Tag Archives: District of Columbia

Fraud on Wheels: D.C.’s Privatized Paratransit Service

Source: Jeremy Mohler, Capital & Main, July 15, 2016

Transportation is the backbone of a thriving and sustainable economy. Therefore, a public transit system should be judged by how it treats those that need it most, especially people with disabilities and our most marginalized communities. The question we should ask is this: Can everyone get where they need to go — to their job, school or the grocery store? If they can’t, then handing over control of public transit to the lowest bidder should be out of the question— for example, a private company, aiming to profit, doesn’t share this public purpose. … News broke last week that a private company transporting people with disabilities in Washington, D.C., billed the government for almost $200,000 in services it never provided. The paratransit contractor, MV Transportation, which even billed for transporting people who had long since died, chalked the fraud up to “billing errors.”  But MV Transportation’s issues are typical of a contractor cutting corners to increase profits. Is it a “billing error” when some paratransit drivers in D.C., because they are paid so little by contractors, have to rely on public assistance to keep afloat? … In the era of “smaller government,” every dollar counts. Just this week, a popular feature of D.C.’s paratransit service was dramatically cut back because of funding issues. As we detailed in In the Public Interest’s latest report, Cutting Corners, contractors regularly harm the public, workers and the environment in pursuit of profit. Across a variety of public goods and services, and at every level of American government, companies put their bottom lines above the public purpose of providing middle-class jobs and quality services to everyone. …


Investigators say MetroAccess contractor billed agency for picking up customers who had died
Source: Luz Lazo, Washington Post, July 6, 2016

A Metro contractor billed the transit agency for MetroAccess services it did not provide– including transporting customers who had died, according to a settlement announced Wednesday. In a lawsuit filed in February 2013 and settled in May of this year, MV Transportation also was accused of charging Metro for the use of wheelchair-accessible vehicles on trips taken by customers who did not need wheelchairs.  The rate for trips that require wheelchair-accessible service is $65, nearly twice as much as non-wheelchair trips. MV Transportation agreed to pay $184,000 for the “billing errors” but it did not admit to any wrongdoing, company spokeswoman Nikki Frenney-Wiggins said in a statement. … Officials on Wednesday announced they had reached the settlement agreement, resolving the claims that the contractor falsely billed Metro between Jan. 1, 2005 and Dec. 31, 2013. During that time, Metro paid MV about $168 million for providing paratransit services in D.C., Maryland and Virginia, according to the company. …

MetroAccess Workers Protest Private Contractor
Source: Metro Washington Council, AFL-CIO, July 22, 2015

…According to the Amalgamated Transit Union (ATU), which represents more than 400 Transdev employees at this location, the company pays poverty wages, starting as low as $13.14 per hour. This sort of low-paying work combined with Transdev’s other inhumane demands, the union says, creates a toxic workplace with high turnover, resulting in poorer service for riders.


Source: Jessica Hathaway, NCSL, July 12, 2016

Social Impact Bonds (SIBs), a type of pay-for-success funding agreement, are a private financing mechanism used to fund social programs. SIBs are gaining interest from policymakers at all levels of government as a way to mitigate the simultaneous demands of tight budgets and rising social service costs. To date, state level SIB activity has centered on legislative efforts to authorize the process, create study committees, begin pilot projects, engage in feasibility studies and learn which types of programs this financing tool can be effectively used for. …

Use of Social Impact Bonds at the State Level

At least 24 states and the District of Columbia have considered, are considering or are implementing SIB related projects. Of these, 11 states—Alaska, California, Colorado, Idaho, Maine, Maryland, Massachusetts, New Jersey, Oklahoma, Texas, and Utah —and the District of Columbia have enacted legislation. Legislative introductions and enactments range from establishing study committees to creating funds and supporting pilot projects. Enacted legislative actions are listed below. …

See list of enacted Social Impact Bond bills.

Amid Building Boom, Debate over Publicly Funded Stadiums Goes On

Source: Elaine S. Povich, Pew Charitable Trust, July 11, 2016

Missouri and St. Louis tried mightily to keep the NFL Rams from decamping for Los Angeles, offering $400 million in state and city money for a new stadium. To justify the public expense, officials argued that the team, which moved from Los Angeles to St. Louis two decades ago, was an economic engine for the region. They offered to put up the money even though the Rams’ billionaire owner, Stan Kroenke, could afford to build a new stadium on his own. … Two other NFL teams, the San Diego Chargers and the Oakland Raiders, also are eyeing a move to the nation’s second largest city. But Nevada is hoping to grab the Raiders for itself, by dangling a $1.4 billion stadium that would be paid for, at least in part, by the taxpayers. Meanwhile in Atlanta, construction is underway on a new $950 million stadium for the NFL Falcons, to be financed partly through bonds secured by extending a tax on hotel and motel rooms. Amid all the jockeying, a decadeslong debate rages on: Does it make economic sense for cities and states to use public money to build sports facilities? …

