Showing posts with label Privatization. Show all posts
Showing posts with label Privatization. Show all posts

Tuesday, January 04, 2011

Dear States, Watch Out for the Privatizers

By Jack Lohman from Commondreams.org

State after state is reporting dire financial conditions - California, Illinois, New Jersey, and even our own Wisconsin. The losses are so deep that only bankruptcy seems an option. But wait - there's another ploy coming to a theater near you! They've been preparing the soil and soon they'll spring it on us.

It's called privatizing.

It's always the same false claim: Private is more efficient than public. The public unions are impossible to work with, they'll say, and we have a corporation that can save us dollars.

Rarely is that true, especially after they add all of the exorbitant salaries, bonuses, shareholder profits, marketing and political bribes that must be passed on to the taxpayer. These costs usually far exceed government waste, unless offset by egregiously low salaries that further harm the economy.

Need proof? Privatized Medicare Advantage costs taxpayers 17 percent more than government Medicare, which provides care to 80 percent of our seniors. Privatized Blackwater troops in the Mideast cost five times what U.S. troops cost. But Blackwater executives give campaign dollars and our troops don't, so what else would you expect?

Politicians now have us right where they want us: desperate.

They'll take state assets - say, roads - and lease them to a private company, which will then add tolls and recoup their investment in 10 years and pocket the profits thereafter. And part of those profits will go to the friendly politicians.

Or the politicians will sell state-owned buildings and then lease them back so the private company can make the profits from the taxpayers. Or farm out housekeeping and security services to for-profit companies, as was done by Gov.-elect Scott Walker in Milwaukee.

Walker, as Milwaukee County executive, proposed leasing out Milwaukee's Mitchell Airport and then leasing it back to help the county financially. Fortunately, he was elected governor before that could be pulled off, but now the state must contend with similar crazy ideas. No successful airport privatizations have been implemented nationally, and higher airport and traveler fees would have been necessary.

It's the same old story, but will we ever learn?

We voters are too hung up on "our side" being right and "their side" being wrong, when in fact BOTH sides are corrupt. Republicans hate Democrats -- or the reverse -- when in fact we should be taxpayers who hate crooked politicians who bargain away our assets. And as long as we battle each other they are free to give away the store.

Politicians want us to believe that they have a handle on this whole economy thing, but they don't. All they know is that the guy sending the campaign check wants this or that, and if the politician wants the checks to continue, that guy will get his wish.

How much deeper into our pockets will we allow? Now is the time to say stop!

State assets are now on the line, and next comes privatizing water rights. Food is some ways off because family farms haven't all been bought off yet, but that time will come. Unless we have the gumption to stop the drain. NOW!

We must have 100 percent political turnover every two years until we get the politicians off the corporate dole.

Jack Lohman is a retired business owner from Colgate and author of “Politicians: Owned and Operated by Corporate America.” He is publisher ofhttp://MoneyedPoliticians.net and can be reached at jelohman@gmail.com

Tuesday, October 14, 2008

Guam Port Discusses PMC

Guam port discusses public-private partnership
Wednesday, 15 October 2008
by Tessa Borja
Variety News Staff

IN a working session held yesterday afternoon, the Port Authority of Guam board and management discussed the costs and benefits of implementing a private partnership through a Performance Management Contract (PMC). Bringing up his experience as the general manager of Consolidated Utilities Services, which is now managed under a PMC, John Benavente gave a presentation on his analysis of how the port could benefit from outsourcing the management of the port.

"Workers are unproductive when they don't have the tools and equipment or the work order processes to make them more efficient," said Benavente.

"For the power entity, for example, the management group gets the parts they need right away. The PMC will have the power to procure, which is one of its advantages," Benavente said.

He added that because the PMC terminates after 20 years or so, the asset always returns to the public. "And you can determine if you want to keep the modifications or developments," Benavente concluded.

Tuesday, March 18, 2008

Private Firm Takes Over Dump

Firm takes over dump; Court says all remedies exhausted
Tuesday March 18, 2008
By Gina Tabonares
Variety News Staff

FED up with GovGuam's lack of leadership, planning, and vision, District Court of Guam Chief Judge Frances Tydingco-Gatewood yesterday ordered the appointment of a Virginia-based receiver that will handle the island's solid waste management.

