Out of Control Policy Blog

Friday Privatization News Highlights (8/19/2011 edition)

News articles on some of the more interesting developments on the privatization and public-private partnership (PPP) front over the last week include:

State Government

  • "Under threat of losing millions, state decides against using private workers for food assistance program" (The Capital Times): The federal government is turning the screws on a fledgling welfare eligibility privatization program in Wisconsin started under the previous administration, threatening to withhold millions in federal funds unless the state fires hundreds of contractors and replaces them with public sector employees. The USDA’s personnel demands would reduce the number of private contractors by approximately 40%, according to the article.
  • "New liquor-privatization measure, Initiative 1183, deserves a toast" (The Seattle Times): The Times editorial board raises a glass to Initiative 1183, a November 2011 ballot initiative that would get Washington State out of the liquor wholesale and retail business and, according to multiple estimates, would increase revenue to state and local governments.
  • "Omaha child-welfare cases privatized" (Omaha World-Herald): This article provides an update on Nebraska's ongoing efforts to privatize child welfare services. For some illustrative success stories in child welfare privatization, see the State Government Update in Reason Foundation's Annual Privatization Report 2010.

Local Government

  • "Los Angeles City Council Pursuing Zoo Privatization" (Reason.org): Last Friday afternoon, the Los Angeles City Council approved soliciting proposals from potential private operators of the L.A. Zoo. My colleague Harris Kenny's blog post on this initiative includes details and article links with more information.
  • "Los Angeles to hand over animal shelter to nonprofit group" (Los Angeles Times): This week, the Los Angeles City Council voted to move forward with a 3-year PPP with Best Friends Animal Society to take over operations of the Northeast Valley Animal Care Center in Mission Hills. The $19 million facility was built several years ago using public debt, but since then the city’s fiscal woes have prevented it from funding the operations of the currently-closed shelter. Notably, under the new PPP the city will not be contributing operating funds to the private operator (and estimated savings of over $3 million per year), and Best Friends has committed to making $1 million in improvements to the facility. More details in the L.A. Daily News here, and don’t miss the Timesrecent editorial here.
  • "Parks and Re-creation" (City Journal): Animal shelters and zoos are not the only city amenities that can be more effectively provided through nonprofit PPPs. This informative article by Laura Vanderkam offers an excellent overview of New York City’s pioneering and extensive use of PPPs to operate many of its urban parks, including famous landmarks like Central Park and Bryant Park that were almost literally collapsing under government operation three decades ago. Today, both parks are thriving after a conversion to nonprofit operation and are vibrant urban spaces people want to visit. Significantly, the city is contributing vastly less in public funding to these parks today than it used to—Central Park only receives about 15% of its operating funds from the city today, with the nonprofit conservancy operator generating the rest; Bryant Park is now 100% self-funded. This is the type of model that many cash-strapped cities today would be smart to explore to keep their parks open and thriving.
  • "Memphis officials ask Humane Society to evaluate animal shelter" (Memphis Commercial Appeal): Memphis, Tennessee officials plan to issue a request for proposals within the next month to solicit interest from nonprofits interested in potentially taking over operations of Memphis Animal Services. In parallel, they’ve reached an agreement with the Humane Society to conduct an evaluation of the current operations of the city’s animal shelter.
  • "City of Flint considering plan to lease out all public golf course operations" (The Flint Journal): Officials in Flint, Michigan are considering a proposal to spin off the operations of four public golf courses—two of which are currently closed and, taken collectively, all of which are operating at a loss in city hands. According to a follow up article here, a local AFSCME chapter is reportedly being considered to run two of the courses, with private sector operators being considered for the others.
  • "Hollywood considers privatizing water services" (South Florida Sun-Sentinel): Officials in Hollywood, Florida are doing some advance planning in the event that a September ballot measure fails and throws the city budget out of whack. The measure asks voters to approve a variety of pension reforms that the city was unable to get unions to agree to, and with approval uncertain, officials are considering a range of "Plan B" options to cut costs, ranging from employee pay cuts, layoffs, service cuts and the potential privatization of utilities services that include water, stormwater and wastewater services.

For more on privatization, see Reason Foundation's privatization research archive.

Leonard Gilroy is Director of Government Reform


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