… But many economists maintain that states and cities that help pay for new stadiums and arenas rarely get their money’s worth. Teams tout new jobs created by the arenas but construction jobs are temporary, and ushers and concession workers work far less than 40 hours a week.  Furthermore, when local and state governments agree to pony up money for stadiums, taxpayers are on the hook for years — sometimes even after the team leaves town. St. Louis, for example, is still paying $6 million a year on debt from building the Edward Jones Dome, the old home of the Rams that opened in 1995, despite the team’s move to California. The debt is financed by a hotel tax and taxes on “game day” revenues like concessions and parking. …


New stadiums cost more than just money
Source: Yousef Baig, The Weekly Calistogan, July 29, 2015

…The first place to start is with the financing. A few years ago, a Harvard urban planning professor named Judith Grant Long put out a book called “Public/Private Partnerships for Major League Sports Facilities” that shed some light onto what these deals really cost taxpayers and the subsequent spillover effect into other areas. … The average public/private partnership has the cities forking over 78 percent of the costs, and the teams themselves just 22 percent. Additionally, she added, taxpayers spent about $10 billion more than originally estimated on the construction of all 121 stadiums that were in use during 2010. Ownership groups (made up of billionaires) tell city officials that they can’t afford the hundreds of millions of dollars required to erect these modern coliseums. They talk about the boon it will bring to the surrounding area, the increase in tourism, and the creation of jobs, while in the same breath, threatening to leave for another city if they don’t oblige. …

Hamilton County, which took on stadiums for both the Cincinnati Bengals and Cincinnati Reds in the mid-1990s, has been crippled with debt ever since. In 2013 alone, annual stadium expenses totaled $43 million. Since these two stadiums were built, a public hospital was sold, mass transit investments were put off, and the tiny amount of private development along the Ohio River, which was a big selling point to get an increase in sales tax approved, has still required additional public subsidies. …
To afford the $720 million required to build Indianapolis’ Lucas Oil Stadium, the city raised hotel, restaurant and rental car tax rates. Five months after it opened in 2008, a first-year deficit of $25 million was projected to jump to $45 million a year later. In June 2013, the city of Detroit, amid a financial crisis and filing for bankruptcy, stayed the course with its $444 million hockey arena for the Red Wings. A $450 million bond with a 30-year term fit the average arrangement mentioned in Long’s book, leaving taxpayers responsible for $283 million of it. …

John Oliver: How Sports Teams Are Ripping Us Off
Source: Marlow Stern, Daily Beast, July 12, 2015

After a week off, John Oliver and his award-worthy HBO program Last Week Tonight are back, and this time, they’re targeting one of America’s favorite pastimes: pro sports….. “The vast majority of stadiums are made using public money,” said Oliver, citing a report from 2012 stating there’s been “$12 billion spent on the 51 new facilities opened between 2000 and 2010.” “Which begs the question: Why?” he asked…… But the theory that building a new stadium boosts a city’s economy is, according to an economic study cited by Oliver, a total myth. “A major review of almost 20 years of studies shows economists could find no substantial evidence that stadiums had increased jobs, incomes, or tax revenues,” he said….Recently, Hamilton County, Ohio, spent more than $50 million on stadium debt service and other costs in 2014 for the Cincinnati Bengals and Reds, even though the county has had to sell a public hospital, cut 1,700 jobs, and delay payments for schools because of budget gaps.

Source: Last Week Tonight with John Oliver, July 12, 2015

Cities spend massive amounts of public money on privately-owned stadiums. Cities issue tax-exempt municipal bonds that — wait, don’t fall asleep!

Public-Private Partnerships for Major League Sports Facilities
Source: Judith Grant Long, Routledge, ISBN-13: 978-0415806930, 2012
(purchase required)

This volume takes readers inside the high-stakes game of public-private partnerships for major league sports facilities, explaining why some cities made better deals than others, assessing the best practices and common pitfalls in deal structuring and facility leases, as well as highlighting important differences across markets, leagues, facility types, public actors, subsidy delivery mechanisms, and urban development aspirations. It concludes with speculations about the next round of facility replacement amidst rapid changes in broadcast technology, shrinking domestic audiences, and the globalization of sport.

Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?
Source: Dennis Coates and Brad R. Humphreys, Econ Journal Watch, Vol 5 no. 3, September 2008

From the abstract:
This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.