The appointment of Gershman, Brickner & Bratton Inc. (GBB), a Fairfax, Virginia-based company, as receiver was not decided hastily, Chief Judge Tydingco-Gatewood said, emphasizing that "it was not made lightly or with relish."

In a 23-page order, the court said there is no more remedy left to resolve the island's garbage crisis, which the court described as "highly dysfunctional, largely mismanaged, overly bureaucratic and politically charged."

The court said the inherited problem is "beyond correction by conventional methods."

The selection of GBB, with Special Principal Associate David L. Manning as the signatory, displaces GovGuam's full power and authority in enforcing the terms of the Consent Decree.

The company now assumes all of the responsibilities, functions, duties, powers, and authority of the Solid Waste Management Division of the Department of Public Works "and any and all departments, or other divisions of the DPW in so far as they affect GovGuam compliance with the Consent Decree."

The receiver now has the authority to complete management and control of all Consent Decree projects including but not limited to the supervision of all GovGuam employees associated with the Consent Decree projects, performance of existing contracts, and entering into future contracts deemed necessary.

GBB is now also in charge of the facilitation of financing and borrowing of funds to carry the Consent Decree projects. It can modify the revised financial plan or methods of debt financing it deems appropriate.

The receiver will likewise take care of the application of the Consolidated Commission on Utilities for rate increases for residential waste collection services and tipping fees and will be in charge with hiring all consultants, professionals, contractors and engineering firms or counsel, which the receiver deems necessary for the performance of duties necessary in meeting the mandates of the Consent Decree.

* Fees *

The receiver, which is required to submit quarterly reports to the court regarding the progress made toward the compliance of the Consent Decree, will initially use the $2.8 million deposited by GovGuam to pay the penalties for missing Consent Decree deadlines.

Under the initial compensation rate GBB submitted, GovGuam taxpayers have started paying the company's president and special principal associate $250 per hour.

A fee of $225 per hour will also be paid for the executive vice president, $210 per hour for the senior vice president, $185 per hour for the vice president, and $165 per hour for the principal associate or principal engineer.

The firm's asking fee for senior project manager or senior project engineer or senior associate engineer is $160 per hour.

A fee of $140 per hour will be paid for project manager, $125 per hour for project engineer, $105 per hour for consultant II or contract administrator, $85 per hour for engineer I, $65 per hour for support manager, $60 per hour for administrative secretary, editor or staff accountant, and $45 per hour for clerical or support staff.

On top of the hourly fee for the receiver's staff, GovGuam will also pay for the staff travel expenses and the board and room arrangements of visiting GBB workers from Virginia.

* Exhausted remedies *

The court stressed that it considered drastic remedies to ensure that islandwide health and environmental hazards brought about by the Ordot Dump leachate does not continue.

The Chief Judge said that despite the passage of 22 years, the Ordot dump is still in operation and remedial measures that include the imposition of monetary damages, the appointment of a special master or court monitor, the imposition of a moratorium, and the immediate closure of the Ordot Dump did not resolve the continuing harm to the environment and the citizens of Guam.

According to the court, the history of the Consent Decree case demonstrates that the GovGuam is "paralyzed by an institutional and systematic quagmire that has prevented it from effectively complying with the Consent Decree."

The Chief Judge stated that GovGuam should not be surprised by the receivership order, saying the record reveals that the local government has been on notice of its violation of the Clean Water Act for 22 years.

She also mentioned that GovGuam lacked commitment towards financing the Consent Decree projects.

Despite being earlier advised by the Public Utilities Commission to improve its collection rate, DPW recently reported that it only improved its collection rate from 30 to 50 percent.

The Chief Judge said the lack of consistent revenue stream from collections is exacerbated by the Legislature's failure to provide funding for any of the Consent Decree projects.

"Without commitment to fund the necessary projects, there is little chance that the closing of the Ordot Dump and opening of the landfill at Dandan will occur at all," the court stated.

