bills to end the public-private partnership with I-77 Mobility Partners, a move that a state analysis said could cost $300 million or more. North Carolina’s attorney general has opened an inquiry into the P3, whose main backer is Cintra Infraestructuras SA. … Though the deal was inked a year ago, the fate of the $648 million project to add tolled managed lanes to Interstate 77 is shaky despite studies concluding that express lanes would improve severe congestion in the fast-growing Charlotte region. … Under House Bill 950, sponsored by Rep. Tricia Cotham, D-Matthews, the state Department of Transportation would be required to terminate the P3 agreement, and pay damages or monetary penalties from unobligated funds in the agency’s budget. … HB 954, filed by Rep. Charles Jeter, R-Huntersville, also seeks to cancel the agreement. Jeter’s bill appropriates $25,000 from the highway fund to pay legal fees to determine the amount of damages, although it does not designate a funding source to pay any penalty.

NCDOT taking steps to ‘reassess’ Cintra contract after TX road bankruptcy
Source: Nick Ochsner, WSMV, March 2, 2016

The North Carolina Department of Transportation said it is reassessing its contract with the company contracted to build toll lanes along I-77 after another road the company operates declared bankruptcy. A subsidiary of Cintra, the Spanish-owned company that holds the I-77 contract, declared bankruptcy today on a road it operates in Texas. … This is the second road operated by a Cintra subsidiary to declare bankruptcy in the past 18 months. In a short press release announcing McCrory’s decision, NCDOT underscored Cintra’s business model, which lawmakers in other states have warned against. …

Public-private partnership in N.C. to add toll lanes to fastest growing area in U.S.
Source: Peter J. Gallanis, Transportation and Infrastructure Daily, July 20, 2015

I-77 Mobility Partners achieved financial closure for the construction and operations of the North Carolina I-77 Express Lanes project that represents a significant milestone in the redevelopment and expansion of a critical business corridor in the Charlotte region. The $648 million project will extend 26 miles from the I-77 connection with I-277 in Charlotte to just north of Exit 36 in Mooresville. The express lanes are dedicated travel lanes that will run adjacent to the existing general-purpose lanes on I-77. Two express lanes will run on I-77 in each direction between Charlotte and Exit 28 in Cornelius. One express lane in either direction will run from Exit 28 to Exit 36. Motorists will have a choice to use the express lanes, the general-purpose lanes or a combination of both to allow for a more efficient drive. The “pay to use” concept, and the public-private partnership being used by North Carolina for this project is becoming popular as states attempt to make up for a lack of funding from the Highway Trust Fund, due to expire at the end of July…One-hundred eighty-nine million for the project comes from a Federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan; $100 million in Private Activity Bonds (PABS); $248 million in private equity from investment partners; and $95 million in public funds from the North Carolina DOT.

Fix For VA Health Snarls Veterans And Doctors In New Bureaucracy

Source: Quil Lawrence, Eric Whitney, and Michael Tomsic, Kaiser Health News, May 16, 2016

Veterans are still waiting to see a doctor. Two years ago, vets were waiting a long time for care at Veterans Affairs clinics. At one facility in Phoenix, for example, veterans waited on average 115 days for an appointment. … Congress and the VA came up with a fix: Veterans Choice, a $10 billion program. Veterans received a card that was supposed to allow them to see a non-VA doctor if they were either more than 40 miles away from a VA facility or they were going to have to wait longer than 30 days for a VA provider to see them. The problem was, Congress gave them only 90 days to set up the system. Facing that deadline, the VA turned to two private companies to administer the program — helping veterans get an appointment with a doctor and then working with the VA to pay that doctor. … Wait times have gotten worse. Compared to this time last year, there are 70,000 more appointments where it took vets at least a month to be seen, according to the VA’s own audit. …