States Diversifying Use of Public-Private Partnerships in Infrastructure

Source: Sean Slone, Council of State Governments, May June 2016

When U.S. Secretary of Transportation Anthony Foxx finished his remarks at the recent InfraAmericas conference on public-private partnerships, or P3s, in New York City, Kentucky state Rep. Leslie Combs was first to the microphone for the Q&A. “We just passed P3 legislation in Kentucky,” said Combs, who this spring authored the legislation that allows Kentucky, like 33 other states, Puerto Rico and the District of Columbia, to enter into P3s to build infrastructure projects. … But Kentucky’s first announced infrastructure P3 is not a toll road or a major bridge project. In fact, at the behest of anti-toll interests in the northern part of the state, Kentucky’s legislation specifically prohibits the use of tolls on any P3 project connecting Kentucky and Ohio, such as a potential replacement for the functionally obsolete Brent Spence Bridge. Instead, the commonwealth’s first P3 project is KentuckyWired, a partnership to create a statewide, open-access fiber optic broadband network. …

… Indeed many of the infrastructure P3 projects garnering the buzz at this year’s InfraAmericas forum were somewhat different from those the U.S. P3 industry has become accustomed to over the last decade. The conference highlighted projects at major U.S. airports and on university campuses. There were transit project P3s, alternative fuel, highway lighting and water infrastructure projects and a variety of social and civic infrastructure projects—public buildings and the like—in the spotlight as well.

Library of Congress opens $40M contract for IT support

Source: Billy Mitchell, Fed Scoop, July 5, 2016

The Library of Congress, fighting its way out of an IT environment hamstrung by legacy technology, plans to spend up to $40 million on contractor support to help govern and manage its computer modernization development and investments. The legislative branch agency published a solicitation requesting proposals from IT vendors that can support the Library’s newly formed Office of the Chief Information Officer “in accomplishing initiatives in the areas of management and governance processes, including mission and IT strategic planning, effective and efficient use of technology investments within the context of business and IT investment portfolios, service management, and improved support to the Library’s various service units for both business and IT project and program management.” … The Library’s decision to move to independent contractors to support these IT functions comes after a series of critical audits in 2015 from its inspector general and the Government Accountability Office, which in part called for the agency to outsource a commercial firm to review its IT projects and help better manage them. …

High Test Scores At A Nationally Lauded Charter Network, But At What Cost?

Source: Anya Kamenetz, NPR, June 24, 2016

Since its inception nearly a decade ago in Silicon Valley, Rocketship has been among the most nationally applauded charter networks, hailed as an innovative model of blended learning. Founder John Danner, who made a fortune in Internet advertising, originally envisioned enrolling 1 million students by 2020, relying on the strength of three pillars — “personalized learning” with software, excellent teachers and parent involvement — to raise the achievement of underserved students. Today there are 13 Rocketship schools, with 6,000 students, in the San Francisco Bay Area, Nashville, Tenn., and Milwaukee, with one scheduled to open in Washington, D.C., this fall. The students, largely low-income and Hispanic, outperform their peers on state tests. … Yet despite its successes, as Rocketship has pushed to expand, some parents, teachers and community members have objected in public meetings, raising concerns about the school’s tech-heavy instruction model, student-teacher ratio, and student health and safety. In interviews over the past two months, current and former employees at Rocketship Schools emphasized the pressures on employees and students. They recounted instances of inadequate supervision, bathroom accidents and even infections due to denial of restroom visits. And they voiced concerns about a disciplinary measure the company calls Zone Zero. Several current and former staffers said this practice, in effect, amounted to hours of enforced silence. A handful of the employees also reported, and internal emails corroborated, a practice of having students retake standardized tests to increase scores. The current and former educators linked that practice to the company’s policy of tying 50 percent of teachers’ pay to growth in student test scores. ….


Is a charter school chain called Rocketship ready to soar across America?
Source: Lyndsey Layton, Washington Post, July 29, 2012

…. This is Rocketship Discovery Prep, one of five charter elementary schools founded by Danner that are bridging the achievement gap — the staggering difference in academic performance between poor and privileged children. …But some wonder if five-year-old Rocketship is producing miracles or mirages. Will a model that succeeds in San Jose also flourish in Nashville? Can a strategy that works for a handful of schools be expanded across the country? And can the achievement gap be eliminated? …. For two hours each day, students are taught by computers designed to meet children at their particular level and drill them in rote skills like addition or subtraction. … Computers shave 25 percent from Rocketship’s labor costs — savings used to extend the school day to eight hours, pay higher salaries to its nonunion teachers and to construct its own school facilities, among other things. … Stephen McMahon, president of the San Jose teachers union, worries that a dual system is developing: One filled with charters that attract motivated families and another of traditional public schools populated with reluctant learners….

DC student left alone on school bus for over an hour before being discovered

Source: Tisha Lewis, Fox 5 DC, June 20, 2016

It is any parent’s worst nightmare. You think your child is at school only to receive a phone call saying they are not. Then you find out your little one was left on a school bus – a bus that reportedly had a bus driver and an adult attendant on board. Yet somehow, they both missed the mark. “I thought I was going to die, and at first, I thought it was a dream but it wasn’t,” said 7-year-old Antonio Grinage. … His mother, Arnise Grinage, said she received a phone call more than three hours later saying Antonio was left on the bus and had just arrived to school. A Good Samaritan walked Antonio to the Children’s Guild DC Public Charter School after he woke up startled inside the bus. … Arnise Grinage said this is not the first incident she has had with Antonio’s bus driver. She said on Friday, the bus came almost 30 minutes early to pick Antonio up. …

Servicing Our Economy: Producer Service Location and Government Procurement 2004–2010 in the Washington DC Metropolitan Area

Source: S. C. Christopher, R. D. Vese, M. A. Boyd, A. D. Reddy, A. P. Mulhollen, D. E. Zand and T. F. Leslie, Growth of Change, May 15, 2016


Harrington and Campbell (1997) previously illuminated the pattern of producer services’ suburbanization in the Washington, D.C., metropolitan area between 1970 and 1992. Their results showed producer services growing at a faster rate at locations farther from the central city. We revisit the topic utilizing data from 2004 to 2010, assessing not only changes in the distribution of producer services since their work, but also the impact of massive increases in defense spending on producer services’ growth throughout the first decade of the twenty-first century. Multivariate linear regression is used to estimate per capita growth of producer services employment using six independent variables. Our results reveal producer services employment during the time period has grown significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell’s research. Additionally, we find per capita producer services employment is self-limiting over the study period: locations with more producer services employment in 2004 experienced significantly less producer services growth over the period. We find federal procurement has no correlation on producer services overall, with limited effects on some subsectors. Analyzing a select group of producer services subsectors revealed that no sectors followed the overall model exactly, suggesting that targeting producer services for growth must be done carefully. None of our models show employment diversity to be a factor in differentiating economic growth at the intra-metropolitan level.

D.C. Affordable Housing ‘Strike Force’ Wants a Public-Private Investment Fund

Source: Andrew Giambrone, Washington City Paper, June 13, 2016

On Saturday, an 18-member group of affordable-housing experts formed by Mayor Muriel Bowser last year released six policy recommendations to help the administration keep rental units within reach of D.C.’s lower-income residents.

The “Housing Preservation Strike Force” rolled out a mix of financial and programatic strategies in advance of a report expected later this month. The group has sought to identify ways to maintain affordable housing in properties that are set to lose their government subsidies in the next few years, in part by establishing affordability covenants. Preserving affordable units is considered cheaper and more efficient than creating them from scratch, which can take a few years.
According to the mayor’s office, the strike force’s six recommendations are:
• Establishing a preservation unit within a D.C. agency to identify specific affordable-housing opportunities, and to create a database of affordable-housing units
• Funding a “public-private preservation fund” to “facilitate early investments in preservation deals”
• Launching a program to renovate affordable housing in “small properties” of between five and 50 units
• Drafting additional regulations for the District Opportunity to Purchase Act, which allows D.C. to purchase properties that risk losing their affordable-housing subsidies
• Incentivizing residents and developers to take advantage of the Tenant Opportunity to Purchase Act through “predevelopment activities, legal services, third-party reports, acquisition bridge financing,” and data-collection
• Creating programs designed to benefit seniors, such as “tenant-based vouchers or other rental assistance”

What Happens If You Pay Contractors Only When Their Programs Work?

Source: Charles S. Clark, Government Executive, April 20, 2016

The Obama administration is “doubling down” on its study of the “pay for success” approach to funding social services programs after they demonstrate results, rather than in advance. … The Obama administration is “doubling down” on its study of the “pay for success” approach to funding social services programs after they demonstrate results, rather than in advance. … The feasibility studies will be funded in locations such as Boise, Idaho, Baltimore and parts of Virginia and Arizona, OMB said. In total almost 70 projects in 29 states and the District of Columbia are in the works. A grantee called the Nonprofit Finance Fund has been helping nine PFS projects structure the agreements that are the “backbone of PFS projects,” they wrote. Other grantees include the Corporation for Supportive Housing, the Green and Healthy Homes Initiative, the Harvard Kennedy School Government Performance Lab, the Institute for Child Success, the National Council on Crime and Delinquency, Third Sector Capital Partners and the University of Utah Sorenson Impact Center. …