The court also pointed out the lack of cooperation between the executive and legislative branches to respond to the solid waste crisis.

The Chief Judge said the Legislature not only failed to provide any funding for Consent Decree projects but actively prohibited the expenditure of monies toward the development of the landfill in Dandan.

Until this time, the court noted that GovGuam has no tangible progress with DPW Director Larry Perez "undecided as to how best to proceed."

Sunday, March 25, 2007

Privitaization Is Not A Panacea

Privatization is not a magic bullet -- each case must be carefully evaluated
By Frank T. Ishizaki
The Pacific Daily News
March 25, 2007

Privatization is such a popular buzzword that can be both vogue and scary. We need to carefully approach any privatization effort by asking basic questions, weighing risk and benefits, and considering how to deal with current employees. While I believe that certain governmental functions can be partially or fully privatized, we must proceed carefully.

Possible areas for consideration might include: food services; solid waste collection, recycling, and landfill operations; billing and collection of accounts receivable and inventory control; medical services; equipment maintenance and repair; certain human resource functions.

I note that the Pacific Daily News in its editorials over the past few years has been strongly advocating that we privatize the operations of the prison. Four years ago, when I was director of corrections, the governor instructed me to proceed with the privatization of prison operations. As a result, I did extensive research on the subject by contacting key officials from the National Institute of Corrections and consulted with several of my correctional colleagues. One director told me that he oversees several prisons in his state and that there was no significant cost differential between state-operated facilities versus contractor-operated facilities. He further told me that contract management and operational monitoring were his challenges to ensure that privately operated prisons minimize the state's liabilities from failure to maintain health, safety and environmental standards.

After much review, I concluded that privatization of DOC operations was not going to be cost-effective and recommended against the proposal to privatize. In summary, responsibility for the care of inmates and the liabilities associated with any failures in the operation of the prison, to include security, health care, treatment and rehabilitation, cannot be outsourced. The government continues to own those responsibilities in spite of outsourcing operations.
A key component to my rejection of privatization of the prison was that prison management companies (which are, after all, businesses and have a profit motive and are constantly looking at the bottom line) are known to get in the door by submitting low-ball bids in order to win contracts and move, in subsequent years after the bid is awarded, to renegotiate the contract to increase fees by reporting operational losses. In the meantime, the basic prison infrastructure will have been destroyed and any future attempt by the government to reoccupy and operate the prison will be significantly more costly.

In 2003, a visiting official from the NIC told me that he had been on island several years prior to my tenure as director of corrections. At that time, the topic of privatization had been thoroughly discussed and feelers had actually been put out to see if there were any interested bidders. There were no interested "investors/bidders." He informed me that one huge but basic difficulty in privatizing DOC is the infrastructure of the facility. The layout of the structures, which are spread out in "cottage" fashion all over the "campus," does not lend itself to efficient operations. The recommendation would be that new, multi-story facilities be built to replace the existing typhoon-damaged buildings, which currently house, at any given time, up to 600 inmates.

Key components to successful privatization of services are good contract management and operational oversight. We generally have low marks in these areas and risk greater problems if we privatize prison operations. If we cannot find cost savings in a privatization move, why proceed?

As a model, DOC privatized the meal services and was able to immediately reduce the cost of feeding inmates. As this endeavor has been in operation for three years, we now need to evaluate the program to determine if it has met our expectations. To answer some of my questions concerning this particular privatization effort, I recently requested the assistance of Professor Ron McNinch. I wanted him to conduct a privatization assessment of the GTA, GPSS food services, and the DOC food-service contracts. He has volunteered and will be conducting an analysis, with the assistance of his students, as a class project -- at no cost to our government. I eagerly await the results and trust that his report will help us determine if privatization has been successfully carried out in these situations.

In summary, privatization has great potential to improve our effectiveness and efficiency, but we must proceed carefully and intelligently. We must not take a shotgun approach but rather should focus on each entity in question on a case-by-case basis.


Senator Frank T. Ishizaki is a senator in the 29th Guam Legislature, a former chief of police and former director of corrections.