… This is playing out in a big way in Montana. That state has more veterans per capita than any state besides Alaska. … Hospitals, clinics and doctors across the country have complained about not getting paid, or only paid very slowly. Some have just stopped taking Veterans Choice patients altogether, and Montana’s largest health care network, Billings Clinic, doesn’t accept any VA Choice patients. … The delays have become a frustration within the VA, too. Tymalyn James is a nurse care manager at the VA clinic in Wilmington, North Carolina. She said Choice has made the original problem worse. When she and her colleagues are swamped and refer someone outside the VA, it’s supposed to help the veteran get care more quickly. But James said the opposite is happening. …

The Daily Grind could be affected by Student Stores privatization

Source: Cailyn Derickson, Daily Tarheel, February 5, 2016

On Jan. 11, UNC released a request for proposal, known as an RFP, inviting outside companies to propose to privately manage Student Stores — and the Pit coffee shop is referenced in the document. Brad Ives, associate vice chancellor for campus enterprises, said The Daily Grind is mentioned in the RFP because it is a privately owned company that has an existing contract with the University. … In September, Matt Fajack, vice chancellor for finance and administration, said if the proposal from one company, Follett, to privatize Student Stores went through, The Daily Grind wouldn’t be affected. …

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UNC student store could be outsourced to private national company
Source: WRAL, November 30, 2015

A proposed new deal at UNC-Chapel Hill would cost nearly 50 state employees their benefits and possibly their jobs. UNC is considering outsourcing the student book store on campus, but employees and students said the deal is concerning. … If a company takes over, 45 full-time employees would lose their benefits. Paul Cardillo said the book store does not cost tax payers a dime. “All of our salaries are paid out of store revenues and all of our benefits are paid out of university fees that we pay to the university from store revenues,” he said. Anything left over goes toward education. … As part of the deal, Follett would pay UNC an annual commission of at least $3 million and then put $2.5 million toward renovations and $200,000 toward marketing each year.

UNC Student Stores might be privatized
Source: Sofia Edelman, The Daily Tarheel, September 17, 2015

Two months ago, Follett, a company that owns more than a thousand student stores nationwide, submitted a proposal to lease the traditionally University-owned store, said Matthew Fajack, vice chancellor for finance and administration. … If Follett leases Student Stores, the company could pay a $3 million annual commission to the University, invest up to $2.5 million in renovations and attempt to decrease textbook costs by several million dollars, according to a proposal submitted by the company. … Longtime employees who depend on Student Stores for their retirement funds will also be in danger of unemployment. Fajack told employees about the offer at a Wednesday meeting. … Fajack said if this proposal goes through, the Daily Grind Espresso Cafe, post office and soon-to-open pharmacy in Student Stores would not be affected because they are already privatized to a degree. Bull’s Head Bookshop, however, would be affected.

Contract with McCrory donor won’t be renewed as NC weighs privatization

Source: Beau Minnick, WNCN, November 19, 2015

Some controversial prison maintenance contracts will expire and not be renewed at the end of the year, according to North Carolina officials. The contracts are with a Charlotte company whose chairman is a campaign donor for Gov. Pat McCrory. … The maintenance will be done by the Department of Public Safety, officials said. But many are still asking questions about the circumstances surrounding how state leaders extended the contracts with The Keith Corporation of Charlotte back in 2014. Gov. Pat McCrory pushed for a meeting with Graeme Keith, the company chairman, and key state officials. The meeting was held in Charlotte in the fall of 2014. Documents obtained by WNCN show that at the meeting, Keith said he wanted to get some benefit from his giving to candidates. … Perry expressed security concerns about privatizing maintenance at state prisons. Those concerns were echoed by the State Employees Association of North Carolina, who represents correction workers. … The State Employees Association is voicing concerns about whether there will be a movement toward wholesale privatization in the future.

Law Enforcement Investigations and Actions Regarding For-Profit Colleges

Source: David Halperin, Republic Report, Updated October 9, 2015

This is a list of pending and recent significant federal and state law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense.  It does not include investigations or disciplinary actions by state education oversight boards.  It also does not include lawsuits prosecuted only by private parties — students, staff, etc. To date, 37 state attorneys general are participating in a joint working group examining for-profit colleges, according to the office of Kentucky Attorney General Jack Conway. Many of those are actively investigating specific for-profit colleges in